Times-Advocate from Escondido, California • 14

TIMES-ADVOCATE, Escondido, Sunday, Oct. 14, 1984 B6 On the move Hasbros idea department came up with an entire 4 million-year history of the good Transformers ana the bad the Heroic Auto-bots and the Evil Decepti-cons." The Transformers are produced by Takara, which did $109 million worth of business last year. Hasbro said it is spending about $8 million on advertising and has licensed Transformers to Marvel Comics, which has produced a four-part series. Robot invasion Latest toy craze means mega-sales for U.S. firms the MS-14C Mobile Suit Variation Gelgoog Cannon and ARV-C Astrogator Round Vemian Bu-zam, said: Japanese children have always liked mechanical systems as well as all kinds of vehicles, so that gave us the idea to combine them." Owens calls them the ultimate fantasy toy.

They became popular in Japan about 10 years ago with Bandai toy versions of Biomen, five television superheros who drive block-like trucks and rockets that, when joined together, form a giant metallic warrior. Our most popular robots are those from television," Haga said. The robots began appearing in the United States a few years ago and have been rising in popularity. Bandai, whose 1983 sales were the equivalent of $260 million, and which today commands some 60 percent of Japans robot toy market, came out in 1982 with its Machine Robot line miniature robots that cleverly convert into nearly every imaginable conveyance, from submarine and bulldozer to dune buggy and the American space shuttle. Haga said he used to have about a hundred stalking about his apartment, but the neighborhood kids came and took them all away.

Twenty-four of the 40 models are on order for the U.S. market, where they are called "Gobots. Hasbro is going much further in its marketing of 27 robots that it has dubbed Transformers. Bonaparte Variable Tank 61-LC Tulcas or WM Walker Galliar Xabungle. We Invent names that sound strong and futuristic, said Haga, a mechanical engineer by training and the man behind the names for Bandais Devil Invaders, Zarios, Falgos and Casmodon.

Foreign-sounding words are catching. Other names come from genuine words such as Laserion (laser) or Saurstar (dinosaur), while Bandais "Blue Three robot sounds the same as Bruce Lee In Japanese. Takara engineers spend their time designing prototypes of new robots that convert into everyday objects, most recently microscopes, binoculars and radios, said Shusuke Kubota, head of Ta-karas planning department. Theyre always thinking of more unique, more fantastic ideas, Kubota said. "Half the time theyre not normal.

Like any toy, though, robots represent a certain risk. Takato-ku, another die-cast robot toy-maker, went bankrupt in July despite smashing success with its Macross Battroid Valkyrie VF-1S. They went under because of this," said toy wholesaler Yukio Munakata, holding up the 15-inch-long Orguss Nikick Ger-walk robot. Kids just wouldnt buy it. The Valkyrie folded up into a sleek F-15 Eagle jetfighter, but the Orguss series turned into heavy, ponderous spacecraft with too many rounded corners.

'We invent names that sound strong and futuristic said Haga, a mechanical engineer by training and the man behind the names for Bandai's Devil Invaders," "Zarios," "Falgos" and "Casmodon." The Transformers also have robotic names like Stars-cream, Optimus and Mega-tron. We have our own group for picking names, Owens said. We keep them locked up in the back and feed them raw meat. The Americans come nowhere close to rivaling the Japanese for creativity in picking names like HWR-10 Destroid Monster," mored Corps Variable Beet Ga-doll Beetrass. Tonka Toys and Hasbro Industries of the United States have both put in orders of $100 million to Bandai and Takara, Japans No.

1 and No. 3 toymakers, respectively, to import legions of the little mechanical men in time for Christmas. We will ship 75, 80 million dollars wholesale this year, Dan Owens, Hasbros vice president for marketing, said during a recent trip to Japan. Thats more than 10 million units and over three times the number of units shipped last year in Cabbage Patch dolls. Seiichi Haga, design chief at Bandai, maker of such robots as By Terri! Jones the Associated Piess Tens of millions of Japanese robots are trooping off in an invasion of the United States that Is turning into one of the years hottest toy hits.

No ordinary fighting robots, these creations are intricately crafted to fold up through a series of complex maneuvers reminiscent of a Rubik's cube into shapes ranging from jet-fighters and racing cars to cameras and stereo cassette recorders. Their names are as imaginative as the twists and turns it takes to transform them. There is Tequila Gunner, Idelian Can-grid Harbla," even Insect Ar Why are By Dick Marlowe Knight Ridder News Service So, whats wrong at Sears, Roebuck The worlds largest retailer is boldly exploring new paths of growth in the attempt to keep up with a fast-changing marketplace, and the plans seems to be working. But the investment community is looking the other way and insiders are selling. On the surface, everything looks great.

Sears seems to have found a way to be in all the right places at the right times. Although Sears is still considered a major factor within the retail industry, it has become a lot more than that in recent years. With its ownership of Allstate Insurance, Dean Witter Financial Services and Coldwell Banker Real Estate, Sears has bought its way into three other hot industry away from Sears? Keith E. Day of Escondido has been named vice president and manager of Security Pacific National Bank's Rancho Santa Fe office. Day joined the bank in 1959 as an administrative Keith E.

Day assistant and was Security Pacific, most recently vice president and manager of its Vista branch. Dennis M. George has been appointed manager of the San Marcos branch of Bank of America, Vice President F.K. Bunge has announced. George has been an assistant vice president and personal financial services officer in the banks Vista branch since May.

He started with Bank of America in 1989 and has also worked in the Poway and Escondido branches. Ruth Fleury of Maggi's Flowers in Escondido has been appointed a district representative for Florists' Transworld Delivery. In her new position, Fleury will handle FTD membership applications from area florists and promote business among member florists. Fleury was nominated to the post by local FTD members and appointed to a two-year term by FTD President Curtis W. Lang during the associations recent convention in Quebec.

Guy W. Winton III of Escondido has joined Ray Winton Associates, a San Diego-based architectural and engineering firm, as assistant to the principal engi- Guy W. Winton RayWinton Wmtons duties will include directing the companys projects through the proper governmental agencies. He is experienced in condominium planning and hydraulic and hydrology calculations, among other engineering functions. Winton recently received his bachelor of science degree from San Diego State University.

He has worked part-time for RayWinton Associates since 1980. Donald Shaw, corporate counsel with Carlsbad-based Mail Boxes Etc. USA, has been appointed to the California Franchise Development Task Force by state Sen. David Roberti, D-Los Angeles. The panel deals with problems faced by small business franchisees or franchisors and serves as an adviser to the Senate Select Committee on Small Business Enterprises, which Roberti chairs.

Mail Boxes Etc. USA is a nationwide franchise that offers private mailbox rentals and packaging and shipping services. Vicki Stark of Bonsall has been named a sales director for Dallas-based Mary Kay Cosmetics founder and chairwoman Mary Kay has announced. Stark joined the company in July 1983. Her latest appointment followed a three-month qualification period in which she exceeded company sales goals.

To prepare for her new position, Stark attended a week-long training session in Dallas. Dorothy Lundy of Escondido has been named operations manager for the National Association of Music Merchants, a retail trade association formed in 1901. Lundy is a former director of personnel for the Times-Advocate and has been a management consultant for newspapers and other companies in California and Oregon. Because the return on zero coupon bond is postponed until maturity, the investor is assuming that the issuer will still be around to pay up when the bond matures. For this reason, it is also important that the Investor measure this comfort level of risk.

Credit risk is compensated for a higher yield. For the more conservative buyer, credit risk can be substantially reduced. The fixed reinvestment rate and the call protection of zeros make them convenient to use in IRA and Keogh accounts, but they are expe-cially useful where an individual must plan to meet future cash needs. Examples would be providing for a childs education or meeting disbursement needs out of a pension or profit-sharing plan. There are many issues of zero coupon bonds, and even though changes in the tax codes have made zero coupons a less attractive method of financing for corporations, it is expected that zeroes will remain an attractive tool to investors that will continue to be used and recommended by financial advisers.

Disc player sales going up as prices go down 87.5 cents at $31,625, the trend has been downward. The stock is now significantly cheaper than it was at its 1984 high of $40,375. Earlier this year, some analysts downgraded Sears as an investment opportunity, and it has been rough going for the stock ever since. What investors need to remember is that Sears is no longer a pure retail play by any stretch of the imagination. Financial-services companies and other interest-sensitive stocks have been taking their lumps recently, and that could be a part of the Sears problem.

John McNally, resident manager of the Dean Witter Reynolds office in Orlando, said, Its a cyclical business and it is just a lot tougher market than it was last year. The only other apparent obstacle in the path of Sears is considered nearly indestructible. And because the music is contained in digital form the language of computers many disc players can be programmed to play selections on the disc in any order. Sony, whose Walkman launched the industry trend of portable tape cassette players, earlier this month introduced a portable compact disc player measuring 5 by 5 inches. The player, called the D-5, will sell for less than $300.

Sony also introduced car stereos using the disc format. The decline in prices for compact disc systems in part reflect stepped-up production, which has improved the manufacturers efficiency per unit produced. But industry officials also acknowledge that the price cuts were a marketing move designed to quickly attract the attention of the broad public, especially the recording industrys biggest market By James F. Peltz The Associated Press The compact disc player, expected by its makers to replace the conventional stereo system within a decade, is beginning to enjoy its anticipated sales surge now that prices are falling. The players, which began arriving on U.S.

soil from foreign manufacturers in March 1983, initially cost about $1,000. But some audio retailers are now selling versions of the machines for as low as $350, and prices of the discs have dropped to as low as $13 apiece from $25. Only about 35,000 compact disc players were sold in the United States last year as the earlier high prices kept away most consumers save the ardent audiophiles. But with prices coming down, industry watchers expect between 200,000 and 250,000 players to be sold in 1984, and the producers of compact disc equipment hope the investors groups. Dean Witter Reynolds is the nations No.

2 brokerage, and Coldwell Banker is spreading its residential and commercial real estate operations from coast to coast. Most analysts agree that the Sears financial supermarket strategy is pure genius that will lead to significant long-range profits. Meanwhile, Sears has put together Sears World Trade through which it hopes to provide major chain stores throughout Europe and Asia with consumer products from its worldwide network of sources. Not forsaking the business that made it great, Sears is pumping $1.7 billion into a five-year remodeling program for its retail stores around the country spending about $2.5 million for each store to system will catch the same fire as did videocassette recorders, whose annual shipments now total several million after prices fell sharply. In addition, the manufacturers involved in producing compact disc systems have agreed on a standard format, so that a disc made by one manufacturer can be used on a player made by someone else.

In this way, the companies hope to avoid the confusion that initially accompanied videocassette recorders, which come in two main formats VHS and Beta. Disc sales totaled about 1 million last year, and this year should reach 4 million, forecasts Emiel Petrone, senior vice president in charge of compact discs at Polygram Records a leading maker of conventional albums and the discs. Digital Audio Disc a Terre Haute, disc maker that is jointly owned by Sony Corp. and CBS estimates disc sales will Financial Adviser By Michael BowersT A Columnist firms and issuing corporations promote the zero coupon bonds as "money multiplier notes, which can be purchased for as little as $250 and redeemed in 12 to 13 years for $1,000. Ten-year bonds can be bought for as little as $333, seven-year bonds for as little as $500.

Yields for investment grade issues range from 10.5 to 11.5 percent. Although investors will receive no income during the life of the bond, for tax purposes they will be considered to have received the money and will owe taxes on the "phantom interest. The IRS considers a zero coupon bond an original-issue discount bond, and it is taxed in the same fashion. The interest is calculated by subtracting the purchase price from the face value, then amortizing this over backing upgrade the Sears image. Retail sales, financial services, insurance, real estate, computers, telephones and world trade you name it, and Sears stands to make a profit from it.

It also is considered a plus that 50-year-old Edward Brennan stepped in as president and chief operating officer in August to replace Archie Boe, who retired. Brennan, who joined Sears 27 years ago as a salesman, is given much of the credit for turning around Sears retailing business. As Value Line Investment Survey points out, selling is also the name of the game in real estate, insurance and financial services. While the scenario would seem to suggest that Sears stock might be ripe for buying, investors are showing little interest. Although Sears shares closed Thursday up climb to 9 million industrywide this year.

As a result, in between seven and 10 years the compact disc will be outselling the album, Petrone predicts. These promising forecasts of the compact disc systems revolutionary effect on consumer audio habits have accompanied the system since it was unveiled in the early 1980s. Conventional stereos use a stylus, or needle, to read sound that is engraved in the grooves of the vinyl album. The disc players, however, employ a laser beam that reads digitally encoded microscopic pits and plateaus that are embedded on the disc making it much less prone to distortion and background noise than conventional systems. Moreover, a plastic coating protects the disc from dust, dirt and scratches, and since the discs surface is essentially untouched, it is Creative the time to maturity.

Each year the cost basis of the bond is increased by the same amount that is reported as phantom income. Since owners of zero coupon bonds must pay taxes each year on interest income they will not receive until maturity, most financial advisers recommend these investments for tax-advantaged investors only. This limits the individual market to IRA and Keogh accounts, where the phantom interest can accumulate on a tax-deferred basis, and to custodian accounts for children who are in a very low tax bracket. On the institutional side, because of the tax-exempt status of pension and profit-sharing plans, their managers and advisers are prime buyers of zero coupon bonds. There are several advantages to owning a zero coupon bond and foregoing interest payments.

One reason is that the reinvestment rate on interest income from zero coupon bonds is fixed for the life of the bond, whereas the reinvestment rate for an interest-paying bond can vary daily. The zero coupon bond eliminates the risk of the fear that the publics ability to spend may be tailing off and that lower consumer demand would cut into the earnings of all retailers. In recent weeks, Sears stock has made the hit parade in reverse, scoring a flat zero on the insider trader ratings. With two insider buyers and 18 insider sellers, Sears is among 14 Big Board companies whose shares have earned the lowest possible insider rating. Even Norman Fosback, editor of The Insider," is confounded by the dismal Sears rating.

It looks like a pretty good company, Fosback said, but I have kind of learned to accept insider judgment. We cant always know what they know, but we can do what they do. Ours is not to reason why, but to follow suit. teen-agers and young adults. Indeed, the awareness level (of the system) is not as high as we wish it would be, acknowledges John Briesch, vice president for audio marketing at Sony Corp.

of America. Petrone agrees, saying the "biggest struggle ahead of us is to educate the consumer as to what the technology actually does. Several producers of both the players and discs are joining efforts to bolster consumer understanding. For example, Polygram and Magnavox the unit of NV Philips of the Netherlands that together with Sony first introduced the players are offering their products to record stores at discounted prices. The object is to further entice the retailers to at least carry a demonstration model that could trigger disc sales.

Says Petrone, Weve found the demonstration to be the most effective selling tool. A zero coupon bond is one that is issued at a large discount and at maturity is redeemed for the par amount of $1f000. vestments. However, because of the short maturity of most zeroes and their deep discount to par, zeroes can provide downside protection. Assume, for example, that an investor bought a 10-year zero at 33 yielding 11.25 percent to maturity.

If, one year later, the market has seen no change in rates, the bond will have moved to about 37, a 3-point gain. If rates were to increase, a 125 basis point move would have to take place before the bond would fall below its cost. This simply demonstrates that a zero coupon bond is a deep-discount bond taken to the greatest extent. An evaluation of the credit risk involved is most important when considering a zero coupon bond. Zero coupon bonds: help for retirement planning Creative investment bankers in 1981 came up with the original-issue discount bond.

By issuing these bonds, a corporation could reap tax benefits and pay a slightly lower net interest cost. The extreme of the original-issue discount bond was the zero coupon bond. Not quite haphazardly, the development of the zero coupon bond coincided with the liberalization of individual retirement accounts (IRAs). Investment bankers saw not only their issuers ability to take advantage of tax benefits and lower interest costs, but also their ability to tap the huge amount of potential investment capital in the IRA market. A zero coupon bond is one that is issued at a large discount (as much as one-third to one-fourth of its face value) and at maturity is redeemed for the par amount of $1,000.

During the interim, the investor clips no coupons and receives no interest hence zero coupon. At maturity, the investor receives in a lump sum the principal plus the interest that has accrued on the bond. Many brokerage reinvestment that is associated with a conventional bond where the effective yield can be less than the stated yield if rates decline after the bond is purchased. Zero coupon bonds also provide call protection to bond holders. If rates fall, companies can call conventional bonds that were issued at higher rates, pay them off, and refinance the debt with new bonds at a lower interest.

Theoretically, companies could call zero coupon bonds. However, they are unlikely to call bonds on which they have to make no current interest payments. Investors pay a price for these advantages in the form of lower returns. Yields on zeroes are 50 to 100 basis points less than on conventional bonds of equivalent quality and maturity. As is the case with any investment, there are risks associated with the purchase of zero coupon bonds.

While reinvestment risks are concerned with the specter of dropping interest rates, there is always the possiblity that interest rates will rise. If they do, the investor is locked in at a rate that is no longer competitive with other in-.