European Stars and Stripes (Newspaper) - June 10, 1992, Darmstadt, Hesse                                Page 18 a the stars and stripes wednesday june 10, 1992money matters by Chet Currier a business writer new York a in addition to watching the Federal Reserve Board Oil geopolitics and presidential election Campaign analysts tracking the Progress of lie Stock Market have been keeping an Eye on the Price of cornflakes. Depending on whom you listen to recent changes in the Price tags on Cereal boxes could be Token a healthier consumer Economy a or a Drift in sentiment among investors toward a troublesome degree of complacency. The starting Point for All this debate came in late May when the Kellogg co. Announced Price increases averaging 3.5 percent on its . Cereal brands. Shares of Kellogg and some of its competitors in the business of processing and marketing food responded with an immediate show of strength. David Goldman who follows the food Industry for Oppenh Cimer amp co., issued reports describing the Price increase As a Good news for food  crackle and Cereal prices studied for signs of recovery a brighter fundamentals and new investment Cycle signal major turn in group performance a one of his headlines proclaimed. At the same time others said it looked As though traders were grasping for excuses to keep the Market jumping. A investors showed their True 6lan when Kellogg a raised the Price of Corn flakes a said Michael Sherman at Shear son Lehman Brothers. A that momentous news set off a furious rally in food stocks. A get the picture Money is talking and investors Are becoming immune to worry. A so while the markets remain buoyant and fearless it is Well to remind ourselves that the present economic and interest rate environment is unlikely to persist for Long. The political and policy environment could undergo massive changes in the next six  for his part Goldman asserted that the Kellogg move a is Likely to signal a turning Point in the fundamental Outlook for the packaged food stocks a a formerly prosperous group that had fallen into neglect this year As investors turned their attention to cyclical Quot smokestack manufacturing companies. A the announced Price hike not Only exceeded expectations but More important suggests that the fundamental picture for the packaged food companies May have brightened a bit from the rather dour Outlook of the past six months a Goldman said. A we think it no coincidence that Kellogg a action comes on the heels of recent strength in the Oil markets because higher Oil prices signal a possible increase in the perceived inflation rate a he said. A the old adage has it that a Little inflation is Good for the packaged food  in Many ways it is hard to fault Market analysts for looking anywhere they can in search of some clue to where the Economy is headed. Every time the recovery from the recession appears to be gathering momentum it seems a new economic statistic comes along to cast doubt on those Hopes. That show things went in the past week As the labor department reported weaker than expected employment conditions for May and Stock prices wavered after touching a new High on monday. The Dow Jones average of 30 industrials closed Friday at 3,398.69, up 1.81 Points from the week before. Elsewhere the Nash a composite Index for the Over the counter Market edged up 0.12 to 585.43, and the american Stock Exchange Market value Index was up 2.47 at 397.16. A without Job growth the recovery will be weak a said Robert Brusca chief economist at Nikko securities International in new York. A if there is not Strong Job growth we will not see Strong spending. With personal savings rates Low Consumers need to earn More to spend  but for now anyway it appears the Job Market Hasni to shaken off the lingering effects of recession. That a a drag on the Outlook for stocks and Many other sectors of the Economy a maybe even the Cereal Market. Too Little heed paid to magic of compounding by John Cunniff the associated press new York a had one of your ancestors invested a Dollar in stocks Back in 1802, and had All subsequent heirs left it there to build you might now possess a portfolio with a real after tax value of $43,100. Such is the Power of compounding about which you will hear very Little today in a Market of relatively Short term thinkers a a Market in which anything Over six months is deemed by tax people to be Long term. The failure to appreciate the values inherent in the longer term May he one of the severest criticisms that can be made of popular investment thinking today in which a 50 percent return in one year May actually disappoint the illustration is hypothetical of course since no vehicle existed 190 years ago to invest in the total equities universe and chances Are that if forced to pick just a single Stock your ancestor might have chosen poorly. But the number in t one to be dismissed according to professor Jeremy Siegel of the Wharton school investors guide writing in the latest Issue of the a ii journal published by the american association of individual investors. In fact that $43,100 figure hardly conveys the full Power of compounding which begins slowly builds strength and then can overwhelm even the Taxman and inflation. The nominal value of that $1 investment would have been $955,000 in 1990, and its value after inflation but before taxes would have been $86,100. In arriving at real values Siegel wrung out inflation which at the consumer level averaged 1.3 percent from 1802 to 1990. Tiny As that seems it produced an eleven fold increase in prices still another lesson for today. While compounding can produce such spectacular results Given a certain amount of time it is hardly held in great favor by either investors or their brokers. Price movements arc watched in terms of Days or even hours rather than months or years. Daily Price changes Are headlined. Spectacular returns Are advertised loudly and the plunge that follows is hardly even mentioned. Meanwhile Small amounts left in Good stocks manage to weather the  and Downs of booms and busts growing slowly but without the dilution of broker commissions. The More they age the faster they grow thanks to compounding. Long term investing takes patience of course. And self denial courage persistence and maybe enough Luck to avoid crises that might Force the Money to be spent. But it takes More too a profound appreciation of its Power. One of the clearest illustrations of the latter is Likely to be provided by the answer to this seemingly simple question if you were offered a Job in which you would have your Choice of payments which would you choose 1 cent to be paid on Day one and compounded at 100 percent each Day for 30 Days or $5,000 paid in Advance the latter would appear to be a pretty Good Deal a sizable sum perhaps More than you re earning now and you get it up front whereas the latter seems niggardly and you a have to wait for it. But of course it would be Worth the wait a 10 000 times Worth. A More ways than one to Transfer Stock ownership. A b Bill Doyll is a stands for so find in the annual rennet to . A a by Bill Dom o my estate is very meager but i do have some Stock registered in my name. I am a widow. My daughter is my sole heir. What procedure do 1 adopt so that she will have Little problems cashing the Stock after my death Quot a there Are a number of methods you can use. A you can name her As your Only heir in your will. Then when you leave this Vale of tears she will inherit the Stock along with everything else you own and Stock ownership will he transferred to her. If you die intestate a without a will a and she is your Only heir she will also inherit the shares and ownership will be transferred to her. While you Are still alive you can have the Stock registered in your name and your daughter s name As joint tenants with right of survivor ship. By doing that she will become the sole owner after your passing. And there is a new method registering the Slock in a Transfer on death Tod form a a a your name Tod your daughters Nam subject to sea Iod  Sta stands for securities Transfer association the organization pushing the very sensible Tod movement. With Tod registration the Stock automatically becomes your daughters upon your death. The hang up Here is that to Date Only four slates have adopted legislation Doyle allowing the use or Tod registration. All states the District or Columbia and Canada Are expected to pass Tod Laws in reasonably Short order. However As we All know elected officials often drag their feet on worthwhile projects. Q How do i change he registration on stocks i own from my name alone to my name and an adult child a name or to the name of an adult child alone without paying Tat fees to lawyers or brokers a do it through each stocks Transfer agent whose name and address you will find in the annual report to stockholders. Acc you recover will pastor the Cost of till out the assignment form on the the surety Bond you would have to put up a Lnu Cas of certificate. Have your to obtain a replacement certificate. Q i am custodian for some securities signature guaranteed by a brokerage firm commercial Bank or Trust company. Deliver the certificate to the stocks Transfer agent. For safety a Sake do that either by hand or by registered mail return receipt requested. Your present certificate will be destroyed and a new certificate registered As you instructed will be sent to the address you indicated on the assignment form. Q i want to change the registered ownership on a Stock i own by sending the certificate to the Transfer agent. But insuring the mailing for the value of the Stock would be quite expensive.  certified mail which is much loss costly be an alternative a sure. But certified mail is not insured. You can lick most of the Cost problem by insuring the registered mail for 4 percent of the current Market value of the Slock. In the unlikely event your registered letter is lost in the malt the insurer my granddaughter age 13, under the Gilt to minors act. What happens should i die before she reaches the age of majority which is 21 in our state a in that situation the minors guardian would become successor custodian. Assuming your granddaughter is living with her parents her father or Mother would assume Custodianship of those securities. When the minor has no guardian the appropriate court will designate one. The name of the court varies from state to state. Check that out at your county courthouse. The registration of Stock ownership will be changed from a a your name As custodian for the child a name under the gift to minors act of your state a to a the new custodians name As custodian for  Doyle welcomes written questions by he can provide answers Only through the column. C King features Syndicate inc