Odd-Lot Stock Buyers Are Sticking With Rally
Odd-lot purchases and sales - those of less than 100 shares - are a measure of investing behavior by small-ticket, individual investors. Years ago, before the growth of institutional investing, the difference between odd-lot purchases and sales (or the ratio between the two numbers) was quoted widely as a market sentiment indicator.
The conventional wisdom was that the amateur investor is ill-informed. When he or she is buying, it’s time to sell. In fact, odd-lot traders have shown a remarkable skill at buying when stock prices dip and selling when stocks have rallied.
Normally, therefore, odd-lot data are not a contrary indicator, according to Stan Weinstein, editor and publisher of The Professional Tape Reader, a newsletter based in Hollywood, Fla.
But the data have value as a market indicator when individual investors abandon their normal pattern, he said.
“Historically, they should be selling this rally, but in recent weeks they’ve moved strongly to the buy side,” Weinstein said.”This psychological indicator confirms my feeling that it’s becoming late in the move.”
Attention, Wal-Mart shoppers
Stocks that sit around for a long time doing nothing tend to wake up. But Wal-Mart Stores Inc., $25 a year ago, has remained comatose.
It closed Friday at $24.75.
The company is the world’s largest retailer with 2,500 stores and $100 billion in sales. And while the United States is getting saturated, the company is moving into such markets as Brazil and China. Value Line says, “This good quality stock is timely.” In 1993, it was $33; since then, profits have risen 50 percent but the price has dropped 25 percent.
Car insurance brochure offered
The Washington Insurance Council is offering state consumers a free brochure with information about how insurers set their rates.
“Auto Insurance - What Drives the Costs and What Can Be Done About It” provides statistics and other facts about such topics as drunk driving, theft, seat belts and fraud.
Copies can be obtained by calling 1-800-664-4942 in the state of Washington, or writing WIC at: 1904 Third Ave.; Suite 925; Seattle, WA.; 98101-1123.
Nothing labored here
Labor Day message: Manufactured Home Communities, a real estate investment trust controlled by Chicago financier Sam Zell, takes the prize for candor in personnel relations and corporate communications. Here are the first two sentences from a press release the company issued a week ago: “Manufactured Homes Communities Inc. today announced that Barry McCabe, executive vice president and chief operating officer, has left the company to pursue other business opportunities. Mr. McCabe’s departure reflects the company’s commitment to reduce expenses and position itself for further growth.”
Equities get more 401(k) funds
Users of company-sponsored retirement plans are increasing the share of their investments put in stocks and stock mutual funds.
At the end of 1994, the most recent year for which information is available, half of the $523 billion in 401(k) plans was in equities, up from 43 percent in 1990.
, DataTimes