Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Thu, Aug 13 1992 Date: Thu, 13 Aug 92 05:17:49 EDT Message-ID: 08-13 0000 DECISIONLINE: Personal Investing USA TODAY Update Aug. 13, 1992 Source: USA TODAY:Gannett National Information Network MCDONNELL GETS MIXED REACTION: McDonnell Douglas suddenly seems hot after a down year. The stock jumped almost $8 a share the past week and closed up 1 7:8 at $42 5:8 Wednesday, buoyed by a handful of buy recommendations. Analysts are happy about money to be saved by streamlining, but analyst David Jones says the industry itself is not the healthiest. "They're deferring new equipment orders," he says. GOLD, SILVER, PLATINUM DIVE: Gold, silver and platinum prices dropped sharply Wednesday as investors decided they no longer need a hedge against inflation. Gold closed at $338.60, down $8.70; silver closed at $3.767 an ounce, down 11.8 cents; and platinum closed at $354.30, down $13.40. BUFFETT UPS WELLS FARGO STAKE: Renowned Nebraska investor Warren Buffett disclosed Wednesday that he has modestly increased his stake in Wells Fargo, a San Francisco bank company struggling with California's weak economy and real-estate market. Wells Fargo shares jumped 1 3:8 to close at $69 5:8 on the news. Buffett, through his Berkshire Hathaway holding company, raised his stake to 5.6 million shares. SHOWBIZ HAS BECOME A WINNER: When ShowBiz Pizza introduced its idea of combining pizza and kiddie entertainment, restaurant watchers thought it would be a flash in the pan. Today, ShowBiz runs more than 270 restaurants. ShowBiz was spun off from Brock in 1989. As an independent company, it has met or exceeded analysts' earnings expectations every quarter. BULL MARKET BEGAN 10 YEARS AGO: Aug. 13, 1982 was the first day of a great bull market. It started amid widespread despair over stocks' prospects, serving up one of the great investing lessons of the past decade: When it seems the world is giving up on something, opportunity isn't just knocking - it's breaking down the door. The Dow has quadrupled in the past 10 years, rising from 777 to 3331. MARKET IS IN TROUBLE: The 10-year-old bull market is in trouble. Stock prices today are so high they reflect earnings growth that may be unachievable in low-inflation, low-growth years economists say lie ahead. On average, stock prices now are 18 times expected per-share earnings. When the bull market began, that figure was eight. If earnings can't catch up, stocks must come down. BEWARE OF PAST WINNERS: The gains in the top stocks of the past decade are amazing. After all, $1,000 invested in Mark IV Industries has ballooned to $92,860. The same amount invested in SciMed Life is now worth $91,530. But analysts say that buying them now in hopes of reaping rewards could bomb. "The eagles of the last decade can turn out to be the turkeys of the next," says strategist Raymond DeVoe. BLUE-COLLAR STOCKS DO WELL: Many investors might think really hot stocks come only from glitzy industries like biotechnology. But over the past 10 years, dirty-fingernail, heavy-industrial stocks have been among the biggest gainers. Hardly glamorous top-performing stocks include carpet maker Shaw Industries and Great Lakes Chemical as well as top earner Mark IV. THREE DOW WINNERS ARE FOCUSED: Things did go better with Coke - not to mention Marlboro and Mevacor - during the 10-year stock boom. Coca-Cola, Philip Morris and Merck finished the decade as the three top-performance stocks in the Dow Jones industrial average. The three demonstrated an ability to keep their shareholders happy, and each bucked the breakup and shakeup trend of the '80s, focusing on the bottom line. ADVISORS MORE OPTIMISTIC: Investment advisors became more optimistic about the outlook for U.S. stocks last week, according to a survey out Wednesday from the Investors Intelligence newsletter. Among the market letter writers, 50% were bullish, up from 47.3% the previous week, and 28.2% were bearish on stocks, down from 30%. Advisers expecting a short-term correction dipped to 21.8% from 22.7%. PPI REPORT DOESN'T HELP MARKET: News of low inflation didn't do the stock market any good Wednesday. The Dow Jones industrial average dropped 10.27 points to 3320.83. Broader indexes also fell. Winners trailed losers 757 to 933 on the New York Stock Exchange, where volume was 177 million shares. The decline came in spite of a positive economic report that the producer-price index rose a scant 0.1% in July. GOLD, SILVER DOWN: Gold prices plunged, and silver also was down. Gold dropped $8.70 to $338.60 on the Commodity Exchange. The Republic National Bank later quoted a bid of $340.00, off $7.60. Gold fell in London to $346.00 from $348.95. Silver fell in London to $3.89 from $3.95 and on the Comex, silver was quoted at $3.767, down from $3.885. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Thursday at 3320.83 after closing down 10.27 points Wednesday. The New York Stock Exchange composite opens at 229.99, down 0.62. The American Stock Exchange market value opens at 386.46, down 1.62. The NASDAQ OTC composite opens at 570.85, down 0.75. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed overseas Thursday. It opens at 0.5178 British pounds, down from 0.5196; 4.9565 French francs, up from 4.9700; 1.6255 German marks, down from 1.4675; and 127.46 Japanese yen, up from 128.05. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM