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Don't Be Fooled By Market Mumbo Jumbo

November 19, 1989

Who says newspaper editors don't have a sense of humor! The lead article of your business section asks rhetorically, "Are Stocks for Gamblers Only?" (Oct. 22).

Your apologist gives a convoluted answer, saying that for the last 62 years stock investments yielded a higher total return than all other investments. This argument ignores a basic consideration stated in every mutual fund's portfolio: Past performance is never a guarantee of future success.

Bill Sing supports his argument with phony statistics used by stockbrokers to lure customers: "low annual average volatility" of the market. This is a deceptive concept bordering on fraud and is a completely meaningless figure.

Then on your third page, guest columnist Martin Mayer really answers the question about gamblers: The market is manipulated by a pack of speculators, swindlers, arbitragers and other assorted crooks, while the SEC idly watches as the laws are broken left and right.

Mayer's article answers Sing's question more realistically: Unless the SEC cleans out the den of thieves on Wall Street, no statistical mumbo jumbo will lure back the individual investors.

A. D. BORONKAY

SANTA ANA

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