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<v Speaker>From the Maryland Center for Public Broadcasting. <v Speaker>[bell chimes] [instrumentals] <v Speaker>Wall Street Week from the Pacific Stock Exchange. <v Speaker>Los Angeles, California. <v Speaker>Produced Friday, February sixth. <v Speaker>Your host for Wall Street week is Louis Rukeyser. <v Speaker>Our panelists are Frank Cappiello, Robert Nurock and Carter
<v Speaker>Randall. Tonight's special guest is Claude Rosenberg, <v Speaker>senior partner, Rosenberg Capital Management. <v Louis Rukeyser>Good evening. I'm Louis Rukeyser. <v Louis Rukeyser>This is Wall Street Week. Welcome back. <v Louis Rukeyser>Tonight, we have wandered far from our usual habitat as by now should be obvious <v Louis Rukeyser>to all but the most myopic of our viewers. <v Louis Rukeyser>This is not our customary stomping ground. <v Louis Rukeyser>It is the Los Angeles floor of the Pacific Stock Exchange. <v Louis Rukeyser>For one night, only Wall Street week has gone west. <v Louis Rukeyser>Not we trust in the financial slang sense of the phrase, namely going broke. <v Louis Rukeyser>But in the purely geographical sense, first associated with Horace Greeley. <v Louis Rukeyser>We are here to see how the nation's economy looks from the other side. <v Louis Rukeyser>To give you a look on film at the nature of the financial action in both San Francisco <v Louis Rukeyser>and Los Angeles to talk with one of the most most astute investment <v Louis Rukeyser>counselors. And perhaps most of all, we are here as part of our continuing
<v Louis Rukeyser>effort to show that Wall Street and our definition involves everything and everywhere <v Louis Rukeyser>that might affect you and your money and is thus considerably more than just a street <v Louis Rukeyser>address in downtown Manhattan. <v Louis Rukeyser>I wish I could tell you, though, that the financial news of the week was rosier when <v Louis Rukeyser>viewed from the West Coast than from the East. <v Louis Rukeyser>But alas, even the most chauvinistic of Californians could not make that claim. <v Louis Rukeyser>Look at it from either side or even do a backflip and stand on your head. <v Louis Rukeyser>This is still the market's worst week since its historic super rally began <v Louis Rukeyser>two months ago. The same wiseguys who completely missed <v Louis Rukeyser>the upsurge in the first place were still around this week to explain <v Louis Rukeyser>with a confidence undaunted by repeated failure. <v Louis Rukeyser>Precisely why the market was now backing off a bit. <v Louis Rukeyser>The chief villain of the conventional analysis was Arthur Burns, who, upon <v Louis Rukeyser>taking the job of chairman of the Federal Reserve Board, thereby in effect volunteered
<v Louis Rukeyser>for the role of every analyst's favorite pincushion to <v Louis Rukeyser>Burns's unforgivable sin of the week. <v Louis Rukeyser>According to this version was to announce that the Federal Reserve Board had, for <v Louis Rukeyser>technical reasons, slightly lowered one of its money growth targets <v Louis Rukeyser>for 1976. <v Louis Rukeyser>To hear some commentators tell it, Dr. Burns had thus instantly qualified <v Louis Rukeyser>as the Benedict Arnold of the bicentennial. <v Louis Rukeyser>Interest rates would now soar out of sight, but still faltering economy would dove <v Louis Rukeyser>into depression and the stock market would finally prove the pessimists <v Louis Rukeyser>right. It was, as they say, over on the Sunset Strip, <v Louis Rukeyser>heavy man, heavy, especially when you consider that the market, Neal, merely declined <v Louis Rukeyser>20 points after gaining nearly 160 points in the previous eight <v Louis Rukeyser>weeks. Since no market in the course of human history has ever moved <v Louis Rukeyser>straight in either direction, the more practical question was this is <v Louis Rukeyser>this what the technicians call a normal correction, meaning that
<v Louis Rukeyser>the market now must take a couple of steps backward before it can resume its sprint <v Louis Rukeyser>forward? Or has the market once again been stopped by an invisible <v Louis Rukeyser>barrier around 980 on the Dow Jones Industrial Average, a <v Louis Rukeyser>level where it has banged its head several times, most recently in the fall of 1973. <v Louis Rukeyser>Fortunately, we have brought with us three of our wisest panelists who among them <v Louis Rukeyser>have all the answers, especially when they disagree. <v Louis Rukeyser>We had hoped to have, as our special guest tonight, the father of modern securities <v Louis Rukeyser>analysis, Benjamin Graham. <v Louis Rukeyser>But we regret to have to tell you that Mr. Graham was hospitalized this week for <v Louis Rukeyser>influenza and unfortunately cannot be with us while wishing Mr. Graham <v Louis Rukeyser>a recovery as rapid as the market staged last month. <v Louis Rukeyser>We are happy to have available in his stead. <v Louis Rukeyser>Claude Rosenberg, who was originally scheduled as a West Coast guest panelist <v Louis Rukeyser>tonight and has now been promoted to guest guest. <v Louis Rukeyser>Mr. Rosenberg is always worth hearing.
<v Louis Rukeyser>But first, let's examine the running of the bulls and the bears from one end of the <v Louis Rukeyser>country to the other. In the week just past, the Dow Jones Industrial Average <v Louis Rukeyser>managed to head a new recovery high on Wednesday at just under nine hundred seventy seven <v Louis Rukeyser>before giving it all back and more on Thursday and Friday. <v Louis Rukeyser>The week's net loss of just over 20 points left the Dow at nine hundred fifty <v Louis Rukeyser>four point nine zero. <v Louis Rukeyser>The loss was relatively smaller for all stocks on the New York Stock Exchange, while the <v Louis Rukeyser>American Exchange and over-the-counter composite index is actually gained. <v Louis Rukeyser>There is joy of assort in L. FIL, where the compilers of our technical <v Louis Rukeyser>market index gave a cell signal last week just before the market broke <v Louis Rukeyser>and are now confirming it. <v Louis Rukeyser>On February 2nd, I understand the chief elf saw his shadow. <v Louis Rukeyser>One piece of good news today was the government's announcement that unemployment fell <v Louis Rukeyser>half a percentage point to seven point eight percent, its biggest monthly <v Louis Rukeyser>drop in 15 years and the lowest it has been since 1974.
<v Louis Rukeyser>Unlike those indicators, such as the stock market, the tend to lead general economic <v Louis Rukeyser>events. The unemployment rate tends to follow while it's still far too <v Louis Rukeyser>high for comfort. More than seven million Americans are listed as jobless. <v Louis Rukeyser>Still, the decline should confirm for all but the most skeptical <v Louis Rukeyser>that recession at least, is behind us. <v Louis Rukeyser>Carter Randall, can the same be said for the stock market rally? <v Carter Randall>No, I think we're still in a bull market phase. <v Carter Randall>I think it does depend on a lot of things and the level of interest rates. <v Carter Randall>Well, markets that compete for investors money, the bond market this <v Carter Randall>week we had a very interesting happening and that was an issue of <v Carter Randall>U.S. Treasury obligations which were way oversubscribed. <v Carter Randall>It shows there is a lot of money available at a good rate. <v Louis Rukeyser>Well, many people, including yourself, forecast originally <v Louis Rukeyser>that short term interest rates wouldn't get much lower than they've already got. <v Louis Rukeyser>Do you think we're at bottom in that the trend should be up?
<v Carter Randall>Well, I think on short term interest rates, we're pretty close to the bottom. <v Carter Randall>But as the long term interest rates that compete for the investor's money, particularly <v Carter Randall>the big investor, the pension fund, the insurance company and so on. <v Louis Rukeyser>And what do you think's happening to them? <v Carter Randall>I think they still have money to invest, and I think they invested in whatever they think <v Carter Randall>will give them a good return. And both the stock and the bond market right now look very <v Carter Randall>attractive. Longer term than just a week or two. <v Louis Rukeyser>Frank Cappiello, you agree with that? You look longer term and just a week or two? <v Frank Cappiello>Oh, I hope so. <v Louis Rukeyser>Yeah, tell us if you like to. What's going to happen Monday morning? <v Frank Cappiello>Right well, who knows? <v Frank Cappiello>I think the course of the market is up. <v Frank Cappiello>I don't think we've ended this bull market. <v Frank Cappiello>We're going through a corrective phase, as everyone has indicated. <v Frank Cappiello>And a little surprised to see people selling stocks this week on a basis that Arthur <v Frank Cappiello>Burns is going to tighten up a small amount of money supply because frankly, <v Frank Cappiello>as Carter mentioned, short term rates have really gone down a lot further than we <v Frank Cappiello>thought. <v Louis Rukeyser>Well, Frank, how about the possibility this was just an excuse.
<v Frank Cappiello>Oh sure. <v Louis Rukeyser>That a market was going up 160 points is an excuse to sell a little bit. <v Frank Cappiello>Yeah, you need a rest. And now the technicians are telling us we'll ledge in, as they <v Frank Cappiello>say, at the nine one eight, nine, 10, nine. <v Louis Rukeyser>I don't know what that means is that like jumping out of the 18th floor window? <v Frank Cappiello>I hope not. No. <v Louis Rukeyser>What's ledging in? <v Frank Cappiello>Ledging in means your base down to nine-ten nine-twenty and then from there mount <v Frank Cappiello>the assault if we can use the terminology through the thousand area. <v Louis Rukeyser>Frank, let's assume for the moment that this is right. <v Louis Rukeyser>People are hearing two things now. They're hearing either: this is the end or else what <v Louis Rukeyser>you've just said. We're going to back off of that. <v Frank Cappiello>Right. <v Louis Rukeyser>Under those circumstances, why should anyone buy? <v Frank Cappiello>Well, you should buy simply because of the dynamics that are facing the economy. <v Frank Cappiello>One, the Dow Jones Composite Index, the 30 industrial stocks <v Frank Cappiello>will probably earn one hundred two dollars a share. <v Frank Cappiello>Nineteen seventy six. <v Frank Cappiello>Put the multiple on that you wish. Ten to twelve times earnings that get you through <v Frank Cappiello>the old high, probably into the eleven hundred Ariela Dow. <v Frank Cappiello>That's plenty of room for someone buying a Dow, Monsanto and Eastman Kodak,
<v Frank Cappiello>a utility. You've got another 20 or 30 percent right now and 77 <v Frank Cappiello>might well be a good year. <v Frank Cappiello>Right now, the first quarter, 77 looks like a good economy. <v Frank Cappiello>So. <v Louis Rukeyser>Bob Nurock, you're in your element. <v Louis Rukeyser>Your elves gave their buy signal in December of 74 within a week <v Louis Rukeyser>of the low. They gave a cell signal last week at what may have been <v Louis Rukeyser>the high. We went to point higher this week, but we won't quibble. <v Louis Rukeyser>This week, they're saying sell more mildly than last week. <v Louis Rukeyser>Do you back up the elves this week? <v Robert Nurock>Yes, I do. I think the market ultimately will go lower, but I am very bullish long term. <v Robert Nurock>I still think there was a little bit too premature to judge exactly how far we'll go down <v Robert Nurock>first before we resume the uptrend. <v Louis Rukeyser>But if anyone were a devout follower of the elves and possibly such lunatics exist <v Louis Rukeyser>in our country, why should they not instantly respond to a signal as clear <v Louis Rukeyser>as this one? <v Robert Nurock>I think that they should and I think they should create liquidity as suggested. <v Robert Nurock>I would generate 50 percent cash reserves. <v Louis Rukeyser>You did that last week.
<v Robert Nurock>I know. That's exactly right. <v Louis Rukeyser>Create liquidity brings all kinds of images to mind. <v Louis Rukeyser>You're talking about selling stocks, aren't you? <v Robert Nurock>That's exactly right. <v Louis Rukeyser>And you said you would sell half your stocks. That was your advice so a week ago. <v Robert Nurock>Right. <v Louis Rukeyser>And you're saying now. <v Robert Nurock>Right. And when the market moved up to a nominal new high on Wednesday, there were more <v Robert Nurock>new highs than there were last week. There is still momentum to the market. <v Robert Nurock>But I think that at this point, I would be a seller of securities and set objective <v Robert Nurock>slightly higher than the trading now. <v Louis Rukeyser>The problem is knowing we'd have to sell, I suppose. <v Robert Nurock>Well, you sell losers or winners, whichever closest to objectives. <v Louis Rukeyser>Well, this is the point in the program and we normally answer questions from our viewers. <v Louis Rukeyser>But we're going to omit that segment tonight in order to bring you a special film report <v Louis Rukeyser>on the Pacific Stock Exchange. <v Louis Rukeyser>Next week, though, we'll be back at our usual stand to see whether these fellows knew <v Louis Rukeyser>what they were talking about. So if there's something you'd like to know about the world <v Louis Rukeyser>of stocks and bonds, just send your questions along to us at Wall Street week. <v Louis Rukeyser>Windmill's, Maryland, two one one one seven. <v Louis Rukeyser>That was Fleet Week, Owings Mills, Maryland, two one one one seven.
<v Louis Rukeyser>And now please fasten your seatbelts. <v Louis Rukeyser>Ladies and gentlemen, for a trip to the twin locations of the Pacific Stock Exchange, <v Louis Rukeyser>the western most financial capitals of the Western world. <v Speaker>It was gold that first riveted the nation's attention on San Francisco and the Golden <v Speaker>Gate Bridge is still an apt symbol for a city that has grown to become an authentic <v Speaker>financial center. The Bank of America based here, is the world's largest. <v Speaker>It's lofty facade, so imposing. <v Speaker>It was used as the model for the towering inferno dominates a business <v Speaker>district that, like New York's Wall Street, is known by the name of one of its <v Speaker>arteries. Montgomery Street. <v Speaker>San Franciscans started trading gold stocks in this area in 1882, <v Speaker>and the present exchange has been opened since 1929. <v Speaker>Since 1957, when the San Francisco Exchange merged with the old <v Speaker>Los Angeles Exchange, the Pacific Stock Exchange has truly been a tale
<v Speaker>of two cities and two trading floors. <v Speaker>Though stocks are traded in both cities, which means the specialist here in San <v Speaker>Francisco, the man charged with overseeing the trading in a particular stock <v Speaker>and when necessary, buying and selling for his own account has no monopoly <v Speaker>as he would on the New York Stock Exchange. <v Speaker>He has a competing specialist in Los Angeles, and loudspeakers constantly advise <v Speaker>brokers where the better deal exists. <v Speaker>San Francisco traders also keep close watch on the action at the American Stock Exchange. <v Speaker>At the top of this display and in all transactions, including their own <v Speaker>in New York Stock Exchange shares. <v Speaker>Tradition has a different feel in Los Angeles. <v Speaker>And it may be that the chief thing the two cities have in common is their stock exchange. <v Speaker>But that is no small link in the state that has more stockholders than any other. <v Speaker>Like many American cities, Los Angeles is rebuilding its heart, determined perhaps <v Speaker>to end the myth that there is no downtown in L.A..
<v Speaker>It is out in the glossier suburbs, though, that most of the customers are found. <v Speaker>And brokers who used to be in the center city now have their most imposing offices far <v Speaker>away. There's many a Hollywood heartbreak between Beverly Hills and <v Speaker>the shabby downtown. But it was in the city's core that Los Angeles first <v Speaker>got into the stock exchange game in 1889. <v Speaker>It wasn't movies in those days, and unlike San Francisco, it wasn't gold. <v Speaker>Local oil stocks got the Los Angeles Exchange started, and it, too, moved into its <v Speaker>present building in the fateful year of 1929. <v Speaker>Appearances to the contrary. It was not designed by Cecil B. <v Speaker>DeMille, as in San Francisco. <v Speaker>Traders here in Los Angeles thought their activity early at 7:00 a.m. <v Speaker>local time. That matches the 10 a.m. <v Speaker>Eastern Time kickoff up in New York. <v Speaker>But the Pacific Stock Exchange stays open until an hour and a half after the New York <v Speaker>exchanges closed. <v Speaker>Those extra hours are an important advantage for the Pacific Exchange, which normally
<v Speaker>operates on both its floors at a much lazier pace than New York. <v Speaker>For the great majority of the stock's traded on the California exchange. <v Speaker>Seven hundred ninety five out of 132 are also traded on the New <v Speaker>York Stock Exchange. In addition, 230 stocks are duly listed <v Speaker>here. And on the American exchange, only 107 stocks, fewer <v Speaker>than one in 10 are found only on the Pacific Stock Exchange. <v Speaker>But the PSC is convinced that it has found a role. <v Speaker>And last year, it did more business than any other U.S. <v Speaker>regional exchange except the Midwest exchange in Chicago. <v Speaker>The Pacific's gold is now measured in green. <v Louis Rukeyser>And to help you get some insight into the kind of thinking that made the West both gold <v Louis Rukeyser>and green, we're going to be talking now with Claude Rosenberg. <v Louis Rukeyser>Mr. Rosenberg is a pioneer of another kind. <v Louis Rukeyser>Having built while at San Francisco's Jay Barth and Company, the largest research
<v Louis Rukeyser>organization in the West and having headed his own firm since 1970. <v Louis Rukeyser>He's also a prolific writer on investment subjects. <v Louis Rukeyser>Claude, what are the pros and cons of doing your investment thinking 3000 miles <v Louis Rukeyser>from Wall Street? <v Claude Rosenberg>As you know, Lou, the center, the investment center, the United States is definitely New <v Claude Rosenberg>York City. There are more financial analysts, more experts working in New York <v Claude Rosenberg>than anywhere else. But communications being what they are, we still have the advantage <v Claude Rosenberg>of that expertize. <v Claude Rosenberg>I think the advantage of being away from New York and it's whether you're in San <v Claude Rosenberg>Francisco or Connecticut, it makes no difference, is the possible emotional <v Claude Rosenberg>objectivity that you can have being away from it is, you know, New York is subject <v Claude Rosenberg>and time to time to frenzies and to succeed in our business, we have <v Claude Rosenberg>to be contrary. We have to be objective. <v Claude Rosenberg>And sometimes it's simply easier to to have that when you are geographically detached. <v Louis Rukeyser>Well, you were quoted by Barron's last year as saying we don't get involved in the sort <v Louis Rukeyser>of group think that goes on in Wall Street.
<v Louis Rukeyser>We're more detached, which makes it easier to be objective. <v Louis Rukeyser>Could you translate that into specific terms? <v Louis Rukeyser>What are you doing today that they're not doing on Wall Street? <v Claude Rosenberg>Well, specifically, we attempt in our firm to <v Claude Rosenberg>to gauge unanimity of opinion and the type of coverage that goes on <v Claude Rosenberg>industry by industry, company by company. <v Claude Rosenberg>We're not such contrarians that we do everything opposite from anyone else, because some <v Claude Rosenberg>of the things that are going on in Wall Street are very most of them are very well <v Claude Rosenberg>thought out. But we do feel that there is an <v Claude Rosenberg>opportunity, for example, where we see the large institutions, some of the large banks, <v Claude Rosenberg>for example, liquidating some of your fine companies in the consumer areas <v Claude Rosenberg>to take some contrary thoughts and do opposite to what they are doing. <v Louis Rukeyser>In regional terms are there any Western based industries or companies <v Louis Rukeyser>that you follow particularly closely or that have any special advantages and <v Louis Rukeyser>disadvantages? <v Claude Rosenberg>Right now, California particularly
<v Claude Rosenberg>is closer to aerospace and electronics technologies. <v Claude Rosenberg>But I can't say that we specialize in that. <v Claude Rosenberg>We really don't have any one industry that we feel we can do better in than anyone else <v Claude Rosenberg>as as an economic region. <v Louis Rukeyser>Do you think the West will be better or worse than the rest of the country in the next <v Louis Rukeyser>year or two? <v Claude Rosenberg>It should be better. We we don't suffer some of the industrial problems that are suffered <v Claude Rosenberg>in cities such as Detroit, Pittsburgh and the like. <v Claude Rosenberg>And the standard of living, the personal income per capita, et cetera, is <v Claude Rosenberg>very high in San Francisco and California. <v Louis Rukeyser>Looking at the whole national scene, then, what would you tell an investor or a potential <v Louis Rukeyser>investor who is wondering now whether it was too late to start buying stocks? <v Claude Rosenberg>I don't think it's too late to start buying stocks. <v Claude Rosenberg>I think that people lose sight of what they are doing when they buy stocks. <v Claude Rosenberg>Basically, you're buying businesses and you are buying businesses in this country. <v Claude Rosenberg>And if you believe in the viability of this country and the growth of this country, which <v Claude Rosenberg>I do, at least short term, I don't know what's going to happen very long term. <v Claude Rosenberg>Used to be in our business. We were very concerned about the long term and not so
<v Claude Rosenberg>sanguine about the short term. It seems to be the opposite now, but there are plenty of <v Claude Rosenberg>opportunities. After all, most stocks are selling below where they sold in <v Claude Rosenberg>1965, and yet the earnings of most of those companies are considerably above <v Claude Rosenberg>what they were at that time. <v Louis Rukeyser>Well, you handle money for pension profit sharing plans. <v Louis Rukeyser>You have. Last time I saw it counted publicly, 40 clients with something in excess <v Louis Rukeyser>of a third of a billion dollars. You've got a lot of expertize for these people what <v Louis Rukeyser>chance as an individual investor habitats to value. <v Claude Rosenberg>I think he has an excellent chance against any institutional investor. <v Claude Rosenberg>He has one advantage in that he has no size restriction whatsoever. <v Claude Rosenberg>All of us in our business of managing pension and profit sharing monies. <v Claude Rosenberg>Anyone who manages over 10 or 20 million dollars really has some size <v Claude Rosenberg>restrictions and the individual does not have that. <v Claude Rosenberg>And I think that's that's an advantage which he has. <v Louis Rukeyser>I'm confused by one thing in your writings, and that's that's a very good record for you. <v Louis Rukeyser>I'm usually more confused than that.
<v Louis Rukeyser>You have suggested, as you just told us, that people should think of themselves <v Louis Rukeyser>as buying a part of a company, being a part owner, and that suggests a certain amount of <v Louis Rukeyser>patience and fortitude. On the other hand, you've said that people have to be more mobile <v Louis Rukeyser>when they used to be. How do you mesh those two ideas? <v Claude Rosenberg>Well, it is hard to find a happy medium, I suppose. <v Claude Rosenberg>The best advice I could give would be to more or less differentiate <v Claude Rosenberg>the type of stock that you are buying. <v Claude Rosenberg>There are certain types of securities which are not sensitive <v Claude Rosenberg>to business cycles and I think which therefore might be held for longer periods of time <v Claude Rosenberg>as opposed to those which you have to label as cyclical, which in. <v Claude Rosenberg>This is a way of saying to yourself, I must sell that security at sometime in the fairly <v Claude Rosenberg>near future. So I suppose it's a separation element as much as anything else. <v Louis Rukeyser>Suppose somebody out there has a few thousand dollars wonders whether to put it in the <v Louis Rukeyser>stock market. Where would you tell me to put it? <v Claude Rosenberg>I think on the cyclical side of the paper, stocks look as well <v Claude Rosenberg>positioned as any. They've come through the recession very well. <v Claude Rosenberg>Extremely. Much better disciplined than they were before your
<v Claude Rosenberg>major companies in that industry or international and union camp or a <v Claude Rosenberg>Georgia-Pacific consumer companies which are now, as I mentioned before, under some <v Claude Rosenberg>institutional selling will probably will be for the rest of the year. <v Claude Rosenberg>The Procter & Gamble Standard Brands, Coronation seven up, that type of thing. <v Claude Rosenberg>I think those iron ore through Cleveland Cliffs and others would make a good start <v Claude Rosenberg>for someone, I think. <v Louis Rukeyser>Now, you've mentioned a lot of cyclical stocks, the kind you said you have to be pretty <v Louis Rukeyser>nimble with. How does that investor know when to sell those stocks? <v Claude Rosenberg>Well, no one rings the bell, as you know, to to announce that that particular <v Claude Rosenberg>cycle is over. And suppo I suppose the best advice is for someone, <v Claude Rosenberg>number one, to keep track of the fundamentals and at least make some attempt to determine <v Claude Rosenberg>how cheap that security is. Is it 10 times earnings? <v Claude Rosenberg>Is it 15 times earnings? <v Claude Rosenberg>And on a cyclical security, I think he would be best off to perhaps <v Claude Rosenberg>sell half of his holding it when he's made 50 or a hundred percent on his money and <v Claude Rosenberg>then try to let the less the rest go for some period of time.
<v Louis Rukeyser>A lot of people are yearning for that experience, but a lot of times they had it clawed. <v Louis Rukeyser>East is east and west is west. But I'm going to be cleft in twain if I don't let our <v Louis Rukeyser>panelists have a go at you. <v Claude Rosenberg>Right. <v Louis Rukeyser>We're going to start with the repository of the wisdom of the East, Mr. Carter Randall. <v Carter Randall>Repository, I hope. Claude, we're <v Carter Randall>in a market place physically and we've been talking about whether to buy <v Carter Randall>or sell stocks. But I know you're a great exponent, that people should <v Carter Randall>take some look at what they're trying to accomplish with their investments. <v Carter Randall>And I wonder if you would expand on that just a little bit. <v Claude Rosenberg>Right. I think one of the problems of investors generally <v Claude Rosenberg>is that they don't set objectives and that they don't understand their own personalities. <v Claude Rosenberg>They don't understand perhaps their own. <v Claude Rosenberg>You might call it tolerance of pain for them. <v Claude Rosenberg>But for the most part and for most people, I would say that whether they like <v Claude Rosenberg>it or not, they they should be attempting to achieve. <v Claude Rosenberg>I would call peace of mind more than anything else, because money can do a lot of things.
<v Claude Rosenberg>But I think perhaps the best thing that it can do other than charitable means, etc., <v Claude Rosenberg>would be to give a person peace of mind. <v Claude Rosenberg>Most people start off with a hope of getting peace of mind, but then some where along <v Claude Rosenberg>the line they get involved in the other elements of investing, which are greed and fear. <v Claude Rosenberg>And there should be a happy medium there. <v Claude Rosenberg>And they should keep coming back to reality and understanding that they are not they <v Claude Rosenberg>shouldn't attempt to achieve too much too fast, and that if they start early enough, <v Claude Rosenberg>they can achieve an awful lot without being too heroic. <v Frank Cappiello>Well, you came up as a research director and you were also known <v Frank Cappiello>as I used to know you was a great stock picker. <v Frank Cappiello>Can you give our listeners and viewers some insight as to how <v Frank Cappiello>you develop a rationale for owning a stock? <v Frank Cappiello>What characteristics do you look for in a stock? <v Claude Rosenberg>Frank, I'm I would start with an industry position of some sort. <v Claude Rosenberg>I feel that the industry is more or less the equivalent of the foundation <v Claude Rosenberg>to the homebuilder.
<v Claude Rosenberg>And if you're not in a good industry where chances are your investment isn't going. <v Claude Rosenberg>Going to be very successful. So I tried to analyze an industry <v Claude Rosenberg>and ask a few fairly simple questions, many more after that. <v Claude Rosenberg>But really simple, like, is it mature or is it growing? <v Claude Rosenberg>Obviously, we all want to invest in industries which are growing, which have a demand <v Claude Rosenberg>pattern, which is expanding rather than contracting. <v Claude Rosenberg>I want industries that are not easy to enter by others. <v Claude Rosenberg>I also want industries where there is some control <v Claude Rosenberg>over the price of their product in some way. In other words, where the history of the <v Claude Rosenberg>industry has not been one of constantly cutting price cutting price and thinking <v Claude Rosenberg>of volume rather than profit. <v Claude Rosenberg>And then once you've established that position and also I want industries where <v Claude Rosenberg>were the participants can have something proprietary, something which is <v Claude Rosenberg>not generic, but proprietary. <v Claude Rosenberg>And then once you have that covered you, you have one base covered and then you can go <v Claude Rosenberg>and determine, well, as the company within an industry, the right one. <v Claude Rosenberg>That's at least the starting point as far as I'm concerned.
<v Robert Nurock>Claude, I know from your writings you suggested investors use timing for both purchase <v Robert Nurock>and sale. How do you factor technical analysis into your use of timing? <v Robert Nurock>Are you using it and how does it help you? <v Claude Rosenberg>Well, timing. [laughter] Yes. <v Claude Rosenberg>Equal time for equal time. Right. <v Claude Rosenberg>The technicians and the fundamentalists have both had their day and there is room for <v Claude Rosenberg>both of us. I think I'm a fundamentalist by nature, but I do not lose sight <v Claude Rosenberg>of the fact that the technical side can tell me something. <v Claude Rosenberg>The problem with the technical side, as far as I'm concerned, is that as a great <v Claude Rosenberg>number of people commence using it, then it is distorted. <v Claude Rosenberg>And instead of the technical analysis showing what it is supposed <v Claude Rosenberg>to show, and that is what the people who really know the fundamentals of that company or <v Claude Rosenberg>industry are doing. It only begins to show you what other technicians are doing. <v Claude Rosenberg>In other words, everyone begins to follow the same chart and it becomes self <v Claude Rosenberg>perpetuating. But it is self-defeating, ultimately. <v Claude Rosenberg>But I do feel that it is important.
<v Claude Rosenberg>You must invest with the idea that you will never be the first to know when things go <v Claude Rosenberg>wrong. It's not as if people are hiding anything from you, but it's simply that you <v Claude Rosenberg>can't cover all the bases. There are so many things to know about a given industry or a <v Claude Rosenberg>given company. You simply can't be first. <v Claude Rosenberg>And sometimes the technical science will give you an indication that something very good <v Claude Rosenberg>or very bad is going on. And then you have to go from there and make sure that the <v Claude Rosenberg>fundamentals either support or refute that technical thought. <v Louis Rukeyser>We only have about half a minute left. <v Louis Rukeyser>You've described yourself as a fundamentalist. <v Louis Rukeyser>Why don't you tell us some of the fundamentals you see in the economic picture of the <v Louis Rukeyser>next year or two? <v Claude Rosenberg>Lower inflation. <v Claude Rosenberg>Very good business. Earning power, as Frank mentioned before, <v Claude Rosenberg>quite a billion, I think, next year and 77. <v Claude Rosenberg>It's very possible we could see earnings in a 100 to 120 dollar area for the Dow. <v Claude Rosenberg>And if inflation behaves itself, lower interest rates, which will give us higher among <v Claude Rosenberg>us. <v Louis Rukeyser>If you'd been a panelist tonight, as you were originally supposed to be, I would have <v Louis Rukeyser>forced you to make the predictions. These fellows make what your Dow forecast for this
<v Louis Rukeyser>year, whereas the high and the low on the Dow Jones Industrial Average. <v Claude Rosenberg>This year I think the low is more like eight <v Claude Rosenberg>fifty and the high is probably ten seventy five. <v Louis Rukeyser>Thanks very much, Glenn Rosenberg, for being with us and for being such an excellent. <v Louis Rukeyser>Yes. Thanks to our panelists. <v Louis Rukeyser>And I hope you'll be back with us next week when we'll be back at home base for a look at <v Louis Rukeyser>how the federal government's activities this year may affect the economy and the stock <v Louis Rukeyser>market. My guest will be Charles Schulz, who was budget director under Lyndon <v Louis Rukeyser>Johnson and has some sharp thoughts on how Johnson's successors have done. <v Louis Rukeyser>We've tried to have some sharp questions for him. <v Louis Rukeyser>Meanwhile, this has been Wall Street week. <v Louis Rukeyser>I'm Louis Rukeyser. Good night from the Golden West.
Wall $treet Week
Episode Number
No. 528
Wall $treet Week Goes West
Producing Organization
Maryland Public Television
Contributing Organization
The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia (Athens, Georgia)
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Series Description
"Wall $treet Week, a television series for the general adult audience, attempts to explain the nation's economy by focusing on the stock market and its relationships to government, business and the average citizen. This weekly series, now in its seventh season, provides information about various methods of investing and personal money management particularly for viewers who may be inexperienced in financial planning. The program analyzes current economic developments, government legislation, and provides a forum for interesting personalities and investment philosophies. "The series host is Louis Rukeyser, financial journalist and author. He is assisted by three panelists, drawn from a rotating panel of 12 leading financial experts. Regular programs consist of the following segments: Opening film and credits (with original theme scored for orchestra and TWX machine); Market in Brief-introductory remarks and commentary on the week's major economic news by Mr. Rukeyser, including animated graphics showing the week's closing market averages and W$W's own technical index; Analysis of Market Activity- review and analysis of business and market activity by three panelist experts; W$W Exchange- write-in questions from viewers answered by the panel; Topic Background-information on the evening's topic supported by charts, graphs, animation and film etc.; Special Guest Interview-host and panelists question the guest on the featured topic for the evening; Preview-closing comments and preview of next week's guest and topic by Mr. Rukeyser. (On certain programs the viewer question of graphic segment is eliminated to allow more time for the special guest, i.e.: Milton Friedman.) "The creator and executive producer of Wall $treet Week is Anne-Truax Darlington; the producer is John H. Davis; directors are Steve McCullough and George Beneman II; research and production assistance by Kate Williams Cox and Susan Roumelis; the on-camera floor director is Natalie Seltz (Miss Smythe). W$W is produced [live on tape] on Friday evenings and is carried nationwide by the Public Broadcasting Service on more than 240 affiliate stations. The series is funded by grants from the SPC (Station Program Cooperative), The Ford Foundation and the Corporation for Public Broadcasting."--1976 Peabody Awards entry form.
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Director: Beneman, George
Director: McCullough, Steve
Executive Producer: Darlington, Anne-Truax
Host: Rukeyser, Louis
Panelist: Nurock, Robert
Panelist: Randall, Carter
Panelist: Rosenberg, Claude
Panelist: Cappiello, Frank
Producer: Davis, John H.
Producing Organization: Maryland Public Television
AAPB Contributor Holdings
The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia
Identifier: cpb-aacip-98368d1ef89 (Filename)
Format: U-matic
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Chicago: “Wall $treet Week; No. 528; Wall $treet Week Goes West,” 1976, The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed June 28, 2022,
MLA: “Wall $treet Week; No. 528; Wall $treet Week Goes West.” 1976. The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. June 28, 2022. <>.
APA: Wall $treet Week; No. 528; Wall $treet Week Goes West. Boston, MA: The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from