The Cavalier daily :: Friday, October 6, 1967 :: University of Virginia Library

News that the Federal Reserve would raise margin requirements
had an adverse effect on the stock market this past week, sending
the Dow Jones Industrial Average down seven points. The rumors
proved to be unfounded, however, as the Board took no action
at its regular Thursday meeting. Even if the 70% margin requirement
is raised in the near future, it will have no significant influence
on the market, due to its relatively small portion of the total value
of stocks. Market history has shown that a margin increase—even
as high as ninety or one hundred percent—could not halt a strong
bull market.

Positive features such as increased, industrial production, inventory
reductions through augmented sales, greater consumer demand for
luxury items, and increased home building far outweigh the negative
factors (proposed rise in income taxes, tight money, automobile
strike) surrounding the economy. In fact, most indicators seem to
suggest that our present bull market is on the verge of a tremendous
surge which could send the Dow Jones Industrial average near, and
possibly even through, the 1000 mark in the next few months. This
surge will be easily identifiable by heavy trading (10 million shares
or more daily) and large upward price movements with profit-taking
at a minimum.

In view of the favorable prospects envisioned, I suggest a fully
invested position, including the utilization of margin power. Investment
portfolio recommendations include RAYTHEON (91)
LITTON INDUSTRIES (105), INTERNATIONAL BUSINESS
MACHINES (549), and OCCIDENTAL PETROLEUM (80 1/2)

Speculative accounts should consider ITEK CORPORATION
(162), SPERRY RAND (45 3/4), CONTROL DATA (134 1/2),
SCIENTIFIC DATA SYSTEMS (119), and METRO—GOLDWYN-MAYER
(59 1/4).

For those who really have an itch to gamble, I recommend the
purchase of KALVAR CORPORATION (225), listed Over-the-Counter.
This is a thin issue (150,000 shares outstanding), which
rose from 35 to 264 within a six week period. Price fluctuations
of forty points in a single day are not at all uncommon for this
particular stock. The firm is engaged in the manufacturing of a
patented dry-process photocopying machine, which, unlike the Thermofax
and Xerox copiers, requires no chemicals or magnetic powder.
Instead, the Kalvar dry-copier works on light exposure by means
of electricity alone, and the resolution is excellent. This being by
far the most inexpensive method of film reproduction available,
and I feel that KALVAR has fantastic long term potential and
the short term trader might want to take advantage of the wide-ranged
price swings. Incidentally, the stock hit 800 in 1962.