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Letter to the Editor
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This article originally appeared in the April 2004 Issue of INSIGHT

Beware the Ides of March?

This past month was not a great month for the stock market. The Dow was at a YTD low on March 15, when we prepared our stock chart. Was I feeling as wounded as Julius Caesar did on the Ides of March? I was unscathed but puzzled by the little step backward on Wall Street.

However, as I pen this column, only ten days later, the major market indices have notched their biggest percentage gains in several months. Watching stocks is NOT for the faint-hearted!

A survey showing that U.S. consumer sentiment unexpectedly rose in March helped reassure investors, me included. I am still fairly confident that the economy will do okay throughout 2004, as it traditionally does during the presidential campaign years.

I am breathing more easily, especially since one might think consumer sentiment might have been a bit on the drab, gloomy side, especially with the tribulations of Martha Stewart in the news.

Somewhat surprising to this investor this month is the news that ADP Claims Services Group and eAutoclaims have agreed to a joint marketing agreement (See page 6.). I will be interested in seeing where this goes.

Paint companies all were a bit bruised this month, with DuPont, PPG, and BASF stock prices off by about ten percent from January values, and Valspar, Akzo Nobel, and Sherwin-Williams each down a couple of percentage points YTD. The continuing careful watch on cost control measures at all our refinish paint manufacturers indicate to me that they will show small but steady improvement during the next several months.

Our insurer stocks had a more upbeat month. SAFECO did especially well in March, showing a twelve percent rise in its share price.

The Boyd Group’s price per share is up an even dollar since the start of this year. The Canada-based collision repair facility consolidator is certain to continue its careful purchase of shops in the U.S. market this year.

As a matter of fact, I am noticing that larger U.S. collision repair operations are beginning to look for acquisition opportunities again. After about a year or so of slower movement from consolidators, it is nice to see some action. I tend to attribute the new growth to better, more uniform quality control measures and head-office effectiveness.

Just so I can continue to read the financial pages in good health, answer me this: People never advised anyone to beware the Ides of April, did they?

-Charles Baker-

 

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