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Cedar Rapids Gazette (Newspaper) - December 23, 1974, Cedar Rapids, Iowa The Cedar Rapids Gazelle: Won., Dec. 2J, The Investor's Guide By Shilsky Q I wu referred to yM by i broker li Mr town Information on a half dozen companies in which I would like to speculate. What can you tell me about these companies? A That's a slifl-off If I've ever heard tut. You have a perfect right to speculate in these stocks. But since the broker is going to make the commissions, I don't see why he shouldn't furnish you the background Information you seek (and should have) either In the form of the Stand- ard and Poor's "yellow sheets" or of analyses from his own research department. In any event, I would not present data on highly specula- tive companies here for fear it would be taken as a recom- mendation something which I have no intention of offering. Make this broker expend a little effort for his commis- sions. Q I have la savings, all which my husband wants to put into AT and T stock. He is 53 and plans to retire in four years. I'm reluctant to take all my savings out of the bank. so would 1 be. I don't knew your complete picture, but I wouldn't view a smaller investment in AT and T as too dangerous. Q 1 am sitting tight with my stocks all B-plus or A because even though they are lower in price, I like those nice dividends, and I don't want to miss the next bull market. Am I right? A Common stock dividends, as I have tried to point out here many times, arc not based on contract. They can be in- creased, eliminated or reduced the latter of which just happened to your General Motors stock. The same may happen with your two high-yielding utility commons al- though I make no predications. The high-quality preferreds, of course, do offer a fixed dividend and I see no threat to these. The market price of the preferrcds will improve only if Interest rates continue to de- cline. So, with this caveat as to those "nice (common) divi- I think you are right in holding on. Q How may uc transfer stock wilioat going throigh a broker, lawyer or bank? A YM doi't iced a lawyer, and yon need not ise a broker but since the bank acts as transfer agent (and I assume you do want the stock registered in your name) you will have to go through the bank. Q I appreciate the high yields obtainable from the many recently-created money funds dealing in treasuries, certificates of deposit, commercial paper, etc., but what are the disadvantages? A The Income will vary with the frequent changes In the money market. If interest rates fall, you must expect these funds' returns to decline. Secondly safety, of course, depends upon the strength of the banks they lend money to and of the corporations whose paper they buy. Q We retained from abroad to find letters saying that a foreign group was offering to buy an Indian Head stock. But, by the time we returned, the offer had been terminated. Now we can find nothing on the stock or on the convertible debentures, which we also own. A There bave been quite a lew letters on this matter In recent weeks. Both the Indian Head convertible debentures and the common are very much alive the common, traded over the counter at a recent quote of is still receiving the dividend and the convertible debentures, also traded over the counter, are quoted 47-57, are receiving interest pay- ments, and are still convertible into common. It's true you've lost exchange listing which often means lessened liquidity, especially since the buyers ac- quired about 90 percent of the common on their tender offer. Best Oil-Gas Tax BRlDGEShelter Remains By Oswald James Jacoby Jim: "As you have told me many times, greed is a terri- ble thing." Oswald: "I suppose you have an example for me." Jim: "The game was rub- ber bridge. East's king of spades held the first trick and lie led buck the ten to dum- NORTH (D) f KQ104 4 AJ7 WEST EAST Q.I 73 f 962 8753 1086 K92 8 5 4 K 7 3 SOUTH 4 9865 tAJ Q543 J96 North-South vulnerable West North 3N.T. East Pass Pass Pass Pass Opening 3 South 1N.T. Pass Mr. Shulskv welcomes written questions, but he will be oble to provide answers only throuoh the column. For Information on corporate and tax-exempt bonds, please Include o self-addressed, stamped envelope. Address your requests to Sam Shulsky, care of The Gazette. Gauging National Parlousity By Dick West WASHINGTON (UPI) Folks once relied on supersti- tions, such as Friday the 13th, to pinpoint ominous periods. Today that service is per- formed by government index- es. We have the Cost of Living Index to show when we are threatened by inflation. The Air Pollution Index appraises our chances of breathing. Plus other examples too numerous to mention. The trouble with this system is its lack of correla- tion. One must look here and there, to this indicator and that, to ascertain his relative degree of vulnerability. Balance Readings If the government were run right, it would assemble all the statistical gauges, balance one reading against the other Group Plans To Harass Whale Boats SEATTLE (UPI) A group of environmentalists plans to use special inflatable outboard boats to harass Japanese and Russian whalers in the Pacific this spring while at the same lime beaming live music played by celebrity perform- ers to attract the giant mam- mals and protect them. Bob Hunter, a Vancouver, B. C., columnisl and eoordina- lor of the movement, said the group will operate from an 80- foot converted halibut seiner. Hunter said his group will use inflatable boats to "place themselves between whalers' chaser boats and the whales so they won't be shol at." Meanwhile, the mother ship will be sending to the whales live music played by perform- ers Joan Baez, David Crosby and Graham Nash, Hunter said. "We've worked out a spe- cial sound system to do he explained. "Scientists have found that tjie communication language of whales is Very much like our own music. By beaming music at them we can hopefully attract whales to the boat and protccl them from whalers." Hunter said the boat, the Greenpeace V will sail from Vancouver in early spring and the group plans to harass the whalers from Oregon in the south to the Aleutian Islands in the North. Joan Mclntyre, president of an international group pro- moting a 10-year moratorium on the killing of whales, said five of the eight spedes of great whales arc considered commercially extinct and the sperm whale "Is in great dan- ger." She said the whales arc slaughtered for uses I hnl are trivial, unnecessary and luxurious." Dick West and come up with a single Federal Parlousity Index. We could look in the paper each day and there it would be an all-inclusive calculation of how parlous the limes are. Twenty years ago, an index showing the relative degree of parlousness probably wouldn't have been technologically possible. But in Ihese days of wonder-working compulers, the FPI would be easy to es- tablish. BIG GEORGE! Data programmers would simply feed into a computer the Dow Jones Stock Aver- ages, weather reports, unem- ployment figures, Arab oil prices, the rag weed pollen count, Henry Kissinger's itin- erary and the scores of other factors that affect our well being. Single Unit These figures would be compressed into a single unit and calibrated on a scale of zero to 100. The upper end of the index would approximate some peri- od say the "Black Friday" stock market crash or Pearl Harbor day when limes were exceedingly parlous. If the index registered as high as 95.2, it would be like the stock market crash corn- ing on Dec. 7, 1941. That leaves the lower end to equate periods of exceptional salubrity. Should the index ever drop to 2.7 or lower, it would be like your birthday, Christmas and National Safe Boating week all rolled into one. Labor Contracts As wages in some industries are adjusted according to the Cost of Living Index, labor contracts also could be tied to the Federal Parlousity Index. Any time the FPI rose as much as five points, the equiv- alent of Friday the 13th, workers covered by the contract would stay home in bed on the premise that this would be one of those days when it wouldn't pay to get up. Persons not covered by the contract would have to turn to each other for moral support. I recommend joining hands and singing "Help Me Make It Through the my's ace. South came to his hand with the ace of hearts; led the nine of clubs and let it ride." Oswald: "Was East smart enough to take his king and lead back a Jim: "He certainly was and Smith fell for it like a ton of bricks. He cashed the hearts and clubs while stopping in his hand. It became apparent to him that East did not have another spade so it would be perfectly safe to take a dia- mond finesse and score an ov- erlriek. He took the finesse and the hand collapsed." Oswald: "I would not really blame South if the game had been match point duplicate. That overtrick would have been important, but at rubber bridge he had no right to risk his contract. Who was Jim: "A very bad player. It turned out that the reason he had not led the deuce of spades the first time was that he had not seen it." L2 The bidding has been: '23 West North East South Virgil Partch "This year I'll take anything you've-got and no questions asked." Says Canadian Influenced Rocky WATERLOO, Ont. (AP) A Canadian prime minister's influence in the first half of the century on the Rockefeller family may have a direct link with the nomination of Nelson Rockefeller as vice-president of the U. S., a Concordia pro- fessor says. The late prime minister MacKenzie King served as an adviser to the Rockefeller family from 1914 to 1919 and during the same period the family modified its stance on social and labor relations, said S. J. Scheinberg. He said the result was the change in public attitude to- ward the Rockefellers that opened the way for Nelson Rockefeller to become vice- president. Police Place Mousey Doper On Wonfed List SAN JOSE, Calif. (UPI) Narcotics officers said they found a mouse living in a bag of marijuana, but it escaped into a long row of boxes full of hashish, cocaine and other confiscated drugs. "He was last seen south- bound on the said Sgt. Sherman Boone. Joining police in the search for the mouse named Marty, was Dr. Ronald Siegel, a fel- low in psychppharmacology at UCLA. Siegel said he wanted to catch Marty in the name of science. "We'd like to take sonic blood and urine samples from him to determine exactly what his diet has Siegel said. Officer Jim McKay said the mouse has been on the wanted list for three months and lias been chomping at nearly ev- erything in the evidence room. "You name it and lie's tried said McKay. "We are afraid he will be strung out." You, South, hold: 7643 732 What do you do now: one club. This is the one exception to the rule that you bid the higher ranking of two five-card suits first. TODAY'S QUESTION You bid one club and your partner bids one diamond. What do you do now? Answer Tomorrow Medals to 'Hanoi Hilton' Escapee SAN DIEGO (UPI) Lt. Cmdr. Georg Coker, one of the few American fliers to escape from a North Vietnamese pri- soner of war camp, has been awarded the Navy Cross, the highest navy award for hero- ism. Coker, 31, was also awarded the Silver Star, Bronze Star, Legion of Merit and Navy Commendation Medal in a ceremony at North Island Na- val Air Station. Coker broke out of the "Ha- noi Hilton" but was recap- tured the next day and placed in solaritary confinement for 2% years. He and nine other POWs put in solitary for disrupting pri- son life named themselves the "Alcatraz gang." The medals were presented by Hear Adin. James Stockdale, Coker's commanding officer, also a member of the "gang." By Sylvia Porter NEW YORK If you're In the income bracket where .you're looking for tax shelters and hundreds of thousands of lucky Americans arc even in this wretched era this is the time of the year when you make your final moves, par- ticularly on oil and gas invest- ments. Of the several reasons for this year-end tax strategy, three are of key significance: (1) By now, you know almost to the penny how much in- come you will have that needs shelter; (2) by delaying your investment, you have had use of your money throughout the year without any loss in the benefits of the shelter; and (3) oil and gas investments have appeal toward year-end be- cause often there is a chance for a very substantial write- off, even though most of the drilling will be done the fol- lowing year. While it's not always wise to wait until year-end, it's tradi- tional. Future Outlook Does this still hold true in 1974? Yes even though there is a good chance that in 1975 con- gress will start to phase out the much debated and criti- cized oil depletion allowance. This legislation seems to be aimed at giants in the field, although, says Eli Warach, a specialist in this field, "kayo- ing depletion would knock out many small, independent oil and gas producers and hurt the independents much more severely than the big compa- nies." But what if congress does eliminate the depletion allow- ance next year? Would this mean that oil and gas ven- tures no longer would be at- tractive to private investors? Not at all. Biggest Advantage The single biggest tax ad- vantage for the individual investor is not the widely pub- licized depiction allowance. It is the intangible drilling-cost deduction which permits you, the investor, to take a tax de- duction for a big portion of your original investment in the year you put up the mon- ey. That deduction often runs as much as 80 percent, or even more, of the investment. And elimination of this deduc- tion isn't even being discussed in congress. If you arc considering a year-end deal: Be extremely careful. Check whether you are getting in on a good venture, not being of- fered the lag end of a bad deal just to tempt you to get in un- der the wire. Ask whether you will qualify for a writeoff on your investment. Ask how much of the money you invest "I'll bet when you were a kid you didn't have to share a hair- dryer wilh your sisler." Sylvia Porter will be spent looking for oil and how much for overhead for obviously, what goes into the promoler's pockets isn't available to bring you any profit. Never forget that your prime aim in investing in oil and gas is to make a profit not to get the tax breaks. In- vest in these ventures as you invest in anything else and Ireat Ihe lax breaks only as an added incenlivc. If you're looking only for a lax writeoff, you'd be belter off making a gifl to your favorite charity and be a lot nicer person, too. Of course, the tax shelters offered by oil and gas invest- ments are impressive, and since their objeclive is to fur- ther oil exploration and devel- opment, the tax laws for many years have gone a long way lo bring Ihe after-lax risks in line wilh those of other ven- lurcs. For instance, the intangible drilling cost deduction gener- ally refers to materials and other direct and indirect costs which go into the drilling of a well and do not create assets having salvage value remain- ing after Ihe well's complc- lion. In other industries, such costs as these would have to be capitalized and would be recoverable only through de- preciation. Not so in oil. Here, you have the right to deduct these costs currently from your oil or other highly taxed income. To make sure yon get this valuable writeoff, check whether the oil company has entered into a contract with the driller that requires pay- ment to the driller Ihis year, even though the actual drilling slarls nexl year. Be certain the driller takes action this year to get Ihe leases he needs and lo arrange for rigs and Diner essential equipment. Re- liable oil men will be glad to tell you the facts. Note too your other lax breaks. One is depreciation. Of the costs of the well re- maining after intangible drill- ing costs, a big part would go for assets, such as derricks, tanks, buildings, the like. These are subject to deprecia- tion deductions. And then, there's still percentage deple- lion, which allows you to re- cover your cost of Ihe well and more. For under Ihis, you can deduct and save from tax- ation 22 percent of gross in- come from the well. And the key point remains: Whatever congress does lo modify other tax shelters on oil and gas in 1975, so far it hasn't even whispered a threat to Ihe mosl valuable break of all. For Better Health Double Check fhe Safety Of Toys Given Children By Dr. S.L. Andclmun If you slill have some lasl-minute Christmas shopping to do or if you have children to buy for during Ihe year lei me offer some hints on toys for kids. These suggestions were brought to my allenlion by a spokesman for the National Easter Seal Sociely, a group which devotes great energy to rehabilitating handicapped children and wanted to be sure no one joins Ihe ranks of (he disabled because of a toy. sure your child is old enough or sophisticated enough for the loy you choose. Don't get a 7-year-old a bow and arrow or a preschooler a chemistry set. Sharp Edges out for rough or sharp edges on toys, and for toddlers' toys that come apart easily wilh liny wheels or oilier objects that could go into tiie mouth. Don't give a baby a toy unless it's loo big lo fil into his mouth and nonbreaka- ble. Sharp edges can do tremendous damage lo the eyes or ears. prepared to give your child some safely tips on the use of his new toys. If you're giving a bike, put a book on biking rules in the basket and go over Ihe rules with your child. an older child gets a hunting rifle, a bow and arrow or a dart game, be sure he understands how to use it safely and be sure he stays oul of reach of younger children. Check Toys all electric toys to be sure that both the cord and the toy itself have the UL (Underwriters Laboratory) ap- proval. If not, don't buy it. to see that toys are lead-free and aren't painted with lead-base paints. Few of these items are still on (lie market, but lead poisoning is so serious that it's best to check. you are buying for a handicapped child, be sure the toy is something he can enjoy or can learn lo enjoy. For fu- ture reference, you may wish to order one of Ihese booklets: "Toys, Games and Apparatus for Children with Cerebral Palsy" and "Your Child's They are available from Easter Seals, 2023 W. Ogden Ave., Chicago, 111. 60612 at 25 cents each. Happy shopping! Dr. Andelman welcomes letters outlining problems he may discuss in future columns. He regrets, however, he cannot personally answer mall. Write lo him in care of The Gazette. Hunters are looking for good buys in hunting gear sell yours wilh a classified ad! If you want the finest Points DAIFS FRESH FRUIT BASKETS THEY'RE I HE SWEETEST GIFTSI Heaping M Peck Hwpinjtt Puck.. Heaiiint Full Peck NOW ON DISPLAY! Many of our left-over 1974's On First Avenue at 3rd St. N.E. .6______ handlers 2nd at 8th St. S.E. 363-3521 Enjoy the best I Country Style CHICKEN DINNER TUESDAY and THURSDAY Everyone likes the big tender-tasty pieces ol chicken served up with whipped potatoes and country gravy, chilled tossed salad with your choice of Big Boy's own dressings or creamy fresh cole slaw and a golden dinner roll with butter REG. 1.95 CKen served up witn -m loes and country gravy, '-if >alad with your choice of M fMj Iressmgsor creamy fresh golden dinner roll with Soming iitm ipm Cotfoo Shop Only C Big Boy FAMILY RESTAURANTS 4801 First Ave. S.f. 115 Second Ave. S.t.
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