| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 805.1 | Market drop at the start of 1995 | EVMS::HALLYB | Fish have no concept of fire | Sun Dec 11 1994 17:51 | 26 |
| Congress will convene on January 4th and in the House a flurry of bills
will be introduced. One of these bills will be a Capital Gains Tax
reduction. It is standard that these bills have an effective date of
their day of introduction. Thus the bill will read something along the
lines of "...any capital gains realized on or after January 4, 1995
will be taxed at the rate of XXX...", where XXX is lower than current
capital gains rates.
This will cause a broad sell-off in the stock market even before the
bill is passed (therefore even if it ISN'T passed), as long-time
holders take advantage of a rare opportunity to realize some gains.
Especially if the market shows no promise of a quick rebound from its
recent depressed levels.
Therefore, look for a market drop the first two weeks of 1995. It could
be sudden and swift if lots of folks heads for the exits at once, in
which case prices might start to become attractive fairly soon.
To profit from this I would recommend buying January OEX put options at
the close of business January 3rd (the first trading day of 1995).
Sell them a week later at the open. With any luck you'll have some
capital gains of your own. (Trading options is not suitable for all
investors and requires opening an options account. Be sure to read and
understand the disclosure booklet your broker can supply.)
John
|
| 805.2 | I'll take a shot... | POBOX::CORSON | Higher, and a bit more to the right | Sun Dec 11 1994 22:22 | 30 |
|
Interesting. How 'bout:
High Low
DJIA 4350 3675
Fed. Rate 6.125 5.00
30-Year Mort. 9.375 7.875
DEC stock 38.50 25.00
Fortune 1000 biggest gainer MOTorola
Fortune 1000 biggest loser Westinghouse
Digital employee count 12/95 56,500
Way to profit for 1995 - buy good UITs (Unit Investment Trusts) in
California Municipals right after they tank in early '95. Also 10-year
US Treasuries are almost a no-brainer. Biggest winner in 1995 will be
small cap stocks and my three favorite ways to play them - PBHG Growth,
Heartland Value, and Twentieth Century:Ultra.
Merry Christmas to you all and Happy Investing in 1995 !
the Greyhawk
|
| 805.3 | Interest rates..goin' south... | ASDG::HORTON | Paving Info Highway with Si | Tue Dec 13 1994 20:09 | 27 |
| Using the Hawk's template here are my own predictions:
High Low
DJIA 3950 3250
Fed. Rate 5.875 4.25
30-Year Mort. 8.875 7.375
DEC stock 37.75 22.00
Fortune 1000 biggest gainer Merck
Fortune 1000 biggest loser Union Carbide
Digital employee count 12/95 62,000
Interest rates tick up in wake of Orange County debacle, then moderate
considerably through rest of year as declining economic activity reduces
demand for capital. Uptick in unemployment burns home starts and auto sales.
104th Congress passes reduction in capital gains taxes, but delays
implementation until 1996. Fed reverses policy and starts reducing rates in
hope of staving off recession, but too late.
Favorite investments: Benham Target Maturities Trust 2015 and 2020
Exxon (SeaRiver Maritime) zero coupon bonds of 2012
|
| 805.4 | Why not! | PARVAX::SCHUSTAK | Digital...AndProudOfIt! | Wed Dec 14 1994 13:03 | 25 |
| I guess this is the "official" template
High Low
DJIA 4450 3450
Fed. Rate 6.250 5.00
30-Year Mort. 9.50 8.875
DEC stock 55.00 31.00
Fortune 1000 biggest gainer Walmart
2nd choice Lotus
Fortune 1000 biggest loser Novell
Digital employee count 12/95 60,000
How to Prosper- Invest in what you [think you :-)] understand. WNT and other
shrink-wrap apps will "kill" Novell by the end of CY95. WalMart is severely
undervalued. LOTS will be acquired (CA?) in early '95. Pick stocks or funds,
not the market. Work hard, play hard.
Favorite investments: Compaq
Janus Venture
Vanguard Tustees Int'l
|
| 805.5 | Keep a light weather helm in '95 | NOVA::FINNERTY | Oracle Rdb Engineering | Mon Dec 19 1994 13:41 | 52 |
|
Here's the output from a little program I found some time ago. Its
predictions have been fairly good though by no means infallable. Use
at your own risk, as always:
S&P 500 Forecasts:
+3mo -3%
+6mo -5%
+12mo -10%
TBond Forecasts: 8.04% currently
+3mo 7.77%
+6mo 7.76%
+12mo 7.17%
TBill Forecasts: 5.44% currently
+3mo 5.70%
+6mo 5.67%
+12mo 5.48%
CPI (Inflation): 3.18% currently
+3mo 3.58%
+6mo 3.80%
+12mo 5.83%
Asset Allocation:
Stocks should yield -8.2% per year with a std. dev. of 9.4%
Bonds should yield 19.7% /yr with a s.d. of 8.0%
TBills should yield 5.7%/yr with a s.d. of .9%
Conservative portfolio: 97% TBills, 3% TBonds
Aggressive portfolio: 50% TBills, 50% TBonds
your mileage may vary.
My own spin on the prediction for the coming year is that the P/E ratio
for the S&P 500 has already dropped down into the 16's, which is a
good, healthy consolidation. Maybe it will continue to the 15's, but
I'm not going to wait to find out. I feel reasonably comfortable with
the market at this level, especially with an election cycle gearing up
to goose the economy for the next two years. My gut tells me that the
happy estimate for bonds above is too optimistic, and I see bonds going
up slightly in yield, not down.
In short, I think the market is "situation normal" for 1995, so I think
you can use historical averages for asset allocation. Steady as she
goes in '95.
/jim
|
| 805.6 | When to sell, when to buy | EVMS::HALLYB | Fish have no concept of fire | Tue Dec 20 1994 01:31 | 4 |
| The DJIA high for 1995 will come on March 1 or 2. The subsequent low
will come exactly 13 months later.
John
|
| 805.7 | My predictions ... | CSCMA::BALICH | | Tue Dec 20 1994 12:22 | 19 |
|
High Low
DJIA 4400 3600
Fed. Rate 6.250 5.00
30-Year Mort. 9.75 8.875
DEC stock 60.00 31.00
Fortune 1000 biggest gainer Merck
2nd choice Philip Morris
Fortune 1000 biggest loser Compaq (Inventory problems)
2nd choice Hewlet-Packard (Earning disappt.)
Digital employee count 12/95 58,000 - 62,000
|
| 805.8 | Buy puts THIS week?? | MILKWY::JSIEGEL | | Tue Dec 27 1994 12:46 | 12 |
| re: .0
Wouldn't it make sense to buy the Jan OEX puts THIS week, since
investors must all be thinking about selling on or shortly after Jan 3?
If they expect much selling to happen, the market will probably be
relatively quiet this week, with a big drop next tues. By buying the
puts this week you could catch tuesday's drop? I guess the counter
would be that there may be that the traditional Santa Clause rally will
happen this week, so there could be an advance this week. But wouldn't
the proposed tax cut/possible selloff negate this?
Just some questions from a novice...
|
| 805.9 | Its called a butterfly spread... | POBOX::CORSON | Higher, and a bit more to the right | Tue Dec 27 1994 16:32 | 7 |
|
If you insist on playing OEX options (I prefer Las Vegas myself
when gambling), try a put/call spread Jan/Mar options. Most brokers
can help. Use the butterfly technique, and be prepared to close out the
losers very fast.
the Greyhawk
|
| 805.10 | OEX can be a winner if you take the Casino side | MROA::WILKES | | Tue Jan 03 1995 13:16 | 9 |
| re .9
1994 was the all-time great year for selling OEX Calls and just sitting
and waiting for them to expire worthless. For the whole year the index
was down .19
I much prefer selling options to buying them. When you sell two of the
three things that can happen are good for you and only one is bad. It
is just the reverse when you buy.
|