The Journal News from White Plains, New York • Page 39

section Sunday April 3, 1994 Rockland Journal-News 'A oney restaurant SnJdessertathome. Stocks E4-E9 Money section: 578-2424 Strong economy can send markets reeling Semiconductor stocks smart and profitable A three-year stock streak! That's what a couple of pros see for the semiconductor stocks that shot up 63 percent and 53 percent in '92 and '93. They got drubbed in the recent market selloff, but they're still running rings around the market with an average 14.5 percent for the year. Our two bulls are Erik Jansen and John Marren. They track the semiconductor industry for Alex, Brown Sons, a when the markets reopen tomorrow.

This disconnect between the markets and the economy is rooted in the perennial fear that strong economic growth will lead to inflation and higher interest rates, the things investors fear most. But three other truths about Wall Street also are at work here: It's looking at next year, not last week. It's a long way from Main Street. running at full capacity and whose prices for raw commodities "are beginning to rise. By traditional standards, these are indications that wages and prices soon will begin to climb, pulling with them interest rates.

Pessimists fear high rates will choke off the recovery and send stock and bond prices into the cellar. Optimists argue that fears of inflation and higher interest rates ECONOMY continues E3 It moves to its own rhythm that has nothing to do with economic reality. "The fundamentals of the markets these days are not the inflation rate or the unemployment rate but the underlying architecture of speculation," said Jim Grant, editor of a widely-read newsletter on interest rates. Wall Street anticipates news. The rising employment and brisk growth that the economy has generated since last summer was reflected in the strong run-up in stock and bond prices through last year.

What the markets may be doing now is reflecting a widely held view that inflation and interest rates will be higher, and economic growth will be slower, in 1995. But how much higher and how much slower? Pessimists see an economy that has nearly reached full employment, where auto plants are The Washington Post WASHINGTON If this were a best-selling book, it might be called "Why Bad Markets Happen to Good Economies," Once again Friday, Wall Street investors ran for cover on the news that things were looking up for American workers and consumers. Even with the stock markets closed and many traders off for the Easter weekend, bond prices fell sharply, setting the stage for stocks to follow suit not eassf oe Dl reel top Baltimore brokerage firm. Semiconductor companies make the computer chips or the brains for such everyday products as calculators, VCRs and personal computers. Why is our duo as smitten Environmental magazines choke on their own enthusiasm DAN DORFMAN Money Mailers IS." GARBAGE 1 "'I v.

as ever? "Because semiconductor technology is the key to creating a new information superhighway to link households and businesses around the world by computer," Marren says. The two favor eight companies whose earnings growth is pegged at 20 percent to 35 percent a year the next three to five years. Their 12-month outlook for the stocks: 25 percent to 50 percent. Fueled by a peppier economy, semiconductor sales are likely to jump 20 percent this year because of continued strong demand and stable pricing, he says. Sales jumped 29 percent to $77 billion in '93 after a 10 percent rise in '92.

Prices are staying up because orders are running well ahead of shipments, Marren says. Orders ran 15 percent ahead of shipments in February after running 10 percent higher in January. That imbalance, Marren tells me, is preventing prices from falling as they usually do each year. Other major pluses: An emerging economic recov 'f By David E. Kalish The Associated Press NEW YORK They harbored dreams of spreading the green gospel.

Publishers rolled out new magazines like Buzzworm and Garbage that preached waste reduction, energy conservation, 1 forest preservation. But now the roughly half-dozen publications that sprang up around Earth Day's 20th anniversary four years ago this month are falling about as fast as clear-cut trees. Buzzworm is in bankruptcy. Garbage cut its frequency after barely breaking even. magazine is living hand-to-mouth.

Even entrenched magazines are hurting. Despite the popularity of recycling and other initiatives, Americans in general and magazine readers, in particular aren't as interested as environmentalists in green product updates and the latest dirt on polluters. Moreover, they are reluctant to pay around $30 a year for magazines when much of the same fare is supplied by newspapers, newsweeklies and television. "I'm not sure there was a euphoria except by the publishers themselves," publisher Joel Ma-kower said. He should know.

Four years ago, Makower started The Green Consumer Letter, a monthly eight-page newsletter with information on green investing to energy conservation printed on recycled paper. He was forced to close it in January after subscriptions fell to a few thousand. "I made the naive but rational-at-the-time assumption that there was going to be a good steady market for this," Makower said. What's clear is that publishers overestimated the concern aroused by Earth Day fervor, the anti-regulatory policies of the Reagan decade and disasters like the Exx-on-Valdez oil spill. Interest lags A Roper Starch Worldwide poll finds that one-fifth of Americans felt strongly about the environment last year, down from one-quarter in 1991.

Consumers most likely to spend more for green products fell from 1 1 percent in 1990 to 6 percent to 1993. One reason is the economy's sluggish emergence from the 1990-91 recession. Readers are less likely to renew subscriptions to magazines not considered essential. Faced with a choice, Americans with only modest interest have turned to more conventional news sources that have expanded their green coverage. Trend watchers expected the shakeout.

"Any time a new issue comes up on the radar screen, there tends to be an initial panic. Then we become more informed, people start to take action, address the The Associated Press FUNDAMENTAL CHANCE: Publisher Patricia Poore and Managing Editor Bill Breen display copies oj Garbage magazine in their Gloucester. newsroom. The struggling magazine now focuses on 'environmental insiders' and publishes quarterly instead oj bimonthly. 'I'm not sure there was a euphoria except by the publishers themselves.1 Joel Makower, publisher of The Green Consumer Letter, which he closed in January after a four-year run in debt.

New identity for Garbage Garbage magazine also is struggling for a profitable identity. Started in 1989 by the publisher of The Old House Journal, the bimonthly initially offered standard fare like articles on composting and walking to work. Subscriptions grew to 125,000 by late 1990. But amid disappointing renewals, Garbage grew more adversarial by challenging accepted environmentalist opinions on key subjects. One story questioned whether the ozone layer's depletion was a serious problem.

Garbage lost some angry readers in the process. This year, Garbage underwent an even more fundamental shift. The publication halved its frequency to quarterly, dropped advertising and refocused on what it calls "environmental insiders" readers like environmental activists, regulators and corporate executives. "Time to Dump Plastics Recycling?" asks a story in the debut Spring 1994 issue. Another details Earth First! founder Dave Foreman's plan for returning millions of North American acres to wil derness and stresses that "emK nent biologists back him." "What I've come to think is (.

there's really nothing such as a stand-alone environmental life- style," said editor and publisher; Patricia Poore, who also heads The Old House Journal. "It's really an oxymoron you can't really! live in the 20th century and really be back to the land." You wouldn't know it from a five-year-old magazine steeped in environmental values. The February issue, for example, tells "The Dirty History of Nuclear Power" and how caffeinated environmentalists can choose "Coffees With Conscience." Despite its nonprofit status foundation grants are up to 18. percent of its $1 million annual budget, with the rest from sub- v-scriptions the monthly was forced recently to cut costs by slicing circulation one-third to 50,000. "We've been pretty hand-in-' 4 mouth," publisher Doug Moss said.

Even environmental groups -that publish large-circulation magazines for their members are struggling. In 1991, Greenpeace MAGAZINE continues E3 founder of Buzzworm. Buzzworm's plight Launched six years ago, zworm broke stories like pesticide spraying on airplanes and amused readers with irreverent pokes including a parody of a poacher's catalog of endangered wildlife. Circulation grew to 110,000 at its peak. Buzzworm was one of the few to claim success in luring big advertisers such as Chrysler and Absolut vodka.

Even with ads the bimonthly lost money, renewal drives were too expensive and readership fell. Last fall, Buzzworm changed its name to Buzzworm's Earth Journal to reflect a fresh emphasis on culture, eco-travel and literature, and halved frequency to four times a year. But the publisher of Earth, an earth science magazine, sued Buzzworm over the new name as the company was trying to recapitalize its finances. When the deal fell through, the legal expenses helped push the company over the edge. In December, Buzzworm sought Chapter 11 bankruptcy protection in federal court in Denver, nearly $2 million ery in Europe.

New and expanding applications for a host of chip-dependent -electronic products. Increased business spending on chip-using electronic systems now 45 percent vs. 35 percent in 90. Jansen's top chip maker is Altera He sees volume growing 30 percent to 35 percent a year the next three to five years, sparked by sales of unprogrammed chips. These easy-to-use chips allow designers to turn out finished products more rapidly with more features.

"It is perhaps the most important semiconductor product in the world," he says. He sees earnings nearly doubling in just two years from $1.01 a share in '93 to $2 in '95; '94 net is pegged at $1.58. His 12-month stock target: $45. Marren's No. 1 choice is Atmel (43.75), a niche player that provides chips for increasingly popular portable electronic products.

Its chips can be found in every Motorola cellular phone. Marren pegs earnings at $2.20 in '94 and $2.65 in '95. It earned $1.47 in '93. His 12-month stock target: $60. Their other choices: Xilinx another maker of unprogrammed chips.

Target: $73. Cypress Semiconductor which bought two firms in '93 that'll produce better results using the company's broad distribution channels and low-cost manufacturing capabilities. Target: $26. Integrated Device Technology one of two companies that provides a key memory mechanism that works with Intel's hot-selling Pentium personal computer. Target: $40.

Linear Technology a firm that builds chips for market niches with little or no competition. Target: $60. Dallas Semiconductor which also offers a diversified range of niche products. Target: $26. Level One Communications which provides specialized communication chips for the burgeoning information superhighway.

Target: Obviously it's not a one-way street with semiconductors. If the economy doesn't live up to expectations, the stocks could get bashed. Any slowdown in personal computer sales will also hurt, because about 25 percent of all chips are sold to PC makers. Still, our two bulls say semiconductors remain the place to be that is, if you want to keep your portfolio in the chips. Dan Dorfman is a syndicated writer.

His column appears here on Sundays. problem, and people's concerns become a bit muted," said Bradford Fay, vice president at Roper Starch, the marketing and public opinion research firm. "It's not because the issue has gone away, it's because progress is seen. The fact that we had a recession forced this sort of pragmatic thinking to move in quicker than it might have otherwise." The shift has converted enthusiasts to cynics. "I'm not 100 percent convinced environmental journalism is a mainstream consumer interest," said a humbled Joseph Daniel, the publisher and FUTURE FILE By Phil Waga Watching the tube Most U.S.

households have morethan one television set, but the number wflh two or more video cassette recorder behind. 4 lit Percentage households wtth TV that have Two or Percentage of households with, VCIU that have One VCR to the FBI's Bureau of Justice Statistics. Of violent crimes, homicides, sexual assaults and other assaults have stayed relatively stable. Terms behind bars for robbery dropped from nearly 21 percent of the prison population in 1986 to under 15 percent today. While violent crime incarcerations decrease, prison populations are going up because more are in for drug crimes.

4 more TVs 74 2 One 1 Two or 74 mo VCR spent in the welfare system for people with voice mail boxes was reduced from six months or more to less than eight weeks. DOCTORS DON'T HAVE ALL THE ANSWERS: Physicians may be able to figure out what's wrong with you, but they're pretty bad at knowing the price of medications they prescribe. Drug Topics magazine reports that when 100 doctors were asked to estimate the price of the 25 drugs they prescribe most frequently, they underestimated the price of 18 of the drugs. In several cases, physicians miscalculated the price of some drugs by more than 70 percent. WHY THEY'RE INCARCERATED: Nearly 47 percent of America's prison population is incarcerated for committing violent crime, a drop from 55 percent in 1986, according ONE DAY SOON, HOMELESS people asking for quarters may just want to check their voice mail.

The first voice mail boxes for the homeless were launched on the West Coast three years ago and the program has been successful in helping find jobs and homes, experts for the homeless say. They add that similar programs will almost certainly dot the country in a few years. For many homeless, having no telephone means a life filled with obstacles has still more obstacles. If someone has come up with a home or a job for them, there's no way to reach them. And if they don't want to appear homeless, not having a phone gives it away.

The Worker Centre of Seattle, which launched the first voice mail boxes for the homeless, says the program has helped 650 people find jobs or homes. The average time Li ipVi Liu PUMP PRICES NOT THAT BAD: YOU HP may be complaining about the price of gas, but Americans have it pretty good compared to the rest of the world. Runzheimer International, a Wisconsin market research company, says Americans pay an average of $1.11 a gallon for self-serve, unleaded gas. In Tokyo, the average price is in Hong Kong it's in Paris it's and in Milan it's $3.54. i Staff grapheMarK Wauben i i.