Business: The Prophet Off Profits

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Joe Granville moves markets

The Dow Jones industrial average rose another 8 points last week, continuing its four-month bull market. A Wall Street rally had been anticipated earlier this year, but no one could be certain when the upturn would begin. Investors have thus increasingly turned to popular stock market newsletters that tell them which stocks to buy and when. The hottest tip sheet of them all is the Granville Market Letter, published in Holly Hill, Fla., by Joseph E. Granville, 57, a controversial market theorist who has combined a good record for calling major stock moves during the past six years with a Barnum-like flair for self-promotion. Some 11,000 subscribers pay $250 a year to read Granville's market wisdom.

When Joe Granville talks about the market, lots of people listen. Wall Street sages credit him with whipping the Dow singlehanded into the 31-point stampede on April 22 that started the current bullish mood. A day earlier, the 1,500 subscribers who paid an extra $500 a year for Granville's special early warning service received telephone calls predicting a sudden rally. When word hit New York that the high priest of Holly Hill was telling people to buy, money professionals jumped into the market in anticipation. Crows Granville: "I don't think that I will ever make a serious mistake on the stock market for the rest of my life."

Granville began tinkering with investment studies during World War II, when he battled boredom while stationed in the Marshall Islands by writing two books on stamp investments. He had started collecting stamps at the age of six, and later published a philatelic market letter that lasted for seven years.

In 1957 Granville went to work for E.F. Hutton, writing a daily market letter. He also published A Strategy of Daily Stock Market Timing for Maximum Profit, a handbook that is still highly regarded by Wall Streeters. After E.F. Hutton began heavily editing his letters, Granville decided in 1963 to set up his own shop. His publishing company now grosses $5 million a year.

Like many market masters, Granville has a system. He uses the volume of stock transactions to help predict major swings. "When you throw a ball into the air, it has upward momentum," he explains. "Before the ball drops, the upward momentum drops sharply. The ball is still rising, but the upward momentum is falling. You know that it will reach its top soon. In the same way, when the majority of my indicators signal a new bottom or top, I know to flash the buy or sell signal."

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