HOW TO PROFIT FROM THE COMING BULL MARKET

A brokerage-house executive--who acknowledges his bias--examines virtually all the factors that could prevent a stock-market upturn (a shrinking shareholder census, inflation, high interest rates, etc.); and then rebuts them. Thus, Ansbacher contends that the defection of five million investors during the 1970s was a consequence rather than a cause of falling stock prices. Now, moreover, stocks are in the ""strong hands"" of roughly 20 million case-hardened tape watchers; their ranks could expand apace, once supply/demand pressures put prices on an upward track. For instance, institutions whose quarterly income aggregates $30 billion are only about 50 percent invested in common stocks, a level well below historic norms; likewise, equities account for only 20 percent of individuals' personal assets, against 43 percent in 1965. Less convincing perhaps is the contention that the public overestimates the impact of inflation. Industry pricing policies invariably allow for increases, Ansbacher observes, and every one percent rise in the CPI reduces liabilities by a like amount. Returning to somewhat safer ground, he ticks off three indications that professionals, at least, believe common stocks are a bargain: takeovers at premium prices; purchases by companies of their own shares, frequently below book values; and a trend to go private (as opposed to public) or to liquidate to realize the full worth of corporate assets. Also important is burgeoning demand from foreign interests seeking commitments in a stable free-enterprise economy. Ansbacher cites numerous examples to support his stand and even offers a mini-portfolio of get-rich-slowly stocks. An instructive position paper challenging today's conventional market wisdom.