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 Thu, Oct 22 1992 Date: Thu, 22 Oct 92 04:38:37 EDT Message-ID: 10-22 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 22, 1992 Source: USA TODAY:Gannett National Information Network NO TREND SEEN IN EARNINGS: The struggling economy is separating weak from strong among U.S. corporations. In the past, earnings of certain industry groups would hold up better than others in a weak economy. Now, companies in the same business are reporting widely different earnings. That underscores why analysts say it's the strength of an individual company that counts. That means harder work for investors. BOND MARKET IS TOO WORRIED: The bond market has been mourning the passing of Republican rule all month by driving up interest rates. On Wall Street, many worry that an era is ending. But most experts say that taxpayers probably will not have to bail out the government fund that pays off depositors when banks fail - a fund that is supposed to be financed by insurance premiums collected from banks. SAVERS PULL OUT OF CDS: Because interest rates plummeted, savers have withdrawn $203.4 billion from certificates of deposit at banks or savings and loans the past year. According to Bank Rate Monitor and the Federal Reserve, there was just $907 billion in certificates of deposit in September 1992. That's a preliminary figure for the week ended Sept. 28. In September 1991: $1,111 billion. BLOCKBUSTER MOVES IN ON MUSIC: Blockbuster Entertainment has set its sights on remaking the record and compact disc retailing business, starting with the $185 million planned acquisition of Sound Warehouse and Music Plus stores from California's Shamrock Holdings. Blockbuster wants to cash in on the industry's 10% expected annual growth. But it will have to adjust to smaller profit margins and stiffer competition. MUSIC WILL BE TOUGHER WORK: Blockbuster Entertainment's purchase of a record chain may be tough going. "Blockbuster is one of the great retail stories, but video was easier," says PaineWebber analyst Craig Bibb. Analysts also think Blockbuster's penchant for growth will annoy new rival Tower Records. FOSSEL IS NOT WORRIED: Jon Fossel thinks investors are far too worried about how a Bill Clinton win might affect stocks and bonds. Fossel is chairman of Oppenheimer Management and about as Republican as they come. Yet he assumes Clinton will win the election and says the Democrat's plan will do more good than harm for both stocks and bonds. But those markets have been choking on Clinton's plans since Labor Day. CLINTON WON'T HURT MARKET: Jon Fossel, a Republican, thinks bonds look good and stocks look even better. Even with the good chance of a Bill Clinton presidency. Fossel doesn't think inflation is an issue, like the markets do. He thinks more government spending wouldn't necessarily boost the deficit because if done properly it would stimulate the economy, boosting major stocks 10% to 15% next year. INVESTORS SEEK ALTERNATIVES: Institutional investors are dealing with an economy that may promise subpar stock returns by plowing money into takeover funds, start-up businesses, companies under bankruptcy protection, farmland and timberland, according to a Goldman Sachs survey. Of 228 institutional investors, 63% say stocks, bonds and real estate won't perform as well as alternatives in the near future. ALTERNATIVES YIELDS ARE HIGH: Institutions surveyed by Goldman Sachs are investing more than $5 billion a year in alternative investments. Alternatives typically must be held longer periods of time and are far more difficult to sell than stocks, bonds or real estate. But big money managers think returns could be about 15% a year. FBI PROBES CASH TRANSFER: The FBI is investigating allegations that Italian financier Giancarlo Parretti transferred cash and assets from MGM studios to other companies he controlled around the world before he was forced to give up control of MGM, Reuters says. Parretti borrowed heavily from French bank Credit Lyonnais to buy MGM for $1.3 billion from investor Kirk Kerkorian in 1990. GERMANY LETS INTEREST RATE FALL: Germany's central bank allowed a key money-market interest rate to fall to 8.75% from 8.90% Wednesday. That triggered interest rate cuts in Europe, but disappointed markets, which were expecting a deeper cut. Analysts say the Bundesbank's action was a sign it wants to soften its anti-inflation stance, which other European nations blame for nearly wrecking the European Monetary System. GOLD, SILVER UP: On the New York Commodity Exchange, gold bullion for current delivery settled at $344.10 a troy ounce Wednesday, up 30 cents from Tuesday. Also on New York's Comex, silver bullion settled at $3.790 a troy ounce, up from $3.778 on Tuesday. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3187.10 Thursday after closing up 1.08 Wednesday. The New York Stock Exchange composite opens at 228.60, up 0.02. The American Stock Exchange market value opens at 373.42, up 2.02. The NASDAQ OTC composite opens at 597.15, up 4.45. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly down on Thursday. It opens at 0.6207 British pounds, up from 0.6160; 5.1350 French francs, down from 5.1445; 1.5132 German marks, down from 1.5190; and 121.80 Japanese yen, down from 122.35. (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: 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