"This stock market advance may be steep, but it's hardly unprecedented," notes Ralph Acampora, a frequent guest on "Wall Street Week," writing in Prudential Securities' Technical Forecast (1 Seaport Plaza, New York, NY 10292). "It's reminiscent of the 1962-66 market when the Dow nearly doubled. We respectfully disagree with the bears. We're in one of the greatest bull markets in history. In 1962-66, the average group gained 99.8 percent. Today, it's up less than 30 percent. There's quite a bit of room left on the upside."
- Benham Equity Growth Fund, which has appreciated an average 12.8 percent annually over the past three years, uses a computer model that evaluates 2,000 major American stocks based on earnings and valuations. Then its optimization program takes the best-rated of these stocks and creates a portfolio resembling Standard & Poor's 500. Finally, manager Steven Colton does a fact-check that overrides 5 percent to 10 percent of the computer's selections. Recent favorite stocks: G.E., Abbott Labs, Bell Atlantic, Ameritech, Hewlett Packard, SBC Communications, Amoco.- Demand for nursing-home beds continues to increase as the U.S. population ages, observes the Minneapolis-based brokerage firm Piper Jaffray. "In addition, long-term care providers are benefiting from cost-containment pressures and many nursing homes are beginning to offer services typically provided at higher-cost health-care settings." P.J.'s favorite nursing-home stocks: Health Care & Retirement, Mariner Health Group, Manor Care, Integrated Health Services.
- David Dreman of Dreman High Return Fund just completed a study of positive earnings surprises in 1,200 stocks from 1973 to 1990. He found that positive surprises for stocks with low price/earnings ratios produced 14 percent gains in the surprise quarter, vs. 3.1 percent for high-P/E stocks. Here are some low-P/E stocks Dreman believes could have a positive earnings surprise soon: Fleet Financial, Louisiana Pacific, Philips Electronics, Phillips-Van Heusen, V.F. Corp.
- Most investors believe that all U.S. government bond funds are completely exempt from state taxes. That's not the case, notes Kiplinger's Personal Finance Magazine (1729 H St. N.W., Washington, DC 20006). "The key is which government obligations they hold and, in some states, how many. If you live in California, New Jersey or New York and you want to avoid state taxes, you need a fund with at least half its portfolio in U.S. government bonds; in Connecticut the threshold is 80 percent. Only 35 funds deliver tax-free income everywhere."
- South Africa built up large stockpiles of platinum before the current government took power. According to James Riley of Goldman Sachs' J. Aron commodities division, it is this hoard that has restrained price increases. But as the stockpiles recede, investors may again be attracted to platinum, particularly if there are no more significant sales from the Soviet Union.
- The SEC recently set up a toll-free Consumer Information Line for investors' most commonly asked questions. Call 1-800-SEC-0330. In addition, a free brochure explaining mutual funds is available, as well as a computer-accessed bulletin board. The bulletin board number is 1-703-321-8021, or you can access it on the Internet at fedworld.gov.