Some Experts (and Non-Experts) Predict Stocks’ Action for 1988

In late 1987, the Dow Jones Industrial Average became as closely watched by many Americans as football scores, holiday sales and bathroom scales. The Dow average, an index of the stock prices of 30 large industrial companies, had climbed to a record high close of 2,722.42 during the summer before beginning a gradual decline that culminated in an unprecedented 508-point plunge Oct. 19. The venerable index, created at the turn of the century by Charles Dow, fell as low as 1,738.74 in reaction to Black Monday but recovered to 1,938.83 by Dec. 31, 42.88 points above its 1986 close of 1,895.95. While forecasting the future of an increasingly volatile market is no easy task, 10 expert and not-so-expert stock watchers ventured these predictions on the Dow’s 1988 high, low and year-end close:

RUSSELL DIEHL

President, Diehl & Co. (investment banking firm), Newport Beach.

High: 2,145

Low: 1,633

Close: 2,100

“The first part of the year will be strong, then it will fall hard from spring and recover after the election.”

JEFF KILPATRICK

President, Newport Securities, Costa Mesa.

High: 2,500

Low: 1,750

Close: 2,500

“For the next three months, stocks are going to be higher again. Then they’ll fall, and at election time they’ll go back up. I think you need to look to the longer-term trend to the year 2000. And that trend is higher.”

MICHAEL METZGAR

President, Pinseeker Golf, Santa Ana.

High: 2,500

Low: 1,800

Close: 2,500

“If the Republicans win, it will be up; if the Democrats win, it will be down.”

DAN SULLIVAN

Editor, the Chartist (stock market newsletter), Seal Beach.

High: 2,500

Low: 1,450

Close: 1,600

“I feel we’re in a bear market. If it were behind us, it would be the shortest bear market on record. It’s not going to be the shortest on record. The market was overvalued before, and it still is.”

BOB RICHARDS

President, Pacific Auto Accessories, Huntington Beach.

High: 2,500

Low:: 1,800

Close: 2,400

“There are still an awful lot of good buys out there. It will probably peak at the election, then settle in after that.”

JAMES REYNOLDS

Research director, Cruttenden & Co. (investment banking firm), Newport Beach.

High: 2,700

Low: 1,850

Close: 2,400

“I think it’s going to be very whippy--very, very, volatile. But Oct. 19 was a fluke, and the market will have strength.”

WAYNE ARMSTRONG

President, Del Taco, Costa Mesa.

High: 2,100

Low: 1,850

Close: 2,000

“It’s an election year. During election years, I think that the incumbent party does all that it can to promote its image, and I think the opposition party does all it can to show the good things it will do once it’s in power. When you have a Republican president and a Democratic Congress, you have the makings for that kind of a scenario.”

BRIAN CALLAHAN

Account executive, Prudential-Bache Securities, Anaheim.

High: 2,330

Low: 1,670

Close: 1,825

“The market might be off in 1988. But it will feel like we had a good year.”

ROBERT L. CITRON

Orange County treasurer-tax collector.

High: 2,100-2,200

Low: 900

Close: 1,000-1,100

“I think June will be the swan song for the stock market. During the summer, bad news or adverse news will start coming out. People will then look back and say Jan. 1 was the official end of the bull market. I think that we will have started a recession by no later than October. . . . We will have major corporate bankruptcies in 1988. . . . I don’t look for 1988 to be a wonderful year.”

BOB McDONOUGH

Chairman, Remedy Temporary Services, San Juan Capistrano.

High: 2,150Low: 1,600

Close: 2,075

“I feel good about the New Year.”