20 - MANCHESTER HERALD. Fri., July M, 1982 1..', • ^ rf^- '• •0vv«V».f . .. Project Concern: lo you recognize • w .. t i''. '»,■ Can directors help? this baby face? Expert: We're in new bull .. page 6 ... page 11 ly 99 million shares on the Big Board (that’s stocks WEINSTEIN SAYS eight stock groups look especid- Good news. We’ve just entered a brand new bull you’re betting will go lower); alw, the hi^h short- ly exciting. They are aerospace, airlines, entertaip- market that should last for at least a year. interest ratio. That’s the ratio of short interest to ment, gambling, grocery chains, restaurants, mobile Says who? Manchester, Conn. average daily Big Board volume, which, at 2.07 percent, homes and homebuilders. ^ Mostly sunny Stan Weinstein, that’s who. Dan Dorfman By the same token, there are nine stock groups thfit In a hot-line message flashed to his roughly 10,000 sub­ is the highest reading, Weinstein tells me, since 1958. on S unday Saturday, July 24, 1982 •. The third year of any administration is the most look particularly weak — ones that Weinstein believes scribers last Friday, Weinstein, the 40-year-old Syndicated bullish for the stock market. Taking the last five such will be sub-parr performers in any market a d v a n c e ., — See page 2 Single copy 25q: publisher of the well-regarded Professional Tape The groups (With the two weakest stocks In each areaL- Reader, an investment newsletter out of Hollywood, periods — ’M, ’67, ’71, ’75 and ’79 — all were up years for Columnist the market; the average gain was about 16 percent. are: banks (Chemical and Bankers Trust); Canadian.. Fla., declared that the 13-month-old bear market is • The very high level of bearish sentiment among in­ Oils (Husky Oil and Dome Petroleum): coal (Eastern’. over. Gas & Fuel and Pittston); conglomerates (Gulf & "Now is the time to shift investment thinking from vestment advisers (invariably a good contrary In­ Western and L T V ); machinery (Caterpillar Tractor and sell to buy . and to use all market weakness for ac­ dicator). i Technically, Weinstein may be constructing a fine Deere); communications equipment (Rolm aiCl cumulating stocks,’’ he said. IN A LENGTHY telephone chat, Weinstein — who’s bullish case. But what about all the fundamental Scientific-Atlanta); insurance (American General aiSl This is a major reversal for Weinstein, who has essen­ advising both traders and investors to be 100 percent worries (such as high interest rates, poor earnings, Travelers Corp.); international oils (Exxon and GiW tially been bearish on the market since the June ’81 high committed to the “ long” (or buy) side — spelled out the Convention opens fears of a possible depression, questions about the Oil), and oil services equipment (Dresser Industries a f l on the Dow of about 1,025. reasoning behind his new bullish strategy. Halliburton). And based on the man’s record, his views merit a For starters, it should be noted thet Weinstein viability of banks and potential new outbreaks in the Mideast)? respectful airing. measures stock chart patterns in four stages: (1) “ That’s what the bear market of the past year has dis­ basebuilding: that’s laying the groundwork for a move STRICTI.V A technical analyst (who charts stock counted and is all about,” responds Weinstein. “ And to high levels; (2) advancing phase; (3) topping-out market’ patterns) and a fella with an above-average record of when things look-terrible or ghastly — as they do now — calling market turns, Weinstein’s been running a pretty phase, and (4) declining phase. , | that’s exactly how a bear market ends and new bull IT TARGET Phases 1 and 2 — denoting stock accumulation — are CE p r ic e hot hand. market begins.” I GOP set bullish; 3 and 4 — signifying stock distribution — are ob­ According to the Hulbert Financial Digest, a Bally Mfg. 29 Vz 45-50 viously quite bearish. W EINSTEIN RECALLS that in the final stages of Carl Karcher 14 Vt 22-» Washington, D.C., outfit that tracks the performances In analyzing the recent results of this indicator — 27-W of leading investment advisory letters, Weinstein’s been the ’74 bear market (in November of ’74), Newsweek Chi-Chi’s 18 V4 probably the single most important one of the 47 in­ 33 % 50-55 outperforming the market two-years running in his ran a picture of a big bear knocking down the pillars of Delta Air Lines dicators he tracks — Weinstein noted that on July 8, the Wall Street. And in the same month the Wall Street Denny’s 26 % 42-45 stock selections. day the Dow had fallen to as low as 784 during the ses­ 25-26 In ’81, the Professional Tape Reader’s model portfolio Journal published a story titled; World Depression? Fairchild Ind. 15 % sion (greatly heightening the bearish sentiment), 52 per­ “ What we’re really seeing is a replay,” says Weins­ Fleetwood Ent. 17 V4 28-iiii for tights racked up a gain of nearly 7 percent. This compared cent of the more 1,500 Big Board stocks recorded a with an '81 decline in the closely watched Standard & tein, who flatly predicts the pessimism will be washed Great Atl. & Pacif. 7 ‘A 12-13 Poor's 500-stock index of close to 10 percent. And thus favorable reading. away by rising Dow. He allows for the possibility of Jerrico 20 % 35-38 "That told me the market is quietly strengthening . early planning was that they would far in '82. the PTR portfolio is up a little over 4 percent, market selloffs, which could knock the Dow down to Liberty Homes 12 % 18-20 By Paul Hendrie and the last time I saw simitar patterns was when the 42-46 do that.” vs. over a 10 'h percent drop in the S&P index. perhaps the 790-800 level. But by year-end, he expects Luby’s Cafeterias 29 % Herald Reporter Dow hit its lows of 570 in December of ’74 and 740 in Bozzuto, like Rome, continued to As for his prowess in calling the market, his previous the Dow to top 900. And over the next 12 months, he sees McDonald’s 75 % 100-US March of ’78,” Weinstein says. insist that he has enough delegates interview with me ( ih early November of 81) attests to it going over 1,000 and possibly above its all-time Ntl. Coven. Stores 18 % 27-30 HARTFORD — Connecticut 35-46 for a first-ballot nbmination. HERE ARE some other keys bullish reasons: January ’73 high of 1,051. Oakwmid Homes 24 Republicans geared up behind the the man's ability. 16-li iVlanchester Republican Town At the time — with the Dow at about 840 — Weinstein • Fewer and fewer Big Board stocks hitting new lows OK, let’s say you buy Weinstein’s bullish scenario; Playboy Enterprises 9 % scenes at their state convention 32-35! Chairman Curtis M. Smith, a Rome told me: ‘We’re in for a rally, but then you’ve got to sell in recent weeks despite the sliding market averages and what stocks do you buy? Resorts Inti. 20 Friday night for today’s fights for At my request, Weinstein screened the chart patterns supporter who used to back Bozzuto, everything before year-end because the market’s in for the scary financial headlines (such as the failure of the Tet:h-Sym 10 % 18-aOt the gubernatorial and senatorial of over 4,000 Big Board, Amex and over-the-counter 20-2}' nominations. predicted Rome would win on the a drubbing in early ’82.” As he figured it, the Dow had Penn Square Bank in Oklahoma). U.S. Home 12 % issues and came up with a list of his favorite 20 stocks second ballot. the potential to rise' to the 880-990 range before his • Surging institutional cash reserves — namely, 11 Wendy’s 17 V4 26-30' Gubernatorial candidate Lewis B. for “ the new bull market.” (See accompanying chart 27-3lf Meanwhile, the third candidate in projected rally fizzled. percent in the hands of mutual funds (the highest since U.S. Air 16 % Rome won an appaient victory over for the names and target prices). Of the group, his five the race, state Sen. Gerald Labriola, He was right on the money. The Dow went as high as ’74) and about 19 percent at the banks (the highest in Target Price: within 12 months. chief opponent Richard C. Bozzuto favorites are Bally Mfg., Dela Air Lines, Denny’s, Source: Stain Weinstein, Professional in a Rules Committee fight, which of Naugatuck, continued to rule out 899 in mid-December and then tumbled to below 790 by several years). Tape Readqri: determined who would be a bid for*-lieutenant goveri)or. March of ’82. • The huge near-record short interest of approximate­ Fleetwood Enterprises and Tech-Sym. Hollywood, Fla. nominated first. Although a distant third in the delegate sweepstakes, most At a previous Rules. Committee UPI photo ^ in Brief- meeting, the candidates had drawn delegates believe Labriola holds the balance of power. randomly the order in which they SEN. LOWELL WEICKER would be nominated and Rome was Rome admitted Friday that he Permanent job? carries son, Tre, from convention floor to go first. was talking to Labriola about a deal, But Bozzuto forces Friday sought in which Labriola would throw his Dunn promoted to overturn that agreement. They support to Rome in exchange for the \ proposed that candidates be second spot on the ticket. But HARTFORD — hobert W. Dunn has been nominated in alphabetical order, Rome’s press secretary, Thomas promoted to co r­ Not any more which — of course — would place Sweeney, said Labriola maintains porate vice presi­ Bozzuto first.