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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (338135)	1/5/2003 5:57:10 PM
From: calgal	Read Replies (1) \| Respond to of 769670

Investors Hope Jan. Barometer Will Rise Sun Jan 5, 9:07 AM ET URL:http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=74... By Nick Olivari NEW YORK (Reuters) - As January goes, so goes the year. Now, after enduring the worst bear mauling in 60 years, investors are hoping not only that stocks move higher this month but that the trend remains true. Since 1950, the course of the Standard & Poor's 500 index (^SPX - news) for the first month of the year has predicted the annual trend every year but four, according to the Stock Trader's Almanac. And even if pundits put little credence in historical trading patterns, it does give them one more reason for optimism if stocks can rally this month. "The 'January Barometer' has been reasonably accurate and since many stocks are oversold it is conceivable that as sellers dry up, we will get a lift in January, then a lift for the year," said Dan Veru, executive vice president at Palisade Capital Management LLC. which oversees $2.5 billion in assets. The decline in stocks in 2002 was the third straight year of losses, which last occurred in 1939-41. Even just the first five trading days of a new year have historically given a clue to how the market may perform for the remaining 12 months, according to the Almanac. However, a month might not even be necessary to predict the way the year will go. With the exception of those same four examples -- 1966, 1968, 1982, and 2001 -- gains in the first days of the year for the S&P 500 index in the last half century have been a precursor of a whole year advance. And with the S&P 500 rising 3.3 percent on the opening day of the new year on Thursday, investors may have just four more days to get a positive signal on stocks based on previous trading patterns. JANUARY DROP (Story continues after advertisement) ADVERTISEMENT Jeff Hirsch, publisher and managing editor of the Stock Trader's Almanac, points out that the four years where the January Barometer, which includes trading for the entire month, failed, powerful forces were at work. Of those years, 1966 and 1968 were affected by the war in Vietnam and 1982 by the start of the powerful bull market in August. The last -- 2001 -- saw the Federal Reserve (news - web sites)'s two January interest-rate cuts, which buoyed the market for the month, but the broad indexes still fell after the Sept. 11 attacks on the World Trader Center and Pentagon (news - web sites). So, while there is still a year to run, Hirsch is confident that whichever way January goes, the trading pattern will hold for the year. Veru said despite concerns about the economy, corporate profits and war with Iraq, stocks can be expected to rise if only because institutional investors, who have reaped gains from their bond holdings over the past three years, will likely take those gains and rotate into equities. "The bond market has a lot of risk at these levels, which could see some institutions reallocating funds to stocks," said Veru, adding that he likes health-care stocks and has moved to a market weight from an underweight position in technology. MARKET DROP? To be sure, few hope for a drop in January. Januarys in which stocks fall are typically followed by an average drop of 13.3 percent for the year, and, as the Almanac notes, bear markets began or continued when January had a loss. But at least one money manager said he would be more or less unfazed by any stock moves in January, no matter what has happened in the past. "I am generally cognizant of these things, but I don't make my investment decisions on them," said Chuck Okre, a portfolio manager with Okre Capital Management, which oversees $160 million in small- and mid-cap stocks from Middleburg, Virginia. Rather, Okre focuses on buying stocks with a business model that returns 20 percent on equity and "management that has always acted in the best interests of all shareholders." His picks for 2003 include slot machine and casino business Penn National Gaming Inc. (NasdaqNM:PENN - news) and insurance company Markel Corp. (NYSE:MKL - news).