Bothered Bull

Biggs sparks some selling

Wall Street's bull market suffered a temporary setback last Monday, when the Dow Jones industrial average plunged 21.87 points, its steepest slide in almost two months. Later in the week, though, the market charged back smartly and closed at 1232.59, another record high. The short-lived sell-off was sparked by Barton Biggs, 50, chief portfolio strategist for Morgan Stanley & Co., the Manhattan investment banking firm that handles $7 billion in investments for clients, including about $5 billion from Kuwait. During a routine Monday-morning planning session, the gist of which was flashed to Morgan's clients, Biggs said he was becoming a little wary about the market. "I am inclined to be considerably more cautious about fresh buying," says Biggs.

A ruddy-faced Yankee who looks as if he stepped out of a John Cheever story, Biggs has a bachelor's degree from Yale and an M.B.A. from New York University. The market watcher keeps in shape for the intense Wall Street action by pumping a bicycle at the Morgan Stanley gym for up to 45 minutes at a time. He believes that an investment manager's most important product is his judgment, and he hones his by reading voraciously, and not just technical journals. Two recent and related devourings: Peter the Great by Robert Massie and The 900 Days, Harrison Salisbury's account of the World War II siege of Leningrad. Last February, Biggs' weekly stock-market analysis included a quote from British Philosopher John Locke's An Essay Concerning Human Understanding: "He that judges without informing himself to the utmost that he is capable, cannot acquit himself of judging amiss."

Biggs' judgment has not often been amiss. Last July he was one of a handful of Wall Streeters predicting that the Dow would break 1000 by year's end. It reached a high of 1070.55 on Dec. 27.

Right now Biggs is particularly concerned about the headlong rush to high-tech stocks. He calls this "classic overspeculation," yet he is not bearish about the overall market trend. He foresees some degree of correc ion, but not the 10% to 15% anticipated by many of his Wall Street colleagues. He still strongly favors blue-chip companies that will benefit most from a slowdown in inflation: IBM, GE, American Bell and 3M. Lower oil prices and interest rates, he says, could keep the bulls going. Biggs last week, using Churchill's famous quote, said the bull market had not reached the "beginning of the end" but the "end of the beginning." . This file is automatically generated by a robot program, so viewer discretion is required.