Tuesday, April 16, 2024
Miles from the Mainstream
D. R. ZUKERMAN, proprietor
When the Stock Market Speaks, Should We Listen?

JANUARY 22, 2006 --

The Dow Jones Industrial Average lost more than 200 point, last Friday, "erasing its gains for the year," quoting from a New York Times report, January 21.

The Times article, by Jad Mouad and Vikas Bajaj, blamed the sharp drop on crude oil prices that went above $68 a barrel and earnings reports from General Electric (this writer holds GE stock) and Citigroup, among others, that did not meet expectations.

Concerning gas prices at the pump, we motorists would be advised to keep a close watch on prices and drive accordingly. LPR was interested to see Sam Donaldson and Cokie Roberts back on ABC News' "This Week" January 22.

Alas, Mr. Donaldson was not helpful in predicting that we will be happy to have gas at $3 a gallon.

LPR noted that Mr. Donaldson also believes that the economy is not in good shape -- certainly not if another gas spike goes through the heart of the economy.

LPR believes that price of gas depends on our response to the gas spike, not on the musings of media correspondents like Mr. Donaldson.

LPR believes that reform -- change of heart -- in corporate suites would do wonders for the stock market, in particular, and the economy in general.



More and more, the media is taking notice of compensation given to corporation executives. NOW -- the public television program, noted among other things, January 20, that corporate execs, at some companies, make 400 times the wages of workers.

The New York Times, January 16, writing on Carl C. Icahn's attempt to shakeup Time Warner noted that the company's stock price has been "stagnant." This
writer, a Time Warner shareholder would note that the closing price, January 21 -- $17.07 is considerably lower than the $19..45 at the close of 2004.

For the past year, the Dow Jones industrial average has ricocheted roughly between 10,500 and 11,000. Perhaps "stagnant" better describes the Dow Jones performance, not the performance of a stock down more than 10 percent since January 1, 2005.

LPR would be interested how investors would react if business leaders committed themselves to the notion that compensation should reflect performance, not power over directors.

Indeed, LPR would be interested how the economy responded if business leaders agreed that service to the public, not preoccupation with bloated compensation, is good for business.