Some Experts (and Non-Experts) Predict Stocks’ Action for 1988
In late 1987, the Dow Jones Industrial Average became as closely watched by many Americans as football scores, holiday sales and bathroom scales. The Dow average, an index of the stock prices of 30 large industrial companies, had climbed to a record high close of 2,722.42 during the summer before beginning a gradual decline that culminated in an unprecedented 508-point plunge Oct. 19. The venerable index, created at the turn of the century by Charles Dow, fell as low as 1,738.74 in reaction to Black Monday but recovered to 1,938.83 by Dec. 31, 42.88 points above its 1986 close of 1,895.95. While forecasting the future of an increasingly volatile market is no easy task, 10 expert and not-so-expert stock watchers ventured these predictions on the Dow’s 1988 high, low and year-end close:
RUSSELL DIEHL
President, Diehl & Co. (investment banking firm), Newport Beach.
High: 2,145
Low: 1,633
Close: 2,100
“The first part of the year will be strong, then it will fall hard from spring and recover after the election.”
JEFF KILPATRICK
President, Newport Securities, Costa Mesa.
High: 2,500
Low: 1,750
Close: 2,500
“For the next three months, stocks are going to be higher again. Then they’ll fall, and at election time they’ll go back up. I think you need to look to the longer-term trend to the year 2000. And that trend is higher.”
MICHAEL METZGAR
President, Pinseeker Golf, Santa Ana.
High: 2,500
Low: 1,800
Close: 2,500
“If the Republicans win, it will be up; if the Democrats win, it will be down.”
DAN SULLIVAN
Editor, the Chartist (stock market newsletter), Seal Beach.
High: 2,500
Low: 1,450
Close: 1,600
“I feel we’re in a bear market. If it were behind us, it would be the shortest bear market on record. It’s not going to be the shortest on record. The market was overvalued before, and it still is.”
BOB RICHARDS
President, Pacific Auto Accessories, Huntington Beach.
High: 2,500
Low:: 1,800
Close: 2,400
“There are still an awful lot of good buys out there. It will probably peak at the election, then settle in after that.”
JAMES REYNOLDS
Research director, Cruttenden & Co. (investment banking firm), Newport Beach.
High: 2,700
Low: 1,850
Close: 2,400
“I think it’s going to be very whippy--very, very, volatile. But Oct. 19 was a fluke, and the market will have strength.”
WAYNE ARMSTRONG
President, Del Taco, Costa Mesa.
High: 2,100
Low: 1,850
Close: 2,000
“It’s an election year. During election years, I think that the incumbent party does all that it can to promote its image, and I think the opposition party does all it can to show the good things it will do once it’s in power. When you have a Republican president and a Democratic Congress, you have the makings for that kind of a scenario.”
BRIAN CALLAHAN
Account executive, Prudential-Bache Securities, Anaheim.
High: 2,330
Low: 1,670
Close: 1,825
“The market might be off in 1988. But it will feel like we had a good year.”
ROBERT L. CITRON
Orange County treasurer-tax collector.
High: 2,100-2,200
Low: 900
Close: 1,000-1,100
“I think June will be the swan song for the stock market. During the summer, bad news or adverse news will start coming out. People will then look back and say Jan. 1 was the official end of the bull market. I think that we will have started a recession by no later than October. . . . We will have major corporate bankruptcies in 1988. . . . I don’t look for 1988 to be a wonderful year.”
BOB McDONOUGH
Chairman, Remedy Temporary Services, San Juan Capistrano.
High: 2,150Low: 1,600
Close: 2,075
“I feel good about the New Year.”
