SUCCESSFUL INVESTING
The Bell Heard
Round The World
by Andrew Leckey
The
opening bell on the New York Stock Exchange never sounded so
good.
When the green button
that activates that bell was pushed by firefighters, police and
rescue workers, it was a major step in repairing the damaged
psyche of the U.S. financial markets in the wake of the worst
terrorist attack in U.S. history.
Of course, market averages
quickly headed downward, as they always do amid swirling uncertainty
when investors are deeply concerned about their money. As expected,
airlines, insurance, entertainment, lodging and cyclical stocks
were pummeled.
But that's not what
really matters. What does matter is that the markets are functioning
again interrupted, but not stopped.
Average Americans must
try to invest as they would have before the horrific events of
Sept. 11, their moves based on neither fear nor patriotism. The
system works best when we keep longterm goals in mind with a
diversified portfolio that will still make sense a year or five
years from now.
This will be a time
of great emotion and downward pressure on the market, with daily
events often causing dire concerns, but the market and all of
us will weather it.
In the Persian Gulf
crisis of late 1990 and early 1991, the Dow Jones industrial
average declined 4 percent in the three weeks between the issue
of the U.S. ultimatum to Iraq to get out of Kuwait and the outbreak
of hostilities. Like now, all of that was occurring during a
period with an already weak economy and stock market. But stocks
began a strong sustained rally the day after bombs first fell
and allied forces moved into Kuwait and Iraq. The reason was
that, for better or worse, the uncertainty had been erased.
A lot of effort is
being made to help the market and economy succeed. Federal Reserve
Chairman Alan Greenspan cut interest rates by half-point Monday,
trying to keep the U.S. economy from falling into recession.
This was followed by half-point reductions by the European Central
Bank and the Bank of Canada, who want to avert world recession.
Billionaire investor
Warren Buffett and retired General Electric chairman Jack Welch
have done their bit, proclaiming that they'd be holding onto
their stocks, not selling.
"As Americans
dealing with this horrific tragedy begin to think coolly, they'll
realize the longterm outlook for our economy and corporate earnings
is still very positive," said Alfred Goldman, chief market
strategist with A.G. Edwards. "But while I see this market
as a buying opportunity, only buy stocks you already liked."
And to think that when
I walked through New York's financial district on the evening
of the Oct. 19, 1987, stock market crash, I had been positive
that it was a day that would go down in history as the worst
and most demanding ever for the markets. Now that almost seems
naive. The economic revival that some had expected before year's
end has been postponed. However, an oil-market meltdown is unlikely
so long as we are able to maintain positive relations with crucial
ally Saudi Arabia. Meanwhile, oil, surveillance, defense and
trucking stocks will be among those that do well during this
period. The combined efforts of President Bush, the Congress,
the Fed, U.S. investors and foreign markets will combine to reawaken
the bull market at some point.
I'd like to take this re-start of the financial markets as a time to thank some fine people who helped make this column credible over the years.
They include David Alger, president of the growth-fund company Fred Alger Management, who always offered great quotes about the twists and turns of the market. Along with 37 other employees of the company who worked in the World Trade Center, he remains missing. Also unaccounted for is William Meehan, the well-spoken chief market analyst at Cantor Fitzgerald, the large bond firm that lost more than 600 people in the attack. They and a number of others I've quoted over the years will no longer be around to provide clarity and information in the future. They'll be missed as both sources and people.
I remember my first visit to the World Trade Center as a young reporter years ago. I was taken to its observation deck by my former college classmate Teresa Carpenter, who later received a Pulitzer Prize as a Village Voice writer. On a windy but sunny afternoon, she gave a detailed explanation of each landmark in the city down below. I later conducted many interviews in the center.
My last visit the World Trade Center's Windows on the World and adjoining lounge was May 1, following the Society of American Business Editors and Writers convention. On a clear night, I looked out various sides of the building at lights, buildings, bridges and water, commenting that "I don't know when I'll get back and I want to be sure to remember."
Sure to remember? Now I can't get those views out of my head. But the ringing of the NYSE bell means it's time for all of us to move ahead.
