The Contrarian's View, Vol. IX, #5
December 25, 1994

SPARRING WITH THE PRESS

Yesterday (December 22) I received a phone call from a writer at Individual Investor magazine who was doing an article on contrary investing (it should appear in early February), and he was searching for someone who could describe contrary investing in terms succinct enough to compress into his story. He caught me at the end of a long, frustrating, and ultimately, unsuccessful afternoon I had spent trying to install "Trumpet Winsock" software on my office PC, so I was in a curmudgeonly mood.

He first wanted to know if I recommended contrary investment strategies for everybody. Of course not, I replied.... I wanted most people to be part of the herd, so there would be bargains left for the few of us who are contrarians. If everybody was a "contrarian", by definition contrary investing would seek to exist, because no bargains could be found.

Then he was looking for a "philosophy of contrary investing" that would, in a few succinct words, express the strategy that successful investors should follow. I told him I didn't think there was any such thing.... that contrarian investing depends as much on one's personality as on knowledge, and that most people were not emotionally capable of bucking the conventional wisdom even if intellectually they agreed with the strategy.

But I did continue to sum up my idea of contrary investing as best I could. I told him that, in my experience, the best investments were stocks which represented solid value in the underlying companies, but were currently out of favor, and which had the potential to be discovered or rediscovered by the money managers. The second part is key, because the shares of many companies are rightfully depressed because a company is going nowhere or is likely to become defunct.

As an example, I offered up the story of the closed-end mutual funds invested in German stocks when the Berlin Wall fell in 1989. At the time there was so much enthusiasm about the end of the cold war, the "peace dividend", and about the German economic renaissance that would occur with reunification, that the fund shares traded at premiums of 10% or more to their asset values.... and of course, new funds were created to fill the demand.

Three years later, the much-heralded economic renaissance had yet to occur; the former West Germany had considerably more difficulty absorbing the former East Germany than most people (contrarians excepted, of course) had anticipated, and the usual closed-end-fund discounts of 10% to 25% had returned.... on asset values which had also declined. Only the persistent weakness of the dollar had softened the blow for U.S. investors, as the loss in dollars was less than in marks.... and this turned out to be a bad example for our writer, because he had difficulty understanding how a declining dollar could protect the value of an investment valued in a strong foreign currency. (If he has trouble understanding this simple concept, I though to myself, how can he be a writer for a financial magazine?)

Then I threw another curve at him.... that, even for contrarian investors, there are times (such as now) when it might be best to do nothing. When the stock market as a whole is grossly overvalued (in relation to its historical norms), there aren't many bargains left, and there are enough people seeking them out that even the "bargains" are (historically) overpriced. The nature of a bear market is, not only do the overpriced and "good" stocks go down, but the bargains become even bigger bargains. It pays to wait until the bear recedes.... the best money is made by buying depressed stocks at the beginning of a bull market.

As we neared the end of the phone interview, the writer asked me if I had any suggestions for good contrarian stock purchases. At this point I got a little annoyed.... I felt he hadn't gotten the message. Look, I replied, it's typical of financial publications to always want to get recommendations for some stock to buy. The only area I currently see as possibly grossly out of favor is the precious-metals stocks.... but really, there is nothing wrong at the moment with just being in cash. This is the advantage of being a contrarian investor in individual stocks..... you have only yourself to satisfy, and if you want to be 100% in cash, you can do it. You have an advantage over the money managers, because their clients send them money to buy stocks, not sit on piles of cash, so they must be invested somewhere. Right now, cash looks like the best bet to me.... CASH! CASH! CASH!, I shreiked into the telephone.

Generally, I try to avoid these interviews, because I don't consider myself to be in the entertainment business, but somehow these people manage to find me anyway, and I hate to turn them down. (I persist in the vain hope that one of them will really understand what I'm saying.) This is in contrast to many letter writers who engage in shameless self-promotion; and even the best advisors (measured by the quality of the advice they give) are not publicity-shy, because they make their living from their musings, and for them media exposure is free advertising. Contrast this with The Contrarian's View, which is the ongoing record of what I do with my money. What you do with your money is your business; I would not be so presumptuous to tell you what's best for you.

Oh, by the way, about that "Trumpet Winsock". If you know how to make the virtual packet driver WINPKT.COM work with the packet driver for the DEC EtherWORKS 3 Turbo Ethernet Controller card, would you please E-mail me the answer at nick15@eve.assumption.edu? Then perhaps the next inquisitive reporter will find me in a better mood.

QUOTE FOR THE MONTH

No one really listens to anyone else, and if you try it for awhile you'll see why. - Mignon McLaughlin

STOCK MARKET OUTLOOK

For some time now I've been burbling on about how grossly overpriced the stock market is, and how a sharp selloff could appear without warning. And during that time, the stock market, as measured by the popular averages, has been stuck in a trading range in the high 3000s on the DJIA.... and you are probably wondering what the heck I'm talking about. So I think it may be time to again show the following table, updated for the current dividend yield on the Dow 30.

This table came about from my observation that, since computerized arbitrage trading became a major factor in the stock market, large-cap stocks have traded in a range such that their yield is between one-half and three-fourths that of six-month Treasury bills, and that they are "fairly priced" when their yield is about two-thirds that of the six-month bills. There are exceptions, of course; the relationship breaks down at extremes of interest rates, when stocks are restrained by fundamental measures of value.... the Dow did not go over 5000 in October 1993, for example, when T-bill rates were 3.6%.... but now interest rates have risen to the point where stocks are "back in range" and the table again applies (I think).


T-bills %        Min         Ave          Max
4%              3540        3980         5311
4.25            3330        3750         5000
4.5             3150        3540         4720
4.75            2980        3555         4470
5%              2835        3185         4250
5.25            2700        3185         4045
5.5             2575        2895         3865
5.75            2465        2770         3695
6%              2360        2655         3540
6.25            2265        2550         3400
6.5             2180        2450         3270
6.75            2100        2360         3150
7%              2025        2275         3035
7.25            1955        2200         2930
7.5             1890        2125         2835
7.75            1825        2055         2740
8%              1770        1990         2655
8.25            1715        1930         2575
8.5             1665        1875         2500
8.75            1620        1820         2430
9%              1575        1770         2360
With six-month bills currently about 6.5%, "fair value" for the Dow is under 2500; and the Dow is currently trading about 16% above the maximum of the range in the table. By way of comparison, in 1987, as interest rates rose, the Dow became similarly overpriced before the Crash. And when stocks did crash, they plunged right through the fair-value level, and touched the lower end of the (then-applicable) table's trading range before resting and embarking on a new bull market.

But this is not 1987. Once you get away from the computer-traded stocks, you find that we have been in a bear market since January, and the 30% decline shown by utility and transportation issues, and many of the small-cap issues on the over-the-counter market, is very typical bear-market behavior in a period of rising interest rates. So of course, the question is, what gives with the blue-chip issues?

I've given this question some thought, and I think I have the answer. In 1987, the Crash was aggravated by "portfolio insurance" run amok, where plunging futures on stocks forced computers to sell stocks, which caused further plunging in futures.... in a self-reinforcing cycle. After the Crash, the exchanges imposed the "collars" on prices; when the Dow drops more than 50 points, the computers are "unplugged", the pressure caused by the computerized arbitrage abates, and stocks.... usually.... right themselves.

Ostensibly the collars were designed to keep "the public" from panicking and to maintain orderly markets. In reality, portfolio insurance and other computer games never disappeared.... they've actually returned stronger than ever.... and the real effect of the collars is to reduce the risk of computerized arbitrage trading, because the computers are turned off before they're allowed to shoot themselves in their collective feet and create a meltdown.

As a result, the quants and rocket scientists who write the computer programs that do this stuff have designed trading strategies that are profitable on thinner margins than before (because, in theory, a meltdown cannot occur), so the blue-chip stocks, those in the popular averages, can continue to be "safely" held while the computers arbitrage profits from them, at prices far above "fair" value as reflected by the yield on competing investments.

The key question is, is there a point where the quants have outsmarted themselves and the process breaks down? I think there is.... when too much money drains away from stocks. Recall that the current bear market (for most stocks) has been taking place while money has, on balance, continued to pour into stock mutual funds (which means that some very clever people have been selling stocks to the latecomers). Only in the past month or two have we seen net redemptions.... and the stock market has been getting "thinner", with the computer games assuming increasing importance. Also recall that at least half of the money in mutual funds was sent in above DJIA 3600, and that, maybe, some of those mutual-fund owners are getting anxious that the fantastic gains of the 1980s have yet to materialize in the 1990s.

As the bear grinds on, and competing investments look more attractive in relation to the puny yields and overall returns of stocks, I expect redemptions to increase, then turn torrential. Finally, the prices of blue-chip stocks will turn lower as money managers are forced to sell to meet redemptions, and the computers will be in trouble.... because share prices will not snap back when the machines are unplugged. (We've already had a few of these days in the current bear market, where the Dow is off 80 or 90 points for the day in spite of the collars.... and this is a warning sign.)

In 1987, the Dow dropped 1000 points from its August high to the October low, with more than 600 million shares traded on the busiest days. In the next crash, the Dow may well drop 1000 points with no shares traded, because the collars will force the markets closed. At least in 1987, the stock market was liquid and investors could bail out, even if it was at the bottom. If the markets are closed, sell orders from frightened novices will simply pile up with no chance for them to be filled, and the resulting imbalance, when the markets do finally reopen, will result in prices much lower than would otherwise occur. (This is what happened in Hong Kong in 1987.)

The current bear market, at its current level, rates as "moderate" (blue chips excepted) in relation to most of the postwar bear markets, so there is expectation in some quarters that we are at or near its end.... especially since years ending in "5" are consistently bullish, and the last two years of the terms of most presidents are also consistently bullish. I can't blame you if you feel the urge to buy into these bullish arguments.... history is on your side.... but I wll feel much more comfortable that the current bear market is over when the blue chips join the rest of the market at more realistic levels. If you must buy something, at least shop around among the stocks that are marked down 30% or more; don't buy the blue chips.

For the short term, I think a "bounce" for the first three weeks in January is possible, and if "Timer's Trend" gives a buy signal, I expect to play it. (Cash can be sooooo boring.) Beyond that, I think hopes have been raised by the shifting political picture, with a Republican incoming Congress. I think the reality will be gridlock as usual; I don't expect any reduction of marginal or capital-gains tax rates, which would give stocks a lift. It's more likely that share prices will begin discounting the 1996 recession.... even in the blue chips. The conventional wisdom is that Republicans can grow the economy better. That may be true over the very long term.... but the last time I checked, cutting government spending and balancing the budget was deflationary policy.... not good for either the economy or stocks, short-term.

A word about gold stocks: It saddens me to say that the "window of opportunity" is closing on them. At current depressed levels they are still a good buy, and inflation.... and probably the price of gold.... will perk up in 1995. But the pre-emptive interest-rate increases by the Federal Reserve mean that 1970s-style inflation is not going to occur soon, and the coming bounce in precious-metals shares should be regarded as a trading opportunity. Of course, some precious-metals shares should always be held as insurance, and increasing commodity demand for both gold and silver should mean steadily-climbing prices and a reasonable return on your mining-stock holdings (from current levels). But we're simply not going to see $1200 gold, and a quintupling of the stocks, within the next two or three years (barring a financial accident). That will have to wait until Alan Greenspan leaves the Federal Reserve and is replaced by an inflationist, or until the next millenium when the threat of bankruptcy of the U.S. Government becomes more immediate.

PORTFOLIO REVIEW

The combined performance of the portfolios (excluding "Discards" and TIAA/CREF) from January 1987 to the present, adjusted for the dilutive effect of added cash, is +33.75%, for a compound annual rate of return of 3.71%. For comparison purposes, from January 1, 1987 to December 23, 1994 (7.978 years), the CREF stock unit value (whose performance closely parallels the S&P 500 with dividends reinvested) has risen 134.25%, for a compound annual rate of return of 11.26%. WARNING: I am a rotten stockpicker. Prices shown are as of December 23.

A. "Hedger's Delight" -real portfolio, includes commissions:

                                                                         Current
    Shrs        Description             Bought  Sold On Sold At Cost Is   Value
    ---- ------------------------------ ------- ------- ------- -------  -------
    100  Amax Gold wt$21/8Jan96         21Feb92   {AUws/ase}     181.10    18.75
    100  Amax Gold wt$21/8Jan96          5May93                   84.85    18.75
    100  Atlas wt$15.625/perpetual      15Jun89   {AZws/ase}     490.00    87.50
    100  Atlas wt$15.625/perpetual      31Dec91                  263.60    87.50
    100  Atlas wt$15.625/perpetual      10Feb93                  167.35    87.50
    125  Aurora Electronics       SHORT         30Nov92 1331.48          -640.63
     25  Aurora Electronics             16Mar93   {AUR/ase}      312.50   128.13
    200  Campbell Resources             15Sep88   {CCH/nyse}     220.00   112.50
    300  Campbell Resources             14Dec88                  206.25   168.75
    125  Campbell Resources             26Dec90                   47.50    70.31
      1  Citicorp call$20/21Jan95              14Sep94 -2425.00         -2162.50
      1  Citicorp put$35/21Jan95        22Sep94   {CCIMG/cboe}    37.50    12.50
     14  Coherent Communications  SHORT          3Aug94   70.00          -241.50
    100  Glamis Gold               .12   1Jun89   {GLG/nyse}     109.00   812.50
     75  Hasbro .28               SHORT         30Nov92 2582.70         -2165.63
      1  Homestake LEAPcall$25/20Jan96  19Sep94   {LHMAE/cboe}   263.05   100.00
    100  Magma Copper B           SHORT  4Jan93         1294.75         -1625.00
    100  Magma Copper wt$8.50/30Nov95    4Jan93   {MCUws/nyse}   875.00   825.00
      3  MajMktIdx LEAP put$35/15Dec95  29Jul93   {LTBXG/ase}    735.46   337.50
      2  MajMktIdx LEAP put$40/21Dec96  14Oct94   {LTBXH/ase}    486.84   425.00
    100  Pegasus Gold              .10  25Apr91   {PGU/ase}     1122.33  1087.50
      1  Placer Dome LEAPcall$30/20Ja96 26Oct94   {LPDAF/cboe}   235.05   112.50
      2  S&P500 LEAP put$40/15Dec95     17Aug93   {LSXXH/cboe}   342.30   125.00
      2  S&P500 LEAP put$45/21Dec96     17Oct94   {LSZXI/cboe}   436.10   387.50
     40  Safeguard Scientifics    SHORT          6Dec85  181.78          -680.00
    100  Sunshine Mining                15Dec88   {SSC/nyse}     371.25   175.00
    200  Union Carbide .75        SHORT         19Aug94 6391.30         -5975.00
         CASH                                                   3320.24  3320.24
                                                        ------- ------- --------
                                                       11852.01 7882.27 -4990.32
SUMMARY - "Hedger's Delight":
             Original cost:          $10,455.77
             Present value:          $ 6,861.69
             Increase:               $-3,594.08   [-34.37%]
             Yield:                  $   -81.00   [-0.77%]
The performance of this portfolio from January 1987 to the present (adjusted for the dilutive effect of added cash) is - 32.65%, for a compound annual rate of return of -4.82%.

COMMENT on "Hedger's Delight":There is no change from last month.

B. "Present and Future Income" - real portfolio, includes commissions:

                                                                         Current
    Shrs        Description             Bought  Sold On Sold At Cost Is   Value
    ---- ------------------------------ ------- ------- ------- -------  -------
    100  Bank of NY wt$62/14Nov98        2Oct90   {BKNYW/otc}    222.35  1150.00
    128  Citizens Utilities 'A'     .75  8Apr91   {CZNA/nyse}    957.21  1648.00
     33  Continental Mortgage EqTr  .60 23Dec93   {CMETS/otc}    412.50   486.75
    3.2  Duke Realty Investments   1.80 14Dec87   {DRE/nyse}      66.00    84.80
    3.3  Duke Realty Investments   1.80 15Dec87                   68.75    87.45
    7.5  Duke Realty Investments   1.80 14Nov88                  193.60   198.75
    300  Hanson wtB,300pence/30Sep97    15Jan92   {HANwsB/ase}   126.10    93.75
    100  Manville wt$9.40/5Jun96        26Oct90   {MVLws/nyse}    71.10   150.00
    100  Northeast Util wt$24/5Jun97    15Nov93   {NUWTW/otc}    222.35   100.00
      8  Northeast Util wt$24/5Jun97    23Dec93                   18.00     8.00
     13  Southwestern Property Trst .88 31Dec93   {SWP/nyse}     164.13   157.63
         CASH                                                   8143.29  8143.29
                                                        ------- ------- --------
                                                               10665.38 12308.42
SUMMARY - "Present and Future Income":
             Original cost:          $ 9,548.98
             Present value:          $12,308.42
             Increase:               $ 2,759.44   [28.90%]
             Yield:                  $   144.19   [1.51%]
The performance of this portfolio from January 1987 to the present (adjusted for the dilutive effect of added cash) is +44.24%, for a compound annual rate of return of 4.70%.

COMMENT on "Present and Future Income": There is no change from November.

C. "Crapshooter's Folly" - real portfolio, includes commissions:

                                                                         Current
    Shrs        Description             Bought  Sold On Sold At Cost Is   Value
    ---- ------------------------------ ------- ------- ------- -------  -------
    100  Allou Health & Beauty    SHORT         13Jan94 1047.61          -775.00
    100  Allou Health & Beauty          18Mar93   {ALU/ase}      865.98   775.00
    100  Baker-Hughes wt$36.75/31Mar95   2Mar92   {BHICW/otc}    222.35     1.56
    100  Brock Exploration              25Feb92   {BKE/pse}      153.60   350.00
    100  Chemex Pharmaceut wt$6/31Mar94  4Dec89   {CHMXL/otc}     82.50     3.13
      2  Chyron                         21Dec89   {CHY/nyse}       4.12     1.00
    101  Chyron wt$.20/31Jan96          21Jan92   {CHYws/mse}    101.00    25.25
    200  Gulf Canada Resources           1Dec92   {GOU/ase}      579.85   625.00
    150  Medical Resource               17Jan92   {MRA/ase}      222.35   187.50
    200  National Enterprises           27Nov89   {NEI/nyse}     110.00     9.38
    100  Nabors Industries              30Jul93   {NBR/ase}      577.50   637.50
    100  Pride Petroleum Services       30Jan92   {PRDE/otc}     469.85   518.75
     39  Scios-Nova wt$26.75/30Jun98    19Dec89   {SCIOZ/otc}    165.00    73.13
    100  Smith Intern'l wt$8.28/28Feb95 27Dec91   {SIICW/otc}    304.85   400.00
    100  Tide West Oil wt$3/21Jun96     17Jan92   {TIDEW/otc}     71.10     3.13
    100  Unit Corp. wt$4.375/31Aug96    13Nov89   {UNTEW/otc}     68.75    37.50
    100  Vet Centers Am wt$7.20/10Oct96 10Mar92   {VCAIW/otc}    126.10   143.75
    100  Wendt-Bristol Hlth wtA/1May95  18May92   {WMDws/ase}    139.85    62.50
         CASH                                                  12239.76 12239.76
                                                       -------  ------- --------
                                                       1047.61 16504.51 15318.02
SUMMARY - "Crapshooter's Folly":
             Original cost:          $10,817.13
             Present value:          $16,366.43
             Increase:               $ 5,549.30  [51.30%]
             Yield:                  $      .00  [0.00%]
The performance of this portfolio from January 1987 to the present (adjusted for the dilutive effect of added cash) is +66.71%, for a compound annual rate of return of 6.62%.

COMMENT on "Crapshooter's Folly": There is no change since the last issue.

D. "Discards" - stocks even I have given up on for one reason or another (bankrupt company, too much paperwork, held too long with no profit, corrupt management, or change in personal objectives). This model portfolio includes commissions when I have actually sold my holdings, but does not include commissions when I still own the stock that was transferred to here from one of the other portfolios. (In the latter situation, I would probably have to PAY the broker to take the stuff off my hands.) I make no claims for the performance of this portfolio; I'm as curious as you are to see how it turns out.

                                                                         Current
    Shrs        Description             Bought  Sold On Sold At Cost Is   Value
    ---- ------------------------------ ------- ------- ------- -------  -------
   1000  Altex Industries               23Dec93   {otc}           93.75    93.75
    200  Avitar                         23Dec93                   12.00    12.00
    500  Breakwater Resources           26Jun91   {otc}          250.00    46.88
    125  Horizon Resources               1Dec93   {otc}            7.81     7.81
         CASH                                                    172.36   172.36
                                                        ------- ------- --------
                                                                 535.92   332.80
SUMMARY - "Discards":
             Original cost:          $ 1,266.28
             Present value:          $   332.80
             Increase:               $  -933.48  [-73.72%]
COMMENT on "Discards": There is no change from the last issue.

E. Commerce/INVEST/Bull&Bear IRAs - real portfolio, includes commissions:

                                                                         Current
    Shares         Description          Bought  Sold On Sold At Cost Is   Value
    --------  ------------------------- ------- ------- ------- -------  -------
       32     Berkshire Gas        1.08 11Apr88   {BGAS/otc}     560.00   480.00
       35.87  Bull&Bear Gold Investors  30Oct89   {BBGIX/otc}    577.64   553.12
        5     CIGNA 10Jul2010cvbd 82.00 12Oct90   {CI.CC/nyse}  3915.00  5037.50
      203     New Germany Fund      .50 20Dec91   {GF/nyse}     1977.50  2309.13
       40     New Germany Fund      .50  8Jun94                  476.00   455.00
      200     People's Bank of CT   .24 15Nov89   {PBCT/otc}    1690.21  2400.00
      100     Tuscon Electric Pwr 1.60j  4Oct89   {TEP/nyse}    2437.21   300.00
      100     Unicom Corporation   1.60 11Apr88   {CWE/nyse}    2728.83  2400.00
              Money market & accrued interest                   3323.14  3366.97
                                                              --------- --------
                                                             $ 17729.36 17301.71
SUMMARY - IRA:
             Original (1983-86) cost: $ 8,326.19
             Present value:           $17,301.71
             Increase:                $ 8,975.52   [107.80%]
             Current yield:           $   929.73   [5.27%]
The performance of this portfolio (including its predecessors) from January 1, 1987 to the present is +57.76%, for a compound annual rate of return of 5.89%.

COMMENT on IRAs: Though my IRA is now comfortably ensconced at Fidelity, I have yet to get my PC connection working so I can access it. (Maybe next week!) Next year, look for a substantial change.... my wife is on medical leave from her job (a fascinating story, one I hope I can relate in a future issue), part of which is unpaid, and we will be living one one salary for part of next year. Therefore I have discontinued the "supplemental" part of my retirement plan for next year, and I will be rolling it over into my IRA (which is a already a rollover IRA), primarily because TIAA/CREF threatens to impose switching limits and I feel I had better take direct control of the funds while I have the opportunity. I'm not sure how I'll treat this in calculating perofmance, since the IRA will almost quadruple with the influx of cash.... I may treat it as a "discontinuity".

F. CREF Pension plan; I switch between indexed stock/bond/money funds:


Date            Sold                Bought
27Jan92	        stock @ 57.82       MM @ 13.34
10Mar92         MM @ 13.40          stock @ 56.95
13Mar92         stock @ 56.65       MM @ 13.41
29Apr92         MM @ 13.48          bond @ 31.19
19Jun92         bond @ 32.14        MM @ 13.55
29Jun92         MM @ 13.57          stock @ 56.74
24Jul92         stock @ 56.76       MM @ 13.61
29Oct92         MM @ 13.72          stock @ 58.61
23Dec92         stock @ 61.48       MM @ 13.78
Values on 23Dec94: stock, 69.69; MM, 14.78
Gain, 1988: 18.91%; 1989: 14.48%; 1990: 8.28%; 1991: 27.93%; 1992: 10.20%; 1993: 3.08%
Gain, January 1 through September 30, 1994: 2.96%
Total gain since January 1, 1988 (6.75 years): 120.57%
Compound annual rate of return: 12.43% (My long-term target: in excess of 15%)
Gain shown excludes the impact of additional monthly cash contributions.
Buying CREF stock on January 1, 1988 and holding it gained 125.96%, for a compound annual rate of return of 12.84%.

G. Current unfilled portfolio good-til-cancelled orders:
GTC BUY - 100 Amax Gold @ 5-1/2, 100 Horsham @ 9-1/8, 200 Manville 1996 warrants ($9.40 to 5Jun96) @ 1/2.

COMMENT on "Timer's Trend": Although we're still on a sell signal, the more sensitive 10% exponential no longer says sell.... so watch the "computer warmline" closely, there may be an opportunity to ride a stab at the old highs (for the popular averages, not the broad market) and pick off a gain of a few percent.

================================  TIMER'S TREND ===============================
Mon  2 May 94        .  I# .       | 3701.02  |-.                        *
Tue  3 May 94        . #I  .       | 3714.41  |.~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed  4 May 94        .# I  .       | 3697.75  |-.                 *
Thu  5 May 94        .# I  .       | 3695.97  |-.                *
Fri  6 May 94     #  .  I  .       | 3669.50  | -           *
Mon  9 May 94    #   .  I  .       | 3629.04  | . - *
Tue 10 May 94        .# I  .       | 3656.41  | . -      *
Wed 11 May 94     #  .  I  .       | 3629.04  | .  -*
Thu 12 May 94        .# I  .       | 3652.84  | .  -     *
Fri 13 May 94        #  I  .       | 3659.68  | . -       *
Mon 16 May 94       #.  I  .       | 3671.50  | . -         *
Tue 17 May 94        . #I  .       | 3720.61  | . -                   *
Wed 18 May 94        .  I #.       | 3732.89  | -                        *
Thu 19 May 94        .  | #.       | 3758.98  |-.~~~~~~~~~~~~~~~~~~~~~~~*
Fri 20 May 94        . #|  .       | 3766.35  |-.                     *
Mon 23 May 94        .# I  .       | 3742.41  + .                *
Tue 24 May 94        .  |# .       | 3745.17  + .                 *
Wed 25 May 94        . #|  .       | 3755.30  |-.                   *
Thu 26 May 94        .  |# .       | 3753.46  |-.                   *
Fri 27 May 94        .  |# .       | 3757.14  + .                   *
Tue 31 May 94        . #|  .       | 3758.37  + .                    *
Wed  1 Jun 94        .  |# .       | 3760.83  + .                    *
Thu  2 Jun 94        .  |# .       | 3758.99  + .                    *
Fri  3 Jun 94        .  |# .       | 3772.22  + .                      *
Mon  6 Jun 94        .  |# .      }| 3768.52  + .                      *
Tue  7 Jun 94        . #|  .       | 3755.91  + .                   *
Wed  8 Jun 94        . #|  .      [| 3749.45  + .                  *
Thu  9 Jun 94        .# |  .       | 3753.14  |-.                   *
Fri 10 Jun 94        .  |# .      ]| 3773.45  |-.                       *
Mon 13 Jun 94        .  |# .       | 3783.12  |-.                        *
Tue 14 Jun 93        .  |  #       | 3814.83  +~.~~~~~~~~~~~~~~~~~~~~~~~*
Wed 15 Jun 94        .  #  .       | 3790.41  + .               *
Thu 16 Jun 94        .  |# .       | 3811.34  |+.                   *
Fri 17 Jun 94        .# |  .      [| 3776.78  + .            *
Mon 20 Jun 94     #  .  I  .      {| 3741.90  |-.     *
Tue 21 Jun 94    #   .  I  .       | 3707.97  |~*-~~~~~~~~~~~~~~~~~~~~~~~     
Wed 22 Jun 94        . #I  .       | 3724.77  | .-        *
Thu 23 Jun 94      # .  I  .       | 3699.09  | .  - *
Fri 24 Jun 94   #    .  I  .       | 3636.94 @|~.~~~-~~~~~~~~~~~~~~~~~~~~     
Mon 27 Jun 94        #  I  .       | 3685.50  | .  -            *
Tue 28 Jun 94      # .  I  .       | 3669.64  | .  -         *
Wed 29 Jun 94        #  I  .       | 3667.05  | .  -        *
Thu 30 Jun 94     #  .  I  .       | 3624.96  | .  -*
Fri  1 Jul 94        .# I  .       | 3646.65  | . -     *
Tue  5 Jul 94        .# I  .       | 3652.48  | . -      *
Wed  6 Jul 94        .# I  .       | 3674.50  | .-            *
Thu  7 Jul 94        .  &  .       | 3688.42  | .-               *
Fri  8 Jul 94        . #I  .       | 3709.14  | -                    *
Mon 11 Jul 94        #  I  .       | 3702.99  | -                   *
Tue 12 Jul 94        .# I  .       | 3702.66  | -                   *
Wed 13 Jul 94        .  &  .       | 3704.28  | -                   *
Thu 14 Jul 94        .  |  #       | 3739.25  |-.                        *
Fri 15 Jul 94        .  |# .       | 3753.81  |-.~~~~~~~~~~~~~~~~~~~~~~~~*
Mon 18 Jul 94        .  | #.       | 3755.43  + .                    *
Tue 19 Jul 94        .  #  .       | 3748.31  |+.                   *
Wed 20 Jul 94        #  I  .       | 3727.27  + .              *
Thu 21 Jul 94        . #I  .       | 3732.45  |-.               *
Fri 22 Jul 94        . #I  .       | 3735.04  |-.                *
Mon 25 Jul 94        .  &  .       | 3741.84  |-.                 *
Tue 26 Jul 94        .# I  .       | 3735.68  | -                *
Wed 27 Jul 94        #  I  .       | 3720.47  | -             *
Thu 28 Jul 94        . #I  .       | 3730.83  | -               *
Fri 29 Jul 94        .  |  #       | 3764.50  |-.                      *
Mon  1 Aug 94        .  |  .#     }| 3798.17  +~.~~~~~~~~~~~~~~~~~~~~~~~~*
Tue  2 Aug 94        .  |  #       | 3796.22  |+.                   *
Wed  3 Aug 94        .  |  #       | 3792.66  | +                   *
Thu  4 Aug 94        .  #  .       | 3765.79  | +             *
Fri  5 Aug 94        .# |  .      [| 3747.02  |+.         *
Mon  8 Aug 94        .  #  .      ]| 3753.81  + .           *
Tue  9 Aug 94        . #|  .      [| 3755.76  + .           *
Wed 10 Aug 94        .  |# .      ]| 3766.76  |-.             *
Thu 11 Aug 94        #  I  .      {| 3750.90  |-.          *
Fri 12 Aug 94        .  |# .       | 3768.71  |-.              *
Mon 15 Aug 94        .  #  .       | 3760.29  |-.            *
Tue 16 Aug 94        .  |  #      }| 3784.57  + .                 *
Wed 17 Aug 94        .  |  #       | 3776.48  + .               *
Thu 18 Aug 94        .  #  .       | 3755.43  |+.           *
Fri 19 Aug 94        .  |# .       | 3755.11  |+.           *
Mon 22 Aug 94        .  #  .      [| 3751.22  |+.          *
Tue 23 Aug 94        .  |  #      ]| 3775.83  |+.               *
Wed 24 Aug 94        .  |  #       | 3846.73  |+.~~~~~~~~~~~~~~~~~~~~~~~~*
Thu 25 Aug 94        .  | #.       | 3829.89  |+.                *
Fri 26 Aug 94        .  |  . #     | 3881.05  | +                        *
Mon 29 Aug 94        .  |  .#      | 3898.85  |~.+~~~~~~~~~~~~~~~~~~~~~~~*
Tue 30 Aug 94        .  |  . #     | 3917.30  | .+                      *
Wed 31 Aug 94        .  |  .#      | 3913.42  | . +                     *
Thu  1 Sep 94        . #|  .       | 3901.44  | .+                   *
Fri  2 Sep 94        .  |# .       | 3885.58  | +                 *
Tue  6 Sep 94        .  |# .       | 3898.70  | +                    *
Wed  7 Sep 94        .  |# .       | 3886.25  |+.                 *
Thu  8 Sep 94        .  |  .#      | 3908.46  |+.                      *
Fri  9 Sep 94       #.  I  .       | 3874.81  + .               *
Mon 12 Sep 94        #  I  .       | 3860.34  |-.            *
Tue 13 Sep 94        . #I  .       | 3879.86  |-.                *
Wed 14 Sep 94        .# I  .       | 3895.33  | -                   *
Thu 15 Sep 94        .  |  .#      | 3953.88  |~-~~~~~~~~~~~~~~~~~~~~~~~~*
Fri 16 Sep 94        #  I  .       | 3933.35  |-.                *
Mon 19 Sep 94        .  &  .       | 3936.72  |-.                *
Tue 20 Sep 94     #  .  I  .      {| 3869.09  | -   *
Wed 21 Sep 94     #  .  I  .       | 3851.60  |~*-~~~~~~~~~~~~~~~~~~~~~~     
Thu 22 Sep 94       #.  I  .       | 3837.13  |~.~-*~~~~~~~~~~~~~~~~~~~~~     
Fri 23 Sep 94       #.  I  .       | 3831.75  | . -  *
Mon 26 Sep 94       #.  I  .       | 3849.24  | .  -     *
Tue 27 Sep 94        .# I  .       | 3863.04  | . -         *
Wed 28 Sep 94        .  &  .       | 3878.18  | .-             *
Thu 29 Sep 94        #  I  .       | 3854.63  | .-        *
Fri 30 Sep 94        .  &  .       | 3843.19  | -       *
Mon  3 Oct 94        .# I  .       | 3846.89  | -       *
Tue  4 Oct 94    #   .  I  .       | 3801.13  |*.-~~~~~~~~~~~~~~~~~~~~~~~     
Wed  5 Oct 94    #   .  I  .       | 3787.34  |~.~-*~~~~~~~~~~~~~~~~~~~~~     
Thu  6 Oct 94       #.  I  .       | 3775.56  | . - *
Fri  7 Oct 94        .# I  .       | 3797.43  | .  -    *
Mon 10 Oct 94        .  &  .       | 3821.32  | . -          *
Tue 11 Oct 94        .  I #.       | 3876.83  | .-                      *
Wed 12 Oct 94        . #I  .       | 3875.15  |-.                       *
Thu 13 Oct 94        .  I #.       | 3889.95  + .                        *
Fri 14 Oct 94        .  &  .       | 3910.47  +~.~~~~~~~~~~~~~~~~~~~~~~~~*
Mon 17 Oct 94        .  &  .       | 3923.93  + .                      *
Tue 18 Oct 94        #  I  .       | 3917.54  |-.                     *
Wed 19 Oct 94        .  I# .       | 3936.04  + .                        *
Thu 20 Oct 94       #.  I  .       | 3911.15  | -                   *
Fri 21 Oct 94      # .  I  .       | 3891.30  | .-              *
Mon 24 Oct 94     #  .  I  .       | 3855.30  | . -      *
Tue 25 Oct 94      # .  I  .       | 3850.59  | . -     *
Wed 26 Oct 94       #.  I  .       | 3848.23  | .  -    *
Thu 27 Oct 94        . #I  .       | 3875.15  | .  -         *
Fri 28 Oct 94        .  I  #       | 3930.66  | .-                      *
Mon 31 Oct 94        . #I  .       | 3908.12  | -                   *
Tue  1 Nov 94     #  .  I  .       | 3863.37  | -          *
Wed  2 Nov 94        #  I  .       | 3837.13  | -    *
Thu  3 Nov 94        .# I  .       | 3845.88  | -      *
Fri  4 Nov 94     #  .  I  .       | 3807.52  |~*~-~~~~~~~~~~~~~~~~~~~~~~     
Mon  7 Nov 94      # .  I  .       | 3808.87  | .  -   *
Tue  8 Nov 94        #  I  .       | 3830.74  | . -        *
Wed  9 Nov 94       #.  I  .       | 3831.75  | . -        *
Thu 10 Nov 94      # .  I  .       | 3821.99  | .  -     *
Fri 11 Nov 94     #  .  I  .       | 3801.47  | .  - *
Mon 14 Nov 94        .# I  .       | 3829.73  | . -        *
Tue 15 Nov 94        #  I  .       | 3826.36  | . -       *
Wed 16 Nov 94       #.  I  .       | 3845.20  | . -           *
Thu 17 Nov 94     #  .  I  .       | 3828.05  | .  -       *
Fri 18 Nov 94     #  .  I  .       | 3815.26  | .  -    *
Mon 21 Nov 94     #  .  I  .       | 3769.51  |*.~~-~~~~~~~~~~~~~~~~~~~~~     
Tue 22 Nov 94   #    .  I  .       | 3677.99 @|~.~~~-~~~~~~~~~~~~~~~~~~~~     
Wed 23 Nov 94      # .  I  .       | 3674.63 @| .    -*
Fri 25 Nov 94        .# I  .       | 3708.27 @| .   -        *
Mon 28 Nov 94       #.  I  .       | 3739.56  | .  -               *
Tue 29 Nov 94        #  I  .       | 3738.55  | .  -               *
Wed 30 Nov 94        #  I  .       | 3739.23  | . -                *
Thu  1 Dec 94    #   .  I  .       | 3700.87  | . -        *
Fri  2 Dec 94        #  I  .       | 3745.62  | . -                 *
Mon  5 Dec 94       #.  I  .       | 3741.92  | . -                *
Tue  6 Dec 94      # .  I  .       | 3745.95  | .  -                *
Wed  7 Dec 94     #  .  I  .       | 3735.52  | .  -              *
Thu  8 Dec 94   #    .  I  .       | 3685.73 @| .   -   *
Fri  9 Dec 94      # .  I  .       | 3691.11 @| .   -    *
Mon 12 Dec 94       #.  I  .       | 3718.37 @| .   -          *
Tue 13 Dec 94       #.  I  .       | 3715.34 @| .   -         *
Wed 14 Dec 94        . #I  .       | 3756.29  | .  -                  *
Thu 15 Dec 94        #  I  .       | 3765.47  | . -                     *
Fri 16 Dec 94        . #I  .       | 3807.19  |~.-~~~~~~~~~~~~~~~~~~~~~~~*
Mon 19 Dec 94       #.  I  .       | 3790.70  | .-               *
Tue 20 Dec 94        #  I  .       | 3767.15  | .-          *
Wed 21 Dec 94        . #|  .       | 3801.80  | .-                 *
Thu 22 Dec 94       #.  |  .       | 3814.92  | .-                    *
Fri 23 Dec 94        .# |  .       | 3833.43  | .-                       *
===============================================================================
{, } = "Timer's Trend" (4% and 10% exponential) SELL ({) or BUY (}) signal
[, ] = 4% exponential change unconfirmed by 10% exponential (not a signal).
@ = market overbought or oversold. I or & (on baseline)=10% exponential SELL.

NEXT ISSUE - will appear about January 26. /Nick Chase

INVESTOR'S AUDIO DIGEST
Those of you who do not have a computer or terminal but want to keep in touch with the "computer warmline" can now do so through this service. It will typically carry the "Stock Market Outlook" from each issue, then replace it with subsequent "computer warmlines" as they are created and posted to the Internet. Market analyses and strategies from other leading newsletters are also available. Phone calls cost $1.95 per minute, and the average call lasts about four minutes. You must be 18 or older to use this service. The phone number for Investor's Audio Digest is:
1-900-443-8790
Disclosure note: The Contrarian's View does not receive any revenue from Investor's Audio Digest.