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The article focuses on the complexity of income tax system to the general public of the U.S. The complexity tends to be useful to the politicians though it is inconvenient to the general public. Survey shows that the tax industry is the closest thing to recession-proof under the economy that was threatened by giant deficits, layoffs and protectionism. The tax industry also extends beyond the capital.

This article discusses the role of money managers in managing investment portfolios. Today there are 4,500 investment advisers who will handle money on a discretionary basis, up by 1,200 in two years. Further, it is worth noting that the managers typically take an annual fee of 0.5% to 2% of assets, depending on the size of the account. brokerage commissions. Some of the mangers earn back these costs by consistently beating the market averages. It is important to minimize the risk the manager takes to get his results.

The article presents strategies to convince clients to be rational investors and guard them against wrong timing with securities trading in the face of market declines. Topics include the overwhelming emotions associated with plunging share prices, "The Intelligent Investor" book by Benjamin Graham as well as the usual sell bandwagon attitude with stock market price cuts. Also mentioned are the need to buy cheap stocks and focus on yield data as with Standard and Poors (S&P) 500 index.

This article analyzes the performance of several closed-end funds such as Equitex Inc. and Texas-based Capital Southwest Corp. and discusses what to look for when choosing venture capital funds. Equitex bills itself as a business development company. In reality, it owns a hodgepodge of penny stocks, many of them products of the underwriting mill of junk stock promoter Blinder Robinson & Co. Unlike most closed-ends, Capital Southwest pays capital gains taxes for its shareholders. So it can meet future tax bills; the fund deducts the deferred taxes on unrealized gains when it publishes its net asset value. Capital Southwest's peculiar accounting understates the fund's performance.

The article stresses that the best way to choose a mutual fund which is likely to succeed is to find out who is running the fund. Investors should look for newer no-load or low-load funds run by money managers who have produced excellent results with other mutual funds or with their private accounts. CDA Investment Technologies has put together five-year performance of new mutual funds. Reich & Tang is near the top of the five-year CDA ranking. Investors wishing to open a private account at Reich & Tang need $20 million.

The article focuses on the stock trading strategy of Donald Yacktman, an investment advisor. Yacktman looks for companies that are cheap in relation to disposable cash flow. Valuing companies at a multiple of free cash flow is a popular tool of analysis these days but one often misapplied. In one version applauded in a business journal, you subtract dividends as well as capital replacement costs to get free cash flow. Such a deduction makes the preposterous assumption that a company generating $1 a share in excess cash per year would become worthless if it declared a $1 dividend.

This article presents information on the selection of mutual fund. It is informed that one needs to take a look at the past record of the fund's performance. While a good record doesn't assure good future results, it is still the best guide one knows of. But to make sure past performance isn't misleading, one needs to look at how the fund performed in both bull markets and bear. That's where the Forbes mutual fund rating system comes in. Stock and balanced funds that get a good down-market rating did well in the three bear markets since November 1980. Similarly, funds with a high up-market rating beat the averages during the three most recent bull markets. INSET: How Forbes rates funds (in both the bull and bear markets)..

This article reports that the 1838 Bond-Debenture Trading Fund is a closed-end recently trading at 20. For years it paid out $2 a year unfailingly. But the dividend was cut to $1.86 in 1987, and this year it's likely to come down another 4 cents. Robert Vitale, a softspoken 59-year-old who manages the portfolio, is apologetic about this new development. But, in spite of the pressures on him, Vitale has done pretty well for his shareholders. The portfolio's total return is excellent. The 1838 Fund's total return has averaged 12.5 percent a year compounded over the past decade, after expenses.

This article reports that Houston money manager Ronald Olin tries to find closed-ends whose discounts are almost certain to shrink. Olin likes to buy some of the newer closed-ends that have provisions for reducing the discount or converting into open-end funds. That way, investors can get out of the fund at, or close to, net asset value. It is informed that Olin has been applying notions like probability and optimization to closed-ends. He compares the published discounts in the newspapers with his own calculation of a fund's "fair value," which takes into account things like leverage, a fund's expense ratio and provisions for liquidation or open-ending.

This article presents information on Dodge & Cox Stock Fund, a mutual fund. It is informed that over the last three market cycles, Dodge & Cox Stock Fund--a smallish, $100 million fund that acts as a showcase for the firm's pension fund business--has averaged a compound annual 16.4 percent, versus 14.8 percent for the S&P 500. Its three funds--a stock, a balanced and a bond fund--have combined assets of just $170 million. In an age when giant Fidelity Investments operates a round-the-clock telephone bank, Dodge & Cox forbids phone switching among its funds and has no toll-free number.

This article reports that Richard Carney's small-company fund, GIT Equity Trust Special Growth, isn't tearing up the track. It hasn't quite tied the S&P 500 over the last five years and it has only $20 million in assets. It is informed that Carney's fund specializes in the stocks of small companies, companies whose total stock market valuation is relatively low. He is one of the few of this breed who have even kept close to the broad market averages. His no-load fund has returned 19 percent a year over the last five years, versus 20 percent for the S&P 500.

The article focuses on Fidelity Magellan Fund portfolio manager Peter Lynch, who is also the author of "One Up on Wall Street." The book provides yet another chance for the business media to lavish praise on Lynch, who has the best ten-year record in the mutual fund industry and manages its fourth largest fund. For Lynch and his employer, the book's payoff isn't just the $3 or so in royalties on each $19.95 hardcover. From 1977 to 1983, when Lynch had his most spectacular results, the fund's average annual turnover was greater than 230%. Lynch has taken to buying more liquid, larger-capitalization stocks.

This article discusses issues related to the Hutton Investment Series Growth Fund, the Dodge and Cox Stock Fund. The Hutton Investment Series Growth Fund has under-performed the market over the last five years. The Forbes rating system gives it a C for bull markets and a C for bear markets. The managers of the Dodge and Cox Stock Fund tend to buy and hold. In the most recent quarter they added Moore Corp. Ltd. to the portfolio of 52 stocks and tendered a position in Payless Cashways but did not do much else. Watching and waiting has certainly paid off for investors in the $705 million Sequoia Fund, where turnover has averaged 30% a year over the past decade.

The article focuses on O. Mason Hawkins, president of Southeastern Asset Management Inc. as he uses generally accepted accounting principles (GAAP) for the company. He concentrates his analysis on some 500 companies that have both a market value above $500 million and at least a 14% return on capital. His success comes from nothing more exciting than poring over the financial statements of the 500 companies.

The article reports on the issues related to the increasing tax penalties for business enterprises in the U.S. In 1987, the Internal Revenue Service has charged taxpayers with a total of 27 million in penalties. The causes of penalties include negligence, substantial understatement of income tax liability, fraud, as well as the failure to provide the correct taxpayer identification number.

The article reports on the status of the U.S. surface transportation industry in 1987. Topics discussed include impact of the industry's decision to reduce rates on company earnings, factors that influenced the financial performance of the industry as a whole and steps taken by railroads to cope with declining profits. Also discussed are the profitability and growth performance of individual companies, such as railroads Norfolk Southern and American Standard and trucking firm Carolina Freight. INSET: In the passing lane.

The article reports on Fred Wolferman's signature gourmet English muffins in the U.S. Wolferman's Inc. began taking off in 1977, when a tiny advertisement in "Bon Appetit" magazine pulled in 1,000 responses for muffins. Aside from Wolferman's high quality products, one factor that made the company successful is the advertisements they produce which stress how his products are made with care.

The article focuses on the development of L.B. Foster Co., the Pittsburgh, Pennsylvania-based oil service firm, after it was acquired and being managed by private equity Kohlberg Kravis Roberts & Co.(KKR). L.B. Foster Co. was founded in 1902 as a railway track recycler. In 1977, KKR acquired L.B. Foster Co. through a leveraged buyout (LBO), taking over the company that had evolved into a distributor and manufacturer of construction, rail and tubular products.

The article discusses the booming business of automobile leasing and some of the deals being advertised to potential customers as of July 1987. Topics include an overview of the industry, the importance of understanding the fine print on most of automobile leasing dealerships, and the kinds of leases. Also mentioned are Creative Leasing president Fred Palmer, Blair Behringer, and Franklin Equity Leasing president Louis Goldring.

The article reports on the job market changes occurring in large corporations in the U.S. It provides information the flow of American business and companies that survive changes through the years. It provides information on large firms that are laying off employees and the economy that has increased 12 million jobs in the past six years.

The article focuses on a section of the new tax reform act in the U.S., which will make it more difficult than ever for many companies to shed redundant executives. In its frenzy to replace revenues lost through lower tax rates, the U.S. Congress took an ax to the maximum benefits that so-called qualified defined benefit pension plans can pay to employees who take early retirement. The reductions are projected to add $4.5 billion to federal coffers over the next five years. But at a cost to the economy. The new law cuts the maximum benefit to $72,000 for retirement at 62, an $18,000-a-year cut. Go fishing at 50, and the top benefit is cut from $51,200 to $27,700. Those figures assume the employee was born in 1937 or earlier. For those born after, benefits are progressively less.

The article focuses on the financial status of Century Shares Trust Co., a no-load insurance sector fund based in Boston, Massachusetts. Century Shares has returned over 18% a year during the three stock market cycles since November 1980, versus less than 16% for the S&P 500. Its expense ratio is just 0.9%-a little more than half the average for equity funds. An insurance company typically loses money on its insurance underwriting but makes up for that by investing the premiums it takes in. Fund manager Allan Fulkerson, has put together his fine record by buying insurers with high returns on equity. He analyzes a company's return on equity in two parts: book value growth and dividends.

The article profiles Manhattan, New York City-based hedge fund Paloma Partners head S. Donald Sussman. Sussman's clients inlude McKinsey & Co. partners, Hollywood executives and the Mellon family and the Tisch family. He runs his hedge fund with modern portfolio theory and arbitrages price discrepancies between related financial instruments.

This article focuses on the efforts of the U.S. Securities and Exchange Commission (SEC) to educate investors of mutual fund fees. All prospectuses must now include a table that discloses the cost of a $1,000 investment over one, three, five and ten years, presuming a 5% annual return on the portfolio. There's just one little problem with the table. It has a mathematical quirk that makes the fee table in one prospectus not comparable with another. A 5% back-end load looks worse in the SEC table than a 5% front-end load, even though they have the same effect on investor's investment result.

This article discusses issues related to the brokerage industry in the U.S. Most brokers ask customers to sign agreements sending disputes to arbitration, thereby eliminating aggrieved customers' rights to jury trials and curtailing the chances for punitive damages and appeals. It's no surprise that investors think the current system is stacked against them. Under New York Stock Exchange rules, three arbitrators are selected by the exchange, one from Wall Street and two ostensibly from the "general public."

The article assesses on the efficacy of unit trust in relation to its application to equities. According to the author, the concept of unit trust which becomes a big marketing success in bond funds does not look so brilliant when applied to equities. He cites that Shearson Lehman Hutton Inc. is the biggest marketer of equity unit trusts with over $1 billion of unit trusts since 1982.

The article reports that efficient market theorists would have one believe that it's impossible to beat the market consistently and that people who do come out ahead are just lucky. A book could be written about why that theory is wrong, but the article lists a handful of apparent counter examples. The prime one is to reinvest in a bond or a stock with discount offerings. The other one can be providing economical funds to investors.

The article reports on the decision of a district court in the U.S. derailing the sale of the Pittsburgh & Lake Erie Railroad Co. (P&LE). The decision has caused the five-year boom in regional railroads to a stop. The P&LE is already planning to petition the Supreme Court to get the Third Circuit Court decision overturned.

The article discusses the company profile of the investment management company Vanguard Group which was also known for their efficient funds in 1987, and mentions topics that include the company history of the Vanguard Group and the profile of Vanguard Group's head John Bogle.

The article reports that gold trader Ross Rowland left the Commodity Exchange in New York to work in the Chicago Mercantile Exchange or the Merc in Chicago, Illinois in 1987, wherein Rowland believed that the computerized trade recording system of the Merc could help him in doing his business.

The article reports on how some coupon marketers in the U.S. are using carefully targeted coupons to pitch their clients' products directly at the customers of those customers' toughest competitors. One such marketer is Long Island, New York-based Precision Target Marketing whose customers include Bausch and Lomb, Benihana Frozen Foods and Burker King.

The article focuses on prevention of financial risk and dimensions involved in investment strategy. It mentions about the loss in stocks as measured by the Nasdaq Composite Index. It states that the chance of greater success comes a risk of devastating failure and mentions about the retirement and the failure option.