I. Market News: Same Ol', Same Ol'
II. Heroes: Kaiser, Harrah's, Presstek, Coherent Comm.
III. Goats: Fingerhut, World Accept., Micron Tech., Cygne, Lund
IV. Investment Perspective: Counting On That Holiday Bounce
V. Calendar: Friday's Economic Events

MARKET CLOSE

DJIA: 5041.61, up 18.06 (RECORD)
S&P 500: 598.40, down 1.84
NASDAQ: 1021.24, down 3.75

MARKET NEWS

Yet another record for the DJIA. (Anyone tired of hearing that yet?) But the Dow closed considerably lower than its high for the day as the overall market turned a little bit southward in the late afternoon. Is this the ubiquitous profit-taking? Thanksgiving trends? Did you say your Uncle Elbert has predicted the following year's market accurately every year since the 50s based on whether he wins the wishbone pull? Nah, didn't think that was what you said. Must have been someone else. Happy Thanksgiving, Fools!

HEROES

Base metals came back into favor today as a number of issues in the group rallied after weeks of being ignored by the broader market. Kaiser Aluminum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:KLU)") else Response.Write("(NYSE:KLU)") end if %>, which focuses on aluminum and its raw component alumina, rose $1 3/8 to $13 7/8 on heavy volume. Kaiser is more volatile than other aluminum producers because of its high debt, although the Aluminum Company of America <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:AA)") else Response.Write("(NYSE:AA)") end if %> made a good showing by rising $2 5/8 to close at $57 3/4. Inland Steel <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IAD)") else Response.Write("(NYSE:IAD)") end if %>, up $2 1/4 to $26 3/4, made the best showing for the steel stocks today, although Nucor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:NUE)") else Response.Write("(NYSE:NUE)") end if %> came in a close second, rising $3 3/4 to $50 3/4. Lower interest rates bode well for metal demand because of its use in capital goods---should help the stock prices too.

MF Shorty's Shortfolio took a hit today when Harrah's Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:HET)") else Response.Write("(NYSE:HET)") end if %> rose $1 3/8 to $25 on news that its New Orleans Jazz location is filing for bankruptcy. Harrah's will write-off the investment in Jazz completely, taking a $0.55 to $0.60 charge per share against earnings in the next quarter. Investors reacted positively to the news because of the growing perception that the New Orleans location represented a quagmire of continuing operational difficulties in a changing political climate for gambling. Bear Stearns cut Harrah's to "neutral" from "attractive" and the prices of Harrah's debt plunged after news broke of the Chapter 11 filing. Although a short-term help for the company, one must wonder if forfeiting on its debt via a bankruptcy filing will not have a long-term negative effect on the company since it will increase its cost of capital. Regardless, MF Shorty in the Shorting Stocks folder (Let's Talk Investment Approaches Section of the Fool's School message board) probably has a take on today's action.

Presstek <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:PRST)") else Response.Write("(NASDAQ:PRST)") end if %>, the stock that many love to hate, rose $4 1/4 to $66 3/4 today in a flurry of short covering. Bears in the Presstek folder are a particularly nasty bunch, somewhat justified by the fact that they have lost a tremendous amount of money shorting this illiquid printing company. The complete implosion of Indigo NV <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:INDGF)") else Response.Write("(NASDAQ:INDGF)") end if %> gave these ursine pessimists some support, but apparently this has worn off of late. Presstek is allegedly under investigation by the Securities and Exchange Commission for reported trading violations of its principal owners, who also run Howtek <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:HWTK)") else Response.Write("(NASDAQ:HWTK)") end if %>. If you have a stiff upper lip and a belly-full of courage, you might want to venture into the dark and dreary chamber that is the Presstek folder for their take on today's move.

Echo-cancellation technology is a must for ATM network connections, according to MF MOM in the Networking folder. It is no wonder, then, that Coherent Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CCSC)") else Response.Write("(NASDAQ:CCSC)") end if %> has been taking off lately, rising $2 to $16 3/4 after a similar move yesterday. For the icky technical details, Fooldom has none better than MF MOM to give you some guidance whether Coherent is a really a buying opportunity or the overvalued product of a hysterical Internet-crazed market which is buying the concept and not the company. You also might want to ask her what she thinks of Cisco Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CSCO)") else Response.Write("(NASDAQ:CSCO)") end if %> at these levels, trading at a mere 30 times next year's consensus estimates, with a long-term growth rate of 45%.

GOATS

Fingerhut <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:FHT)") else Response.Write("(NYSE:FHT)") end if %> tumbled $1 1/8 to close at $13 1/8 today after Piper Jaffray cut its rating on the mail order catalog company because of "high delinquency rates in both existing and new accounts [that] will likely continue to negatively impact [sic] performance." The fact that the Minnetonka, Minnesota company sells overpriced "merchandise" might have factored into this rating change as well. Estimates for 1995 were slashed to $0.99 per share from $1.17 for 1995 and to $1.20 from $1.45 for 1996.

News about Fingerhut's troubles scared some more money out of the consumer lending stocks. World Acceptance Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:WRLD)") else Response.Write("(NASDAQ:WRLD)") end if %>, which serves roughly the same customer base, lost $2 to $11 1/2 on no news except growing fears of consumer defaults. TFC Enterprises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:TFCE)") else Response.Write("(NASDAQ:TFCE)") end if %>, a Norfolk-based auto-financing company, fell $3/8 to close at $6 1/2, the victim of tax-loss selling as well, we must assume.

Micron Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MU)") else Response.Write("(NYSE:MU)") end if %> continued its slide today, losing $2 7/8 to $47 3/4. Micron continues to get killed because of growing concerns, legitimate or not, that spot pricing of DRAM is in the tank and the contract prices will trend down as well. Estimates are being trimmed, ratings are being dropped, and momentum players are all bailing out. With Micron trading at about the same P/E versus next year's earnings as General Motors and International Paper, is this a fairly valued cyclical issue or an undervalued growth issue? Check out the Micron Technology folder for various Fools' takes on this question. Texas Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:TXN)") else Response.Write("(NYSE:TXN)") end if %> has been pounded along with Micron. Unlike Micron, however, Texas Instruments is not just another low cost DRAM producer; they are a diversified technology company. Trading at a mere $52 1/2, if they could warrant a mere 12 multiple in 1996, they would be worth around $80 per share by year's end.

Cygne Designs <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CYDS)") else Response.Write("(NASDAQ:CYDS)") end if %> came across yesterday with a massive charge against earnings, causing its $17 million trade credit facility to be suspended. The stock dropped $1 1/4 today to close at $1 5/8. Shareholders seem to have lost all hope in this penny stock, fallen fast from a height of $14 per share a year ago. A quick glance at a chart for the last year reveals a picture so ugly, you'd only hang it on your wall if you had to hide a big hole from your landlord.

Lund International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:LUND)") else Response.Write("(NASDAQ:LUND)") end if %> reported today that its second-quarter sales will fall below expectations and that it has reduced its work force by 10%. This caused a reduction in the stock price, however, slightly higher than 10%---down $3 3/8 to $10 3/4. Lund International makes accessories for automobiles and trucks. MF Boring passed on shares of Lund a few weeks before the stock began a long journey downward. Lund stated a few weeks ago that it would benefit from a trade show held in early November; doesn't look that way now. Morgan Stanley downgraded shares to "neutral" from "outperform" and cut their fiscal 1996 numbers to $1.10 per share.

INVESTMENT PERSPECTIVE: Numerology and Other Turkeys

Seasonality is one of those fuzzy concepts that academicians and traders both seem to love. Essentially, the belief is that certain times of year tend to be better for the stock market than others. These high periods tend to be clustered around holidays, for the most part, as well as the so-called "January effect." The Wise would have you believe that if you invest in the market at these specific times, you will benefit from the statistical correlation which suggests that the markets rise most of the time on these specific days.

Anyone Foolish enough to wear a jester cap should be able to guess that Fools at large consider the concept of timing your purchase of stocks pretty much hogwash. Even the vaunted book Beating the Dow---Michael O'Higgins's testament to Foolishness---attempted to time the market with the Halloween strategy. . . which came out as the Halloweenie strategy. Noting that on a net basis, the Dow had risen much more in the November to May period than in the June to October period, O'Higgins had people cashing out of Beating the Dow in May and buying back in during November. Although he said that the "risk-adjusted" returns were better, the overall showing was that it underperformed the traditional year-round approach.

Now, all of the academicians (the same bunch who dreamed up efficient markets) will gather together in little covens and point out that statistically, the market was up a tremendous percent of the time on the day before a certain holiday. The reason why this is so is sort of fuzzy; evidently, the belief is that the holiday spirit penetrates the cold hearts of floor traders and makes them suddenly sanguine and optimistic about the prospects for equities, sending stock prices higher.

Today, however, is living, breathing proof that the hysterical elements of the market will always overcome holiday cheer. The narrow index that is the Dow 30 managed to push up to higher ground, but the broader market was bleeding red by the day's end, with a half-baked rally in the technology stocks fizzling out mid-day and sending everyone running for the exits. The only turkeys today were the ones telling people to buy for a Thanksgiving pop; the rest of the turkeys will be on dinner tables tomorrow. And then in left-overs for weeks. . . and weeks. . . .

Certainly, some real-world factors back up the holiday effect, the January effect, and any other "effect" that is pronounced over a long period of time. In fact, Beating the Dow is in itself nothing more than a historically valid approach that seems to repeat itself again and again for a number of certifiable reasons. Even the January effect is informed by the tax-loss selling that occurs at the end of the tax-year. But the holiday effect seems to be a bit of a reach. The logic underpinning it is scanty at best and the data-series that supports it is fairly limited.

Full-blown modern markets, replete with multiple active players and comprising more than railroads, came to the fore in the 1920s. From this period, we have about 70 or so holiday seasons to measure. When someone tells you that sixty-six percent of the time the market was up on the day before Thanksgiving, all that really means is that in 46 of these periods the market was up and in 24 it was down. A handful of holidays shifted the other direction and all of the sudden you are back to that fifty-fifty crap-shoot that greets you every day when you come to the market. In fact, statistically the market is probably up more days than it is down on *any* given day, considering the long-term trend is so decidedly up for the last 60 years.

Common sense. Fundamentals. Growth and value. Diversification within a portfolio of stocks. Beating the Dow. Investing for Growth. These are the Foolish watch words. These are the things that are not just statistics, but that have worked for Fools for decades (paleoFools, I guess---Fools that predate the Fool). The rest of the tools of the Wise? Use them at your own peril. Many used the holiday effect to theirs today.

CALENDAR: Friday's Economic Events

---Initial Unemployment Claims (8:30)
---Weekly Fed Data (4:30)

Byline: Befumo/Sheard (MF Templar/MF DowMan)