Word: marketing
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Dates: during 1950-1959
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...stock market's steep climb is beginning to cause more uneasiness than cheer. Last week, just after the market hit a 1958 high of 510.33 on the Dow-Jones industrial average, the Federal Reserve Board joined the ranks of the worriers. Noting that customer credit had increased by $746 million in the first half of the year, it raised margin requirements (i.e., the minimum cash payment required on stock purchases) from 50% to 70%. While the Fed thought its action would act as a damper on speculation, changes in margins have usually had almost no effect on the market...
What has pushed the market up, in the eyes of most Wall Streeters, is not easier credit but the fear of a new burst of inflation. Many a Wall Streeter shares the Fed's worry, feeling that anxiety over inflation has lifted stock prices too quickly on the basis of current earnings. This has caused a sharp change in the "spread"-the difference between stock and bond yields. As stock prices have risen, bonds have dropped (see below); while the return on blue chips has fallen to 3.8%, the best bonds now yield more than 4%. In the past...
...Samuel L. Stedman, partner in Carl M. Loeb, Rhoades & Co.: "When the market moves swiftly, thinking stops. When it slows down, the fundamentals of earnings and dividends will show...
...Daniel L. Gutman, partner in Zuckerman, Smith & Co.: "The market is enormously dangerous at current levels. There is a great deal of ignorant and superficial buying which is using inflation as an excuse. Unless inflation shows up in earnings and dividends, this reasoning is stupid. The market over the next six months will sell materially lower, touching last fall...
...Arthur Jansen, partner in W. E. Burnet & Co.: "The market is too high. At these levels it would take a couple of years for the improvement in earnings to catch up with market prices. If someone came to me with money to invest, I'd advise putting part of it in the bank...