Wall Street Week with Louis Rukeyser; 0218; Women on the Street

That was for Public Broadcasting. Longstreet week produce LIVE Friday February 2. Your host for Wall Street Week gives Louis Rukeyser. Our panelists are Frank Cappiello Carter Randall and William waters. Tonight's special guest is many institutional sales and we're done handily. I'm Louis Rukeyser This is Wall Street Week. Welcome back. Tonight we're going to be talking about

two subjects that might conceivably interest you the subject of money and sex. First we're going to be looking at the plight which is not necessarily all bad. The newest category of women on the street. The street in question is of course Wall Street. Now you really knew that all the time didn't you. And we're going to try to find out what a lot of nice girls are doing in a place like that. Second we're going to be talking with an exceptionally attractive young woman who has managed to fight a way through all the male chauvinist pig the Rhea of Wall Street and become one of only about a dozen females who have made it in the high powered world of institutional selling. We're going to be asking many green not only what it's been like to be a woman in Wall Street but also for the benefit of male and female investors alike. What specific stock suggestions she has now given to her clients money as you may have noted has no particular gender. But before we examine the kinds of discrimination both negative and positive that a bright young woman may encounter in trying to scrape up a six figure income from the stock market let's

keep our own skirts clean by giving our weekly report on Wall Street. And as the Dow Jones Industrial Average indicates. This was the week when the stock market staged what it euphemistically calls a correction plunging below the 1000 mark for the first time since mid-November and closing there every day of the week before trading ended on Friday the loss for the week was nearly 23 points and the index of 30 blue chip stocks stood at nine hundred eighty point eighty one. That's the lowest that the market averages been since November 2nd before the election. And it came amid growing investor concern over the state of the dollar at home and abroad domestically. How much it's going to cost in terms of escalating interest rates on the dollar. And abroad how much it's going to be worth in terms of other currencies whose relative value was on the rise. In any event it was enough to send all our averages down. The New York Stock Exchange index of all common stocks listed there lost a point in the quarter to sixty one point seven on

the American exchange index gave up just over a third of a point to twenty five point six though. And the Nasdaq composite index of over-the-counter stocks yielded about three three and a quarter points to finish at one hundred twenty six point forty eight. But take heart. Disappointed prospectors. There is a silver lining after all. But after more than two months of negative readings our Wall Street Week technical market index has moved back to neutral five indicators up five down which could mean the bad news is coming to an end. And that less than euphoric we've caught is the best I can do for you this evening. Now to Randall can you do better and assuring folks that this week was not as disastrous as it looked. I can't do much better than be euphemistic it is a correction Lou. There's no question that the market's been worried about higher interest rates has been worried about the value of the dollar abroad. It certainly should not be worried about corporate earnings and I really don't think that the higher interest rates are anything to worry about

because this was expected. This is a big consumer boom this is economic expansion there is pressure on money but it's not due to a slowdown in business is due to a pickup in business. So I really do look for a turnaround in the stock market reflecting the higher earnings past present and future. So if you held stocks you wouldn't sell and if you didn't you might buy them. I certainly would be in a in a buying mood at this level. Bill what is Would you share that are you a little more cautious at this point. I think I'm a little more cautious. Forgive me Carter. We think that there we originally felt that the market might correct itself 5 to 7 percent. Here today we're at 7 percent. Now we think it could go a little bit lower maybe down to the 950 955 range. But long term I share with Carter I think the long term trend is still up. Bill as you know some of the especially hard hit stocks have been those with high price earnings ratios do you regard that as a development that's liable to continue for a long while or is this just a two week trend.

I don't think it's a long term trend I think that the stocks are going to be most in-demand again on the way up are going to be the quality growth stocks and they're the ones with high multiples. OK Frank Cappiello we've got Carter saying things are about as bad as I've been a big bill water saying they may get a wee bit worse what do you say. I think they may get a wee bit worse but I agree that the market's course is still upward we're still in a bull market phase we're in a corrective phase of that bull market. I must admit that I'd have to set my target as to how long this correction will carry a little bit lower than I originally thought I think the reason for that is the violence with which the selling has taken place across the board and I think this is attributable to expectations that short term interest rates are going to go a lot higher than anyone expects and persist for a reasonable period of time. So you and Carter have both referred as a negative factor of interest rates. There was some talk this week that the prime interest rate banks charge their best customers might get as high as 7 percent this year. Do you think that might happen and B what would it mean to the

stock market a bit. Well I think the market is already anticipating a 7 percent prime and this is one of the reasons why the market sold off in the middle of the week a comment by one of the officers of a large major New York bank said that the prime would not hold its next. I think what people are worried about is the prime persisting. At seven for a considerable period of time this would really be bad because there is a trade off between short term rates and money available for the stock market. And there is a psychological factor here. I mean when the rays get up to a certain level people don't have money for the stock market is right and also to bundle money out of the market because bonds are a substitute for people pull money out of the market. One final comment I think right now many investors are thinking that we have a replay of 1970 the credit crunch. I don't think that's going to occur and if you don't think that then I think some of these growth stocks that have been battered are probably good buys right now. Fair enough. In any event it's time now to move from the big marketplace to the home

kitchen. And answer some of the questions we receive from our viewers. Carter Randall North Miami Florida has observed that the opening price of a stock on any given day is often considerably different from the previous day's closing for the same stock. He's not quite sure why that happens he like an explanation of how that change occurs from the closed to the open and who sets the change. First of all Lou I would disagree with with his original statement that there are often large discrepancies between the opening of one day and the close of the previous day. This really is not true of most stocks open very close to their closing price of the day before. There was always a news event though that might change things. Oh I was going to say the opening price of a stock that depends on the news of the day national international on any news about the company and anything that might drive either buyers or sellers to the market place before it opens would affect the price of course.

I think what confuses people is why if a stock was worth $10 at 3:30 yesterday is it not worth $10 at 10 am today. Something has happened there is some news event that has changed that price overnight. But this is not true of most stocks in most markets. Phil waters as a seasoned broker you should be just the man to help us address Webber of Long Island City New York who writes When you buy a stock you hope it will go up when you sell it short you hope it will go down. You know with himself now here's the part about which I'm sure he rides when I bias the stock I can sell it whenever I choose to hold on to it indefinitely. But is this also true of a stock I've sold short. Can I hold my short position indefinitely waiting for the stock to drop. Or is it possible that I might be forced to cover the short sale that is buy the stock at an inopportune time such as when the price is up and buying back means I lose money. This possibility exists is there some way in which I can protect myself. The first the first thing to think about is that the risk on a short sale is unlimited. If you buy a stock at 20 you're say a hundred shares at 20 and it goes to zero you lost

$2000 if you short a stock at twenty one hundred shares your loss factor could be infinity as the stock goes up. Two other things could happen too. You could run out of money. You must you must borrow to short stuff. And as the stock goes against you your broker is going to be calling you for more and more margin. You may get to the point where you have to liquidate because you can't put up any margin. And lastly. The stock may not be borrowed every time you sell short your broker has to borrow an equivalent amount to deliver to the buyer. And if the stock gets squeezed and it's not bbl you're short maybe cause. I'm so short sell basically as a short term trading vehicle not a long term view and it's not for the cautious long term investor that I have at home. Frank Caprio Don Smucker of Indianapolis says he's been told that the symbol F in the bond table stands for flat not meeting interest payments. He wants to know whether that's accurate and if so why it should appear beside some railroad bonds and not beside others of the same road company.

Right. He's he's correct. F stands for flat bonds. A quick summary of why you know we have bonds trading flat usually a bond that is making regular interest payments and it could be an issue of a company that is making their interest payments. Would be brought as a percentage of par value and in between interest payments it would be bought as a percentage of our value and accrued interest. This is assuming they make the interest payments. But there are also classes of bonds such as income bonds which are contingent interest if the interest is there and it is paid on that particular tier of debt. These bonds will be traded flat. Also bonds that are in default for some reason or other that are not making interest payments would be traded flat too. So that's the answer. Fair enough. Now if you're a railroad bonds have gotten you off the clock. If you have any other questions about the world of stocks and bonds just send your queries steaming along to us at Wall Street Week Owings Mills Maryland 2 1 1 1 7. All aboard now that's Wall Street Week Owings Mills Maryland. 2 1 1 1 7. Now before we

meet tonight's special guest we thought it might be useful to take a look at some of the things successful women themselves have said about what is still overwhelmingly the man's world of Wall Street. The ambitious young woman considering a career in the stock market might take heart in knowing that more than 5000 of her sisters are already registered Representatives. The successful ones it said tend to be at least as career oriented as the men at the next desk. One standard complaint heard by most of the women who get to be securities analysts is that men like to give them what they term sissy stocks to investigate. Industry groups like cosmetics of power Oh and household products that are thought to be more natural for women. However even if she does find it hard to get all the assignments she wants the typical woman in Wall Street may lay claim to some special talents of her own. At least one highly paid female institutional investor is convinced that women are just naturally better shoppers. Whether or not shopping for cereal is the same thing as shopping for

stocks I think few would dispute the conclusion that Wall Street was slow to open its doors to qualified women. With a sample of what they got when they decided to smarten up. Let's go over now and meet tonight's special guest Mamie green. Many welcome. Why are you here. However. When Minnie Green came to Wall Street four years ago at the age of 22 with a junior college degree in some advanced studies in Switzerland she was given a job as a secretary. Before long she was fired when her bosses decided that she was not the secretary type. I didn't know how right they were. This green promptly became a trainee in the same firms program for embryo brokers and he never had to take dictation again. Later she found she had a flair for dealing with big institutional accounts and became a specialist in stocks in the rapidly growing leisure time area. She now works for The New York firm of Edwards and Henley. According to BusinessWeek

magazine she sometimes gets calls through institutional managers She doesn't know by saying Tell him it's memory and it's personal. A call that very few secretaries presumably would dare to block. Now many Doesn't that story suggest that there might be some advantages to being a woman in Wall Street. There definitely is on the whole what do you think are more important advantages or disadvantages. And I would say it's an advantage to be a woman. In what way has it been a drawback if you wanted to do things that would let you do now. Have most of the men that you worked for been helpful or do you think some of the resented you. I think they've all been helpful to you but you're a lucky woman how come that we hear all this complaint from so many other women on Wall Street well women love to complain. Well I won't touch that. That's one of the prerogative of being a woman is to complain but should I assume from what you said that you're not too sympathetic to the women's liberation movement. Well frankly I find them a bore.

People that I have had calls from women flip when I've said in print that I think the movement is tedious and I just think that if a woman wants to exert herself she has the same potential and probably more than most men. Well how about the complaint that we just alluded to that women say they can't get the steel stocks that they can't take the trips they want to take and so rightly I don't know which woman would want to steal stock to begin with. I don't think it's smart to want to feel stuck. Well you're all right let's get to know your specialist and your specials in the leisure time. All right I guess that's not a sissy or you know it's not exactly a steel mill either. Well that's the thing women love is leisure time. Now one of the things that interests me about leisure time was that I felt that more of the public is having more time to spend at home to do things we're going to go to the day I think we're going to have four day workweeks and the disposable income of the country is much higher so I felt where are these people going to be putting their money. And I looking I'm I do all leisure time activities I like to ski I like to sail. And just if you stand on a

ski line today you know what's happening to the skiing industry and this is going throughout the board on all leisure time stacks. So I felt that. Actually where I'd like to put my money is in companies that I think are going to be growing tremendously in the 70s in the 80s. And that's why I picked up on leisure time. Those stocks of course were probably a little bit more in fashion a few months ago and they are today. Here we go this is a. Temporary reversal. It's like fashion in clothes I mean every thing has sort of times where they're in fashion but I think on the long run we're going to see more and more money put into leisure time companies and I think the trend is going to continue. Could you tell us some of the herbs you took we want. Would you like the areas of the stocks I will have the stocks. Well actually I picked up on three stocks. One company is actually the excess of leisure time which is weight. And I think that's a major problem today in this country is weight. Estimates have shown there's about 40 percent of the country that's

overweight she adds up to about 80 million people. So I was looking for a company that sort of met the demands of of what we all need and that is we've tried to look attractive and we tried to be the best and as the head of one company here said on the show he never buys in a company that has an overweight person. So I think the company that's very responsive to the needs is Weight Watchers. Second coming are they reporting fat profits. Well I'd like to have as much money as they're making every single year the company is grown in 1963 they had 600 30000 members today they're up to four and a half million members. And I think the growth rates going to continue keeping in mind there are 80 million overweight people. Second company that I like and there's been few problems because the professionals have been selling lightly is Polaroid and it's just an instinctive thing. More than that I'd like to deal with stocks on a more conceptual basis and after seeing the Polaroid camera fellow walked

into my office and he started to take the Polaroid pictures and 40 people were standing around to watch it. I think the invention is tremendous and I think they're going to sell the camera very well. Let me ask you about that before you go on the one of the negative comments of the mayor that you know is that the new poll will come will be too expensive you don't think that's true. No I don't. People pay for color television. They pay for Porsche. They pay for Mercedes-Benz and I think Polaroid even 180 maybe down to under 50 it's not too expensive. I don't want to stop a lady was giving stock tips so you go right ahead. There's a other company that I like and it's a small special situation. One of my interests was in the gaming area. I think we're going to look to see the legalization of gambling throughout the country. And there is a company that manufactures pinball machine its impending arcades and the name is Bally manufacturing. We got it all right before we got a thousand phone calls. B A L L Y. Manufacturing grown at a rate of about 20 percent and I think the growth rate should continue.

You know I was fascinated by what you the way you've been taking them off and I was going to get to the fact that you had a subspecialty of gambling stocks. Some of us seem to think that all stocks of gambling stocks used to set you up again we would be legalized the United States you mean the scene no gambling. Well I think with the municipalities facing major problems they don't have enough tax revenues I think more and more states are going to try to legalize gambling. I was over in London and that city did legalize gambling and it's brought a tremendous amount of people coming into London that normally used to go to Paris they know granted to London and I think New York is eventually going to legalize. I would see states like California Florida and I think all this in terms of if you're looking at a growth area in this country I don't think that you can overlook gambling. I mean much as it pains me to do so I now have to turn you over to our local contingent from the chauvinist pig pen. I think you'll be safe with quite a Randall. Well I'm going to try to bleat my way out of that one Lou but there is one. If

you don't mind me a non-sequitur or two to one of your favorite stocks which you didn't mention you'd like as I understand it or have liked in the past a Las Vegas casino and hotel company and part of the thesis is that the four day weekend more leisure time but Las Vegas is not really a place for the guy with the extra day in the week. Is it as opposed to sporting and fishing and drinking beer and doing it yourself and so on. Well he can drink beer in Vegas. Well I understand that but this company really is a highly specialized company in a very cyclical business it seems to me. Seems to me everything every company is cyclical. In other words if we're going to have a good economy earnings are going to be strong. There is a bad economy. Earnings tend to be weaker. And I just felt that. There's been a tremendous growth

in Las Vegas 747s are now flying for the first time and they get earnings of the company have been astronomical. There are two I would say about three dollars per share at the end of the year. And I just felt the growth of this company is tremendous and I'd look for. Really when I try to. You know look into companies that are like I want to have. Not be you know concerned with just one area because leisure time takes in the whole facet of everything we like to do. My four day weekend Las Vegas would depend on how long your money lasted I guess. Let me the start of the program with the old cliche What's a nice girl like you doing a business like this. The gals on my sales staff are bugged by this more than anything else that they encounter in their calls. There's 5000 female account executives registered representatives in this country. Can you help them how do you handle little bromide and how do you turn it to your advantage. Well first of all I'm a nice girl. And second of all I work hard. I think anybody who

wants to work hard it's going to do well at anything they're going to do. I mean there are no geniuses I don't believe there's a genius. Excluding a few people perhaps and really you you do as hard as you want to give into something if you work courage you're going to get a good return. And so I just don't buy the story that women can't make it obviously if they're 5000. There are quite a few who've already made it. You've been quoted I think by saying that you don't believe much of what you read and you don't believe much of what you're told you know regarding the stock market or regarding economic information that is out of no I never said that. But I don't believe everything I read and I don't believe everything I hear and I think that makes me perhaps a good salesperson. How do you how do you get get your ideas for example Polaroids a sure shop but how would how did you research. Weight Watchers did you develop this by looking around by reading by talking to people in the industry.

Well if you live in New York all you have to talk to is everybody go out to restaurants and everybody's talking about they'd like to lose weight. And we had a receptionist in our office who came down I think 80 pounds and I didn't believe it could be done and she started talking about Weight Watchers in this for you knew it. Half the people in the office were going to Weight Watchers and I think this is the whole thing about Weight Watchers that it's word of mouth. And I would compare it and there you gentleman might object but to a coming Avon products because Avon did door to door selling. And if you have been heavy and if you've lost weight and you've kept it on I think that you're going to talk about Weight Watchers to everybody you meet but hardly an institutional type stock. I mean do you sell it well that doesn't mean anything could be a good company you know I mean institutional stuff you know when you're in institutional sales. But I'm still allowed to have imagination. OK I think I think I should point out that when Mr. Caprio says a stock is a sure shot that that does not necessarily imply an endorsement from the management.

Oh no no no guarantees on the stock market. I see something wrong with me you spoke of working hard and you kind of sneered at the concept that it mattered whether you're a man or a woman. I think Frank's alluded to the fact that you are an institutional sales person. Whatever whatever you write I think some of us would appreciate an explanation of how institutional salesperson works. Well first of all I started in retail and actually everybody's talked so much about institutions as being such complex and today's most institutions are run by human beings hopefully and they have the same problems actually that the retail person has. In their case their jobs are on the line if they choose too many wrong stocks. Eventually they might not be employed in their company. The same thing with retail if they lose money well that's their own money so that you're dealing with human beings and they want good information. And. I was looking around after I decided to make the move I wanted to be with

a firm that was able to give me good research and I wanted to be with a firm that's aggressive who doesn't cater just to old school tie because obviously I'm not an old school tie type. And at the firm that I'm working with they do have 10 institutional analysts. They do very very extensive work and they also have a retail department so they really understand the two worlds and I think for any institutional salesperson you yourself you can't believe everything but you can only go by the track record of your analysts. How big is the average order you handle. It depends what's the what's the big if you're trying to get me into numbers I'm not going to tell you. Well people people are interested when we talk about an institution of the warders and I've read once you've handled 20000 share what it would that be an unusual order for you know. Would 5000 be an usual order. Well I tell you this I take. Is it varies because depending on the institution you're covering obviously there are very large institutions they can generate more

business. There are others. If you're servicing accounts you're grateful for whatever business they give you whether it be twenty thousand shares or 2000 shares. And we'd like to see 20000 shares obviously but. According to what they can afford to give them what they feel is adequate in what you've done. In the few seconds we have left do you have any special advice for women investors should they perceive any differently from men investors. Yes I think they should read the information they get. I find that too many men just listen to their pals. They listen. They tend to listen to anybody who tells them something good and I think the one thing I've seen about women women are skeptical by nature because we're in a man's world as you said. And I think that women should read the facts that are presented and make their own judgments. And that alone would make them different. Yes. Well I hate to have to stop you there but our time is up. I'd like to thank our guests. Maybe GREENE And our panelists will join us tonight and I hope you'll be with us again next week when

my guests will be Richard C. McKenzie portfolio manager for the Oppenheimer time Fund who says he's convinced that three out of every four securities analysts are incompetence. Let me ask you Mr. Mackenzie what the ordinary investor can do to make sure he gets an alist number four. Meanwhile this has been Wall Street Week. I'm Louis Rukeyser. Good night. If you would like to obtain a written transcript of tonight's program send $1 to Wall Street Week Owings Mills Maryland 2 1 1 1 7. That's $1 to Wall Street Week Owings Mills Maryland. Two one one rung seven. Wells Street Week is produced live in the studios of the Maryland Center for Public

Broadcasting. This program was made possible by a grant from the Corporation for Public Broadcasting.