With Stocks at Least You Have a Chance

Led by the oil and gas group, the stock market in Canada rose 38.4% in 1979, contrasted with the meager 4.2% rise reflected by the US Dow-Jones industrials. One explanation for Canada's impressive year is that the activity was emotional, a natural precursor to a real market crash.Another explanation justifies the market rise as a true reflection of improvement in Canada for the corporate profit outlook. However, at a time when Canada's pension funds had a maximum cash inflow, the funds sold their Canadian stocks, and invested in bonds, mortgages, and American stocks. It is predicted that money accumulated by the pension funds will come into the Canadian stock market in 1980.

Full text: Canadian Business, Mar 1980

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MARKET PERSPECTIVE Inflation and finds aid gold stock prices

While many claim there is no sure way to forecast the market, there are some guidelines that provide genuine assistance in determining what action to take at specified times of the year. These deal with probabilities rather than certainties and have to do with the tendency of the market to act in a particular manner at particular times. The investor can use this bias to his advantage. Stocks normally go up during the summertime and at the end of the year. In Presidential election years, there is a bias toward market strength in March and weakness in April. Various weeks of the months also have a particular bias. The last week in December, January, May, and June tend to show strength, while the middle of January, late March, late April, mid-June, early August, late September, late October, and late November all tend toward weakness. The market has shown a tendency to be strong on the day prior to a major holiday. The day following a holiday has an unfavorable record. Sellers of stock should avoid Monday. Friday is the best day to sell. Buyers should try to buy before the last 3 days of the month.

Full text: Financial World, Sep 15, 1980

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The Effect of Forced Conversions on Common Stock Prices

Repurchasing outstanding common stock can be undertaken to: 1. provide a store of readily issuable shares in satisfaction of corporate stock issuing needs, 2. assist incumbent management in a control battle, 3. help reduce stockholder servicing costs, 4. accommodate an insider or manager desiring to quickly liquidate a holding, 5. provide support for the market price, 6. increase book value per share when the market price is below book value, 7. increase financial leverage, 8. reduce dividend requirements, 9. achieve a partial or full liquidation, 10. distribute cash to individual stockholders on a more favorable after-tax basis than through the payment of dividends, 11. pay extra cash to stockholders without arousing the expectation of a continuance of the distribution, and 12. aid in ''going private''.The kinds of firms that repurchase extensively are the more staid firms in a stable or declining industry which once flourished. The repurchasing of stock is now considered a valid act.

Full text: Journal of Accounting, Auditing & Finance, Spring 1980

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Cash Flow Is Good Benefit

Yesterday, Adam Brydon, the general manager of The Post, said it was ''unlikely'' that his newspaper would bring out a morning newspaper. ''The main thing,'' he said, ''is the cost.'' ''This is an extraordinary undertaking intended to make a great newspaper even greater,'' Mr. [Robert M. Hunt] said. ''It is the strongest possible commitment to our employees, to our readers and advertisers and to our community.'' The statement said that the first edition of the newspaper would go to press at 3:30 P.M. with the latest stock prices ''available at that time'' and that later editions would carry the final stock prices and race results. The final edition of The Post goes to press at 2:30 P.M.

Full text: New York Times, Jun 22, 1980

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Market Place; Out-of-Style Issues Favored

A study was conducted to analyze rates of return on all equity investments of mining shares listed on the Sydney Stock Exchange. The rate of return was equal to the capital gains or losses adjusted for dividends and other changes. No consideration was made for taxation differentials. Monthly data from the period January 1958 to February 1979 were used. The overall index for the mining shares was computed on a value-weighted basis. The results of the study showed that the average return on the mining equity investments during this period was 11.9% annually. Second, the standard deviation of return of mining returns was relatively high. Comparison of this to returns for industrial and commercial portfolios were unfavorable. Third, mining shares exhibited a high degree of correlation with commercial and industrial returns. Fourth, although larger mining corporations tended to have lower standard deviations of return, no clear correlation between size and average return was apparent.

Full text: Australian Journal of Management, Oct 1980

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