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Where's the Peg
"Where's the peg?" is a common question among our waterfront
workers whether on the docks, in the hiring hail or almost anywhere they might
be. For instance when two longshoremen on vacation recently met on the Street in
London the first thing one asked the other was, "Joe, where's the
peg?" They both had a big laugh!
But lately a new question is starting to be heard. That is, "Where's the
Dow Jones?" Maybe not as often asked as the other old one. But since we
understand from press reports that over 40 percent of American households are
now stock market investors that must include some longshore households.
How well or poorly they may be doing, of course, we don't know. So we thought
a look at the market might be of interest. We, of course, are not high rollers
nor, least of all, market advisors, but we have learned some interesting facts
about the market from the daily press.
For instance, the long term return on stocks since 1 802 is 6.42 percent.
From 1802 to 1900 the average real return was 6.14 percent. From 1901 through
1998 the return was 6.64 percent. After 197 years neither the 19th nor the 20th
century returns varied from the long-term average by more than a quarter of 1
percent. That return is hardly likely to make an investor's heart beat faster.
Still, investors will be investors. While the return if you win may be better
than Las Vegas, where we understand most see gambling for what it is and expect
to lose anyway, the market is still a gamble in which the house still takes most
pots, as we learned in 1929 and 1998.
We have no tips. The best we can come up with is, "Save your
money!"
However, if you are in the market there is one other bit of advice from the
daily press. You are supposed to get proxy statements as required by the
Securities and Exchange Commission. You are advised to read them carefully. They
contain much inside information about what the particular corporations are
dishing out in the way of salaries of top executives, compensation programs for
executives and directors, legal matters that might affect the company, perks top
management gets. In other words just how much richer the rich are getting.
Along this line, another item from the local press points out that
productivity (output per worker hour) increased at a 5 percent annual rate for
last quarter, 1999. For all of 1999 productivity rose 2.9 percent, the largest
spurt of growth since a 4.1 percent gain in 1992. With some examination we can
see that the skyrocketing stock market has occurred at the same time as high
productivity. Obviously, productivity and rising stock prices are connected;
and, since productivity increases profits, there is more loose money to invest
in stocks and stocks go up. For instance, when the market was sluggish in 1973
and 1995, productivity was at a low 1.5 percentlow productivity, low profits,
low market and vice-versa.
Hence we can say that stock wealth comes out of the sweat of our brows. We
hope it doesn't just keep going until we have a sweat-drought. That warning
might fit into the " save the environment movement". Only this one
would have to be a "save the workers movement".
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