Detroit Free Press from Detroit, Michigan • Page 20

'W fc" 'W VNTV "2-B Sunday, Sept. 30, 73 DETROIT FREE PRESS LAST WEEK'S WINNERS AND LOSERS 1 Vv r.i Coastal States Soars 62 After Trading Ban Lifted i Press Chicago Dally New Servlc Detroit ifreeflress Ideas for In vestors Darwin and Hamilton, Australia. The company has opened 12 overseas franchises this year, and now has 86 in 39 countries. Royal Crown stock gained 16 percent. Redman Industries predicted it would report a September-quarter loss of around $6 million, compared with a $3.8 million profit for the same period in 1972.

It blamed the losses on real estate activities and reserves created for future losses. The stock dropped 13.9 percent. Fleetwood Enterprises fell 17.4 percent after analysts noted that previously reported July-quarter profits of 31 cents a share were less than anticipated. Lockheed Aircraft Corp. said it may not be able to repay all of its government-guaranteed loans by the Dec.

1975, deadline. The stock dropped 7.3 percent. Eastern Airlines, down 7 percent, is1 expected next week to dump its president and chief operating officer and disclose a deteriorating financial outlook. Coastal States Gas Corp. stock had not been traded on the New York Stock Exchange since June 5.

But Thursday, the Securities and Exchange Commission cautiously lifted its and the price of the stock jumped. Due to an influx of buy orders Friday, Coastal States didn't trade until a half hour before the market closed, but it still managed to score a solid gain. In the abbreviated week, Coastal States common surged 62.1 percent, or $4.50 a share, to $11.75. The preferred A gained 19.8 percent, or to The way was cleared for a resumption of trading when Coastal States agreed to a permanent injunction sought by the SEC, which had charged the company with violations of reporting and anti-fraud provisions of securities laws. At issue were statements regarding the company's earnings goals and availability of reserves to meet long-term contractual commitments.

COASTAL STATES didn't admit or deny any wrongdoing, but it did agree to make changes in its operating and management report that fiscal 1973 profits and sales increased about 13 percent due to "very strong demand" for rice. Minneapolis-based Apache Corp. said its Apeco Inc. unit completed a gas-condensate discovery well in Oklahoma that could be significant. Apache stock gained 17.8 percent last week.

Royal Crown Cola Co. continued its international growth, adding three franchised soft-drink bottling plants in Sydney, DON CAMPBELL ON FUNDS structure. That included electing seven new independent members to its 13-member board, naming a new three-member executive committee, appointing a new independent auditor and reviewing 1971 and 1972 financial statements. The SEC said it is continuing its investigation of Coastal States and "cautions broker-dealers, shareholder and prospective purchasers that they should consider carefully currently available information and any information subsequently issued by the company." Avon Products showed up in the unfamiliar company of the Big Board's losers list, slumping 8.7 percent, or $9.50 a share, the 21st-biggest loser of the week. The fall accompanied news that Avon's third-quarter profits won't show much -of an increase over a year ago, and sales will show only a "modest" Increase.

In response to its pessimistic assessment of the future, Avon said it instituted new marketing programs involving additional price discounts on selected products and incentives to representatives to attain designated sales levels. Gould Inc. warrants jumped 37.2 percent to capturing the No. 8 spot on the" Amex. The company said it plans to buy up to 1.6 million of its warrants at $7.25 each.

Houston-based Riviana Foods, up 26.7 percent, expects to "HHJHI.IHIIIUlll II Many Self -Employed Ignoring Keogh Plan Pension Option BY DON G. CAMPBELL When you're old and gray, who is going to take care of your financial needs? Uncle Sam? Yes, to a large degree, thanks to Social Security. Your Possibly, thanks to the explosive growth of private pension plans in recent years. O0W JONES' SB0 5 -'L INDUSTRIALS 840 li investment in a lump sum, this, too, is accorded special, favorable tax treatment. In spite of the popularity of the Keogh Plan since its pas- sage in 1962, it is still grossly' misunderstood and is, admittedly, rather complex in its restrictions, prohibitions and; limitations invariably re-' quiring that the individual' seek out professional help from his lawyer, certified pub-1 lie accountant or sometimes' both.

These things may account for the fact that there are an estimated 5 million Americans still not utilizing the Keogh! Plan even though they are, quajified to do so. High on the' list are workers who hold! 920 a If. 900 Willi' 180 You? Perish the thought in these days of sky-rocketing prices, an eroding dollar, and high taxes. UNFORTUNATELY, though, the self-employed individual has very little choice in the matter unless he's content to retire on his Social Security alone. One of the best things that happened to both the self-employed and the mutual fund industry, however, was the recognition by Congress back in 1962 that the retirement problems of these people who have no employer to fall back on were a matter of national con-c n.

And the concern expressed itself in the passage of the Keogh Plan or, officially, the Self-Employed Individual Tax Retirement Act. It was a'major breakthrough since, for the first time, it gave individuals some of the same tax advantages that employes covered by a corporation-sponsored pension plan have long enjoyed. It permitted the self-employed to set aside, tax-free, up to $2,500 a year (or 10 percent of total earned income) in a retirement-investment program. Earnings and profits on the investment are allowed to accumulate, and also escape taxation until the individual retires and begins drawing on his investment. If, at retirement, the individual chooses to withdraw his it TRANSPORTS 170 Darwinian Theory Applied to Cars Continued from Page IB Such people suffer from what he calls "the tank mentality," Sansom said.

"They ignore the costly community safety effect that results from an increase in large cars. A substantial segment of our population simply cannot afford large cars. Clearly your chances of colliding with a large car are minimized when you minimize the number of large cars," he -argued. But in ominous terms, Sansom said "in eight to fourteen metrooolitan areas, the auto cannot change enough to survive In Its present numbers. The environment there, and in other growcu areas, is swiftly becoming hostile to cars." Sansom made three points about reducing traffic in those metropolitan areas: First the EPA is not proposing reducing necessary trips "we're talking about picking up those trips on mass transit and by car pooling." Second, the government and the EPA are "trying to redress the imbalance, and structure an environment more favorable to mass transit," he said.

"We're seeking to give people.a choice the choice to use mass transit if they prefer." And the third point is that "we're not going to let the heavily-impacted cities renege on their obligation to better their mass transit systems," he said. Far from being "un-American" as it was called when it first started discussing transportation controls the EPA is being "American" in providing some freedom of choice, Sansom said. down a full-time job and are covered by a private pension plan, but who also free-lance, or engage in a second job 160 I ') 150 105 UTILITIES lililiilil Hi' 'lln'llll the income from which could be used to establish a secondary retirement program. IF THE LEGISLATION proved to be a boon to the' self-employed, though, it was' no less important to the mu-l tual fund industry, which' emerged as the least compli-' cated way to participate in thai Keogh Plan. At present, more than 200 funds have qualified1 as the investment avenue fori Keogh programs, and theyi embrace about 200,000 individ-! ual accounts.

85 Be Cautious On Long Bonds BY ELIOT JANEWAY Chicago TrlbuM About nine months ago, I followed your advice in remort- gaging my home at 74 percent, since the former mortgage was 4 nearly paid. I purchased corporate bonds, as you recommended at the time, for high income and safety, figuring that the interest from them would pay off the new mortgage. The bonds are rated yield 8.5 percent to maturity in 1986; I bought them at 90. 1 am 52, and earn $30,000 a year. You seem to have switched your 1980 thinking about long term bonds, and are now recommending avoiding them.

If I sell now, I'll lose 10 percent or more. Should I ride it out, which I can, or sell? A. L. South Haven. A I certainly have switched my thinking.

Recommending long-term bonds was not popular in 1970. But the price, repre- sented by interest yields on was right. Moreover, interest rates were topping out. Recommending long-term bonds is popular now. But I doubt that long-term interest rates are close to topping out.

Mean- while, they are unattractively low, relative to short-terra inter-est fates. Therefore, I am not ready to recommend them yet. question posed by any 10 percent capital loss is whether to take it, and to "bank" it as an offset against future capital gain, or to average your cost down by buying more. I think that switching would be safer and better for you. Here are thefacts about myself: 29 years old, bachelor, engineer making $16,000 a year.

Rent Is $150 a month, and can presently save $400 a month. N6 real estate, no debts, and marriage plans. I currently hold $20,000 in Treasury bills maturing Feb. 14, 1974, with 8.4 percent yield and have $3,000 in a savings account. I also own a few shares In four industrial companies.

What shall I do with my money to beat inflation and receive an adequate return, especially when "my Treasury bills mature? i G.R.M. Mt. Zion, 111... A Roll them over. Sell out your odd lot holdings and build up your bank account.

The first defense against today's inflation is cash reserves. I wouldn't be surprised if some bright girl had marriage plans for you. I am just a few years away from retirement, but because of financial reverses the past three years, I will work at least part time after that. Of course, I will have to have additional income, and have been wondering when one should start cashing in good and poor stocks, bonds, to set up regular monthly income. The tax is lower at 65, but would not offset gains or losses necessarily if all were liquidated In one year.

What do you suggest? Miss D. B. Evanston, 111. A Clarify your misconception about the lower tax rate available to people aged 65 and over. It's limited to profits on home sales.

Taking all your gains and your losses would be a good idea anyway. Count yourself lucky if you can get out without owing a gains tax or suffering a loss. In a recent column, you urged the importance of life insurance on a husband and wife team, both working, with a combined income of $20,000, their children grown, and adequate savings. My wife and I are in our mid-20s and have no difficulty with savings. Either spouse could be self-sufficient in the event of the death of one partner.

My calculations show life insurance is a poor investment, when compared with even a 5 percent savings account. What are the advantages of life insurance that I'm overlooking? Mr. Mrs. M. Pullman, A No calculation needed.

Life insurance is a bad investment, not just a poor one. You are making the popular mistake of confusing insurance with investment. (Do not confuse at with 'Saving either.) I have explained before that buying insurance is neither investing nor saving, but buying protection. You and your wife are still young enough to be able to buy the protection you will need at low cost. It is a bargain.

Take advantage of it now and get free to get your investment return from investing. SO AUS. JULY SEPT. Trackinj the Trends Can the individual investor still find happiness in tiie Barron's gives you the faefs, figures, insights you need fo decide. Bow Indices: Everyone's in Gear The Dow Theory, developed by Charles Dow at the turn of the century, works on the premise that the stock market is an excellent advance barometer of business activity.

Accordingly three representative lists were chosen by Dow to reflect industrial, transportation and engery activities of our nation. These are known presently as the Dow Jones Industrials, Transports and Utilities. It was felt by Dow that these indices should coincide in movement for any market trend to be valid. If one of the indices, primarily the industrials and transports, failed to confirm the other for instance a move to a new high there was cause for concern. Recent activities show all three indices in gear with each breaking through their July highs on'substantial volume.

This type of activity usually points to further upside potential for the intermediate term. Research staff, First of Michigan Corp. 1 rMV 4i Are you an active investor right now? Or are you still wrestling with the idea of getting back in the market? Whether you're enthusiastic or stocks, bonds or real estate. Now there are other possibilities: commodities, REITs, warrants, foreign nvestments-and many more. New Commodity: Moneybags So if you're confused or skeptical about your future as an investor, we say: Read Barron's every week, week in skeptical or hesitant about your future as an never needed Barron's more than now.

Why? Because Barron's provides, the market information and under "it too Gamm5 and week out. We promise you'll ind stories and articles in Barron's that can give you the confidence to face the market and make the decisions you have to make-in any economic climate. For a continuous source of stimulating investment ideas for today, subscribe to Barron's now. Get 13 weeks of Barron's for just $5.25 or one full year (52 issues) for only $21.00 plus the valuable "10 Rules For Investors" brochure as a free bonus. Mail the coupon below, today.

You never needed Barron's more than now. 1 BY DONALD E.L. JOHNSON Tht MO Financial Wiekly The International Monetary Market of the Chicago Mercantile Exchange is making another bid for the gambler's buck. On Oct. 1, the one-year-old home of eight currency futures markets will open trading in both U.S.

and Canadian silver coin' futures contracts. U.S. silver coins already are traded with only moderate success on the New York Mercantile Exchange. But the IMM is betting that its promotional skills and financial resources will enable it to become the prime futures market for silver coins. Just the news of the IMM's plans to open the markets drove the price of an IMM membership up more than $7,000 to over $16,000 in less than two months.

DEMAND for the. memberships came not only from speculators planning to trade for their own accounts, but also from brokerage firms with their eyes on what could be a substantial new source of commissions. Dr. Mark Powers, senior vice president, says he thinks the IMM's two new silver coin futures markets will broaden public interest in trading metals on all futures exchanges. He notes that when the Chicago Board of Trade opened its silver bullion "futures market in 1969 in cometition pithw the New York Commodity Exchange, (Comex), both exchanges profited.

Similarly, he says, introduction and promotion of the IMM markets should increase interest in the New York Merc's coin futures market as well as in the silver bullion markets bn the Board of Trade and Comex, all four exchanges should benefit, For one thing, traders will try to profit by betting on changing- price differentials between the four U.S. markets and the London silver bullion futures markets. At the same time, Chica-1 go-based brokers who have ignored the New York coin futures market will put customers into the IMM market, because they nave greater faith in its liquidity. This is important because many publicly oriented commodity brokerage firms belong to the two Chicago exchanges, but not the New York exchanges. Home office attitudes are reflected in branch offices.

The IMM's coin futures markets will hurt many of the coin dealers who have been misleading the public by tagging the word "exchange" to the ends of their names. To most investors, an exchange is a centralized market place where many buyers and sellers meet to trade openly and publicly. The Pacific Coast standing and objectivity that can help you make up your own mind about investing your own money. Week in and week out, Barron's staff works diligently and exhaustively to identify and pinpoint the elements that affect business in general as well as the stock market, real estate, bonds, commodities-indeed the full range of investment opportunities. In case after case, you'll find that Barron's is days, weeks, even months ahead of other news sources.

In every issue, we alert our readers to early investment situations -very often in advance of their full emer- gence. And, just as often, we sound early warning signals about investments that may be about to fade in potential. Barron's is written for the investor who makes up his own mind about his own money. Not only do we cover Wall Street, but we take a hard, clear-eyed look at Washington and the world. We focus on the investment implications in events that may seem, on casual examination, to have little to do with investments.

But the aware individual will see important and significant meanings that could make the difference between investment success and failure. Barron's covers a wide range of investment situations. Today, there are dozens of ways to put your capital to work. No longer is your choice limited to The Dow Jones Weekly Magazine for Investors 200 Burnett Road, Chicopee, Mass. 01021 Coin Exchange, however, is simply a coin retailery; Unlike a commodity exchange, such as the IMM or New York Merc, the Pacific Coast Coin Exchange does not publish its prices in the nation's financial pages.

IMM MEMBERS can expect speculators and investors in silver coins to use their facilities because buyers and sellers do not have to pay current high interest rates on the coins they buy or sell. More important for the bear, he can easily sell short orr the coin futures markets. Investors can sell coins back to coin dealers, but it is very difficult to buy from one dealer on margin and sell to another, because such a transaction involves the physical transfer of the coins. Selling short to a dealer is more trouble than it is worth. Investors also should have more confidence in trading on the IMM and New York Merc than with dealers because the Chicago and New York exchanges are well know, financially sub- stantial institutions.

Government regulation, hopefully, will soon be extended to the commodity futures markets, including metals not regulated by the Commodity Exchange Authority, aiding even more credibility to the operations of these Each IMM futures contract calls for the delivery of $5,000 worth of silver coins. The U.S. contract calls for the delivery of $5,000 face amount of dimes, quarters, or half-dollars contained in five canvas bags, each containing $1,000 face The coins must bear a minting date of 1964 or earlier. The Canadian contract's delivery unit is $5,000 face amount of Canadian dimes, quarters, or half dollars. The coins must bear a minting date of 1966 or earlier, except that an individual $1,000 bag may contain up to two percent 1967 or 1968 coins containing at least 50 percent silver.

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