Word: steins
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Dates: during 1970-1979
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...common stock. In the 1960s, companies were able to get most of their financing through retained profits, bond issues or bank loans, which were fairly cheap and easy to obtain. Executives were reluctant to float stock because it would dilute their earnings per share. "And in those days," says Stein, "earnings per share were a sacrosanct criterion of executive skill...
Prosperity and rising profits then inspired a strong demand for stocks, but the supply was limited. Prices went through the roof. "The enormous rise," insists Stein, "had less to do with a sober assessment of a company's performance than with the sheer shortage of stock. People were not buying companies; they were buying the market." That situation is not likely to recur, because today's profits are modest, corporate debt is high and interest rates are steep. The switch away from debt issues and into equity issues has already begun. Last year U.S. companies put out a record dollar...
...investors will have to choose stocks more carefully than in the recent past. Very few thinly held stocks of small companies are likely to double and quadruple in a short span of time, as many did just two or three years ago. "When you look at the charts," says Stein, "you can tell right away that the buoyant stocks today are those of companies with really sound records and sound prospects. This means that the market is building a solid, sensible base. That's healthy. It would be too bad to see another boom built...
...Stein likes to keep close watch on social problems and political currents in order to sense more keenly how they may affect movements in the market. "In the late 1960s," he says, "we had a market that rose to a peak because it was built on speculation and hope. Then came the big decline, and millions of people got hurt. Today there is a return to conservatism in America. A majority of people cherish the forms of this society, but are fearful that they will be destroyed. Today they see nothing to make them hope. We are still...
...major mover in the securities markets, Howard Stein is deeply concerned by Wall Street's difficulties. He has brought together, and acts as quarterback for, a group of seven leading moneymen, who travel from many parts of the U.S. to meet regularly, usually at Dreyfus' Manhattan headquarters, to discuss inflation and the economy, the problems of the brokerage business and the future structure of the exchanges. Among the men who attend the four-hour sessions are Thomas Reeves of Investors Diversified Services, Wellington Fund's John Bogle, Mellon Bank's Lloyd Pederson, InterCapital's Fred Stein (no kin), and Kidder...