Chicago Tribune from Chicago, Illinois • 81

Chicago QTrikne 7 Section 3 BUSINESS finance Ktorocron MARKETING TRANSPORTATIOH MONDAY, DECEMBER 7, 1970 Investment Scene Dow-Jones Average of 30 Leading Stocks 9001 i i i i i i i i I I I owler Sees urn From Wall Street Sales Force Finds Rising Buying Spirit Priming for 1972 II Nov- 21 Dec 4 850 ,823.13 816.06" 850 i 783.68v 800 -ni I 1 800 750 W- r-i IP -750 7oo 1 1 1 1 1 uly-----m EXTREME RANGE 1 650 HIGH LOW I 650 lval "-May 26 627.46 764.45 631.16 600 817.61 1 1 600 776.16 735.74 BY JOSEPH EGELHOF Chicato Tribunt Prtsi Senrlctl BY GEORGE GUNSET President Nixon is recognized as one of the most astute American politicians of this century, but rising unemployment does not gain votes for the party in power. Therefore, since the President likes his job, a growing Market Strategy "We noted that monetary development! could be a major determinont of the stock market's near-term course. The response of the market is becoming increasingly apparent. We advise a somewhat more eg- firm said. "More importantly, industry output, stimulated by the makeup factor at General Motors, should climb substantially above this year's depressed levels." Ait I Recent Prlet 17 Price Uinta Amer.

Motor It Chrysler 3t-H Ford Motor J2 M-37 General 77 V-B Moody's Investors Servica alsn saai a Kiihstantia! criln in number of observers conclude IP0QBHt0 fM10oft1 II A 1i the pumps are bemgprtaed for ond mM tiep up a Doumws evuuuui ujr COund2u situated stocks with StOCK ---j a i a i ontA fil.v nrt vr riHtvr uvw i vmtvMWff jvi aiww -a preceueu uy a iiaiug market next year. Wl." Standard Poor' Out- increasing population, a strtp- JJEW, YORK, Dec. 6 The feedback of information to from its large sales force indicates that consumers have shown signs of increasing confidence. William J. Murphy, president and chief executive officer, cautioned In an interview that consumer confidence still is vulnerable to pessimistic communications.

He said the old saying about nothing to fear but fear itself is applicable in the situation. He also noted that the feedback is not the product of In recent weeks the Grolier chief has been confronted with conflicts of sorts between what he feels and what some professional analysts have been saying. One professional called him with a voice that reminded Murphy of a "black cloud" and asked if Grolier wished to revise its projections downward in view of conditions. "And I'm sitting here looking at great things," Murphy recalled. Gives His Impressions When he went on his last series of trips around the country talking to the Grolier force, his feelings shaped up about look.

Sffl.ii i i i Lb50 Jan. Feb.Mar.ADr.MavJuneJulvAuqieDt.OctMov.Dec 1969 1970 foye Ohnemus page rate approaching 7 million units a year and a return el consumer confidence. General Motors is rated by Moody's as a buy for appreciation and income. Loeb, Rsosdsx thinks earnings should approach $7 a share in 1971 and resumption of an extra dividend is likely. Loeb, Rhoades expects Ford to earn more than $5.50 a share next year and Moody's recommends the stock as a worth while purchase for income and capital gains.

Recovery of Chrysler's earnings in the range of $2.5013 a share is seen by Loeb, Rhoades, who said it has speculative attraction for accounts mindful of the risks. as follows: The consumer, after prolonged worry about losing his job or having his pay cut, was finally saying to himself, "I "a sophisticated, knowledgeable survey" and that he is not a professional economist. Can't Be Ignored Nevertheless, the impressions of Grolier's salesmen selling the Americana Encyclopedia and other hooks cannot be ignored. After Strike Loeb, Rhoades Co. believes that auto stocks, whose prices weakened after the General Motors-United Auto Workers settlement, provide an opportunity to accumulate in accounts seeking good capital appreciation thru major cyclical companies deriving demand for consumer spending.

"Given a recovery in consumer spending next year, particularly on big ticket durables such as autos, along with some catchup in volume lost this year, industry sales are expected to rise to over 10 million units," the investment Income, Expenses Can Be Adjusted for Tax Break have that horrible year and a half over and I'm still here, still feeding myself." Grolier One who agrees with this view is W. Scane Bowler, chairman of Pioneer Western financial services complex which includes the Pioneer group of mutual funds. Can Create Economy "We have a politically con-troled economy and Presidential powers are enormous," he said in an interview. "With a great buddy in Arthur Burns chairman of the Federal Reserve Board, Nixon can create the economy he wants." This means a large budget deficit maybe $25 billion and lower interest rates. Also in the cards is a return of inflation, he said, and, after the 1972 election, a return to tight money.

Having been bullish on the stock market for the last three or four months, Bowler said his funds have been interested in life insurance issues, gold stocks, farm machinery, construction industry and utilities. Hit "Ridiculous" Peaks "Life insurance issues probably hit ridiculous price peaks in 1964," he said. "But since then, earnings have appreciated 50 to 60 per cent, the labor factor is in check, premium income is up and they are money sensitive." Gold stocks are a worthwhile holding, he said, because of increased commercial use and "gold always gets a good play from Europeans who are not I- i Expects to Change Apartment Density to offset $1 of ordinary income. Cutoff for Sales To realize gains in the regular way, sales must be made no later than Dec. 23.

Losses may be realized from sales made thru Dec. 31. A taxpayer who will become 65 in 1971 and is planning to sell his residence should consider postponing the sale until after the first of the year. Under certain conditions, any gain on the sale of his residence by a taxpayer aged 65 could be wholly or partially tax-free. Finally, for tax reasons a taxpayer who is planning to marry in the next few months may be better off to do so before Jan.

1 rather than afterward. A married couple can file a joint return which carries a lower tax rate than a single a BY ALVEV NAGELBERG 31 salesmen were finding "more discretionary funds available for educational reference materials." There was a feeling of confidence coming back. "I was really sensing that the public was willing to regain confidence," said Murphy. "The psychology is there. If given a push in the right direction, it could be stimulated." Glimpse of Future Encyclopedia people are strict about data and sources, and Murphy does not want to be quoted as a professional economist, but his glimpse of the future is as follows: "I think 1971 is going to be similar in many respects to 1970, a question mark, but it will get better as it goes on.

I think 1972 should be an excellent year." Murphy, 43, is the son of Fred J. Murphy, chairman of the executive committee, who at 81 still goes out occasionally to see if he can sell encyclopedias. What the taxpayer can do now to cut his 1970 income tax is explained in the following article prepared by the Illinois Society of Certified Public Accountants. A taxpayer who wishes to reduce his 1970 income tax payment should give thought to certain steps he can take before the end of the year, such as prepayment of some 1971 bills or even speeding up marriage plans. On the other hand, if he expects his earnings in 1971 to be considerably greater than this year, he may find it advisable to report as much income as possible in 1970 and defer to next year some expenses that might be deducted now.

Such adjustments of income and expenses are perfectly legal, but one should know which items can be deferred or speeded up. Most taxpayers, for instance, receive a large part of their income in wages commissioner of the Department of Development and Planning, is studying methods of altering the formulas used to determine the number and size of units in apartments built in B-6 and B-7 business and C-S commercial districts. Ha said the new formulas will be ready by yearend. Officials of the department have been meeting with civic groups, like the Greater North Michigan Avenue Association which has been fighting for changes in the formulas for many years. The city Department of Development and Planning expects to give developers a welcomed Christmas gift this year by recommending an easing in the density requirements for apartment buildings put up in the business and commercial zones from Oak Street to Roosevelt Road and the lakefront to the Near West Side.

Backers ot the action believe it could stimulate construction of up to 10,000 new. apartments and a higher ratio' of "family-sized" units. Martin Murphy, assistant return for the year in which they are wed, even tho the famous for making right in- to minimize their tax liabilities by using it every other year. They use the standard deduction one year, but itemize deductions the next, crowding as many deductible expenses as possible into the years when they itemize. For example, they may prepay estimated state income taxes; the last installment of the Illinois income tax is due Jan.

15, 1971, but it could be paid Dec. 31, 1970. Interest on mortgages and personal loans due in January might be prepaid in December, and charitable contributions may be speeded up or delayed. 4 The same applies to medical expenses. Gain, Loss Freedom Taxpayers have almost complete freedom in deciding when to realize capital gains or losses from investments, altho tax considerations should not be the only factor in buy or sell decisions.

One reason for postponing capital gains until 1971 is that the 2.5 per cent federal surtax will not apply after this year. But if your long-term gains are likely to exceed $50,000, a higher rate will apply in 1971 to capital gains; and if you had capital losses in 1970 to offset against gains, it may be to your advantage to take the gains now. It is sometimes preferable to take short-term capital losses on investments held less than six months rather than to wait and take long-term losses. Short-term losses can be offset in full against ordinary income up to $1,000 to reduce your tax liability, but under the 1969 Tax Reform Act it will now take $2 of long-term loss vestment decisions." ceremony takes place as late as Dec. 31.

On the other hand, for the opposite reason, it may be better to postpone a final divorce decree until January, rather than have it come in November or December. He still can. Bowler said farm machinery should turn around; the need for construction is obvious; and utilities have good growth rate, expect rate increases and are paying less for debt financing. or salaries and cannot control William J. Murphy There are more than 7,000 of these activists worldwide, including nearly 4,000 in the United States.

Their best customers are people who focus on the family future and are willing to invest several hundred dollars in it, payable over 36 months and this is a group with an important place in the consumer confidence picture. Furthermore, book salesmen seem to have a way of getting a good grasp of things. History records many notable former book salesmen, including Napoleon Bonaparte, George Washington and Christopher Columbus. Grolier, including subsidiaries selling mobile homes and water skis, had record sales and earnings in the third quarter and the first nine months of 1970. Sales Losses Diminish While international book sales have been way up and Murphy expects continued 15 to 20 per cent annual increases overseas domestic sales of encyclopedia-type books have been running below year-earlier levels, altho less so as the year goes on.

They were off 7 per cent in the last quarter of 1969, 14 per cent in the first quarter of 1970, 9 per cent in the second quarter and 3 per cent in the third. Murphy sees the improvement trend continuing this quar-ter. The 14 per cent domestic dip in the first quarter aroused the concern of Grolier executives and they have made unusual efforts to sound out the economy this-year. the timing. But they can delay or hasten the taking of capital gains or the sale of personal property, and they have considerable discretion in the payment of yearend medical bills and other deductible items.

Defer to 1971 Yearend bonuses paid by an employer can sometimes be put off until January. However, the Internal Revenue Service insists that taxes on income are payable in the year when the taxpayer is in "constructive receipt" of the funds. Even tho you persuade your employer to postpone payment of the year-end bonus until after the first of the year, the IRS may rule nevertheless that you were in "constructive receipt" in December, if that is when the bonus is customarily paid. Some taxpayers take advantage of the standard deduction "Million Dollar Kid" Fred Murphy became known as "the million dollar kid" when he led the Kansas City, branch office of Grolier, more than a half century ago, to sales of more than a millon dollars the first time this had been done by any branch office. The company was founded in Boston in 1895 and was named the Grolier Society after Count Jean Grolier de Servieres, a 16th century French diplomat and book collector.

It acquired American rights in 1910 to the Children's Encyclopedia, first published in London in 1908. Fred Murphy purchased Grolier in 1936 when it had sales of $2 million. Volume in the first nine months this year was $170 million. The company went public in 1954 and was listed on the New York Stock Exchange in 1965. Grolier says industry sources credit it with about 30 per cent of the industry's sales; Encyclopaedia Britannica and Field Enterprises publishing World Books with 25 to 28 per cent each, and Crowell-Collier Macmillan with about 10 per cent.

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