Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest,americast.usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, Sep 21 1992 Date: Mon, 21 Sep 92 04:39:57 EDT Message-ID: 09-21 0000 DECISIONLINE: Personal Investing USA TODAY Update Sept. 21, 1992 Source: USA TODAY:Gannett National Information Network DROP EXPECTED AFTER ELECTION: The presidential election, only six weeks away, is greeted by most Wall Street pros with a yawn. But Maceo Sloan, skipper of Durham, N.C.-based NCM Capital Management says politics will affect the market greatly. Sloan thinks the market will fall whether George Bush or Bill Clinton wins, though a lot faster if it's Clinton. Sloan believes a Clinton win will result in a 10% selloff. CURRENCY CRISIS RAISES DOUBTS: Europe's currency crisis raises the potential risks and rewards of investing abroad. And no doubt many of the U.S. investors who have a piece of the $73 billion invested in international mutual funds are wondering what to do. Many advisers think there is no way to tell what will happen. So don't try any fancy market timing or disrupt a long-term investment strategy. (For more, see special Europe package below.) PAINEWEBBER RATED BEST: Prudential Securities analyst Larry Eckenfelder is telling clients PaineWebber Group is the best brokerage stock; discount king Charles Schwab is worst. Eckenfeler says he likes PaineWebber -but only if a year-end market rally happens. Under that scenario, he thinks PaineWebber could rack up a fast 10% to 20% gain. Eckenfelder sees more bad times for Schwab stocks. BROKERAGE STOCKS LOOK BLEAK: Analysts agree that the future for brokerage stocks does not look rosy. Larry Eckenfelder of Prudential Securities sees 1993 industry earnings falling and rates the brokers as holds, not buys. Another analyst, Perrin Long of First Michigan Corp. rates the industry's stocks as "dead money" the next 18 months and vulnerable to 20% to 30% declines. BONDS MAY DROP: Money management whiz Michael Steinhardt, up 45% so far this year, is lowering his leveraged $4 billion bond bet on 30-year Treasury bonds. Political uncertainties in the U.S. and overseas make Steinhardt worrisome over bonds. On stocks, he remains net short - that is, a bet on lower stock prices. He believes stocks are way overvalued. WHITTAKER NOT FOR SALE: Joseph Alibrandi, 63-year-old CEO of Whittaker, told market reporter Jerilyn Klein there's no truth to renewed reports the maker of products for the aerospace and aircraft industries is up for sale. He says the firm is looking for acquisitions, but didn't rule out a possible merger. Some pros feel the company could fetch a price of $18 to $23 a share, vs. Thursday's close of $12 3:8. GOLD MAY HEAD UPWARD: A gold bear for quite a while, closely tracked technician Ned Davis of Ned Davis Research has flashed a buy signal on the precious metal. Several pros see an upward gold trend, given, they feel, likelihood of stepped up government spending under the next administration to get the economy cracking. Some of their favorite gold plays: American Barrick Resources, Pegasus Gold and Horsham. CLOSED FUNDS OFFER BIG DISCOUNT: Closed-end European stock funds offer investors a way to invest in stocks of one country. Currently, closed-end funds that invest in Europe are at an attractive average 11.8% discount to their net asset value. That's among the best discount of all types of closed-end funds. Investors who like the prospects for long-term economic growth in Europe may want to play these funds. SHORT-TERM RATES ARE SKETCHY: Short-term investment funds invest in interest-bearing securities issued overseas, and they stick to those that mature within five years or less. Few analysts think short-term interest rates can stay high for long. Lower rates would help push the funds' share prices up. But the funds haven't proven they can shield investors from currency fluctuations. REWARDS COULD BE BIG: International bond funds invest in long-term IOUs issued by foreign governments and corporations. Some, but not all, try to protect investors against currency moves by hedging with currency futures. Most European bonds are still risky, and will be for a while. Still, if the long-term trend in rates is down, bond prices will rise. If the dollar falls, the rewards could be big. GOLD, SILVER RISE: Gold prices rose Friday. At the Commodity Exchange in New York, gold for current delivery cost $351.20 an ounce, up $3.30 from Thursday. Republic National Bank of New York quoted $351.00 an ounce, up $3.25. Silver bullion rose in London to $3.82 a troy ounce, up from $3.80 bid late Thursday. On the Commodity Exchange in New York, silver brought $3.85 an ounce, up from $3.76 Thursday. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3327.05 Monday after closing up 11.35 Friday. The New York Stock Exchange composite opens at 232.39, up 1.42. The American Stock Exchange market value opens at 385.50, up 0.34. The NASDAQ OTC composite opens at 589.12, up 1.30. SPECIAL PACKAGE ON EUROPE: ANALYSTS ADVISE CALM: Gary Greenbaum of Greenbaum & Associates is one of many advisers who say there's no way to guess what will happen in coming weeks as European economic chiefs try to deal with the monetary crisis. He is telling clients to stick to a long-term goal of keeping 5% to 10% of bond holdings in European bonds. Investment adviser Sandra Moll agrees that investors should ride it out. COMPANIES REPORT LITTLE ACTION: Funds companies say their shareholders are doing just that. At Fidelity Investments, there has been very little activity from overseas fund shareholders. T. Rowe Price Associates has seen a modest pickup in new investments to their international funds. And at PaineWebber, which has the USA's largest international bond fund, fund shareholders are remaining calm. SOME ADVISE TO ACT NOW: Not everyone is waiting. Art Micheletti, research chief at Bailard, Biehl & Kaiser, plans to buy French stocks and bonds Monday no matter what the French vote is on the Maastricht treaty. He says anyone not in European investments should consider putting a bit of money in an international fund now. He admits investors already in Europe might want to "see how things settle out." (End of package.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing editor: Martin Baucom. (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