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The Daily Dow LEXINGTON, Kentucky (11/25) -- Zoom ... 6,000 ... zoom, zoom ... 6,200 ... zoom, zoom ... 6,500! That's right, yet another century mark was scorched by the Dow today, pushing the market past 6,500 for the first time ever. Most big optimists were hoping for 6,000 by the end of 1996!
"Should we wait to start a new portfolio now until a correction occurs?" "Isn't it dangerous to buy stocks when the market is at an all-time high?" "Should we buy half a position now and wait for six months to see what happens?"
All of these questions are prominent in our message folders of late, and my answer is always the same. No one knows with any certainty what lies ahead for the stock market over the next few weeks, months, even over the next year or two. And anyone who declares otherwise is simply full of bluster.
Our position has always been that since no one can predict the short-term movements of the market with a reasonable degree of accuracy and consistency, why bother? For the long-term investor (read someone who measures time in decades, not hours), what happens in the short run is of little consequence.
So, if you're ready to start a savings program in the stock market for years and years to come, now is as good a time as any. And for those of you still inclined towards waiting for "the big correction," keep in mind that the very same questions were on investors' minds two years ago, when the market was at 3,900! (Waiting for the correction then would have you still waiting, while the market's up more than 65%.)
That's not to say the market won't drop the day after you invest; it very well might. The point is no one knows and the long-term odds are that the market will continue to rise at about 11% a year, and the Dow Approach should continue to do roughly twice that well. Everything else in between is just noise.
In company news today, Chevron announced that it will cease production for all offshore California sites between 1999 and 2001, many years sooner than the original plan called for. The decision is a simple one for Chevron. The environmental and regulatory barriers set up here in the United States have made it more feasible to deal with unstable foreign governments than to drill for oil here at home.
In a filing this month with the Securities and Exchange Commission, Chevron said that "an additional impairment write-down may result" from the field's rapid decline. Company officials declined to say how large such a charge may be, but analysts have said it is likely to total tens of millions of dollars.
And for Conoco, DuPont's energy division, the prospects look good for its bid to buy Santa Fe Exploration, which is currently owned by Kuwait Petroleum Co. The two other front-runners are Saga Petroleum AS, a Norwegian firm, and Japanese consortium including JNOC and Mitsubishi. The purchase is expected to price out from $750 million to $1 billion. The decision is likely to come by the end of November.
Today's Dow Numbers Stock Change Bid ------------------- DD +1 3/8 94.38 CHV + 3/8 67.75 MMM + 1/8 84.88 EK + 3/4 82.38 IMN + 1/2 31.50
Day Month Year History
FOOL-4 +0.72% 4.83% 32.62% 32.62%
DJIA +1.17% 8.60% 27.96% 27.96%
S&P 500 +1.11% 7.34% 22.91% 22.91%
NASDAQ +0.47% 4.82% 21.69% 21.69%
Rec'd # Security In At Now Change
1/2/96 142 DuPont 69.88 94.38 35.06%
1/2/96 149 3M 63.76 84.88 33.12%
1/2/96 380 Chevron 52.38 67.75 29.36%
1/2/96 148 E. Kodak 67.00 82.38 22.95%
7/16/96 14 Imation 26.16 31.50 20.42%
Rec'd # Security In At Value Change
1/2/96 380 Chevron 19902.50 25745.00 $5842.50
1/2/96 142 DuPont 9922.25 13401.25 $3479.00
1/2/96 149 3M 9500.09 12646.38 $3146.29
1/2/96 148 E. Kodak 9916.00 12191.50 $2275.50
7/16/96 14 Imation 366.21 441.00 $74.79
CASH $1883.65
TOTAL $66308.78
Transmitted: 11/25/96
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