NO CAUSE FOR CONCERN
I wrote the ideas below in October of 1987, after "the crash". Much of it applies now...September 25, 2001. This time, however, I think the markets have further to fall. I will address this point, and bear market rallies, or is it rallys, in my next report. Our stocks, will, as usual continue to hold up well...except perhaps for the banks...they could decline a bit more. I'm still waiting to buy my next bank. It's been a long, long wait. Did you buy Trilon when it dipped to $13 again last week? I bought some more, even though I heard they are somewhat involved in re-insurance. I'm off line for a few weeks and then coming back in November with a new e-mail address and a dot.ca web site out of Kingston. This site will disappear December 31, 2001...most likely.

(Connolly Report - October 19, 1987 - page 156 - the day of "the crash")
Recent events in the financial markets have been a once in a life time experience and I am thrilled to have lived to see it happen. I am not at all worried because I am not leveraged and the utilities, pipelines and major banks I followed, held up well through all the havoc. The price change column to the far right below shows the decrease in price for Monday October 19, 1987. The average drop in price of the 25 stock s I follow, was only $1.25. The price of these stocks is supported by their dividends. I have included below, also, the most recent figures for profit per share. [not shown in this list] The dividends are secure on all of them, with the possible exception of the two marked with asterisks (QueTel, TransCan Pipe). If you purchase stocks to provide a growing income, nothing has really changed in the last week. Your next dividend cheque will arrive as usual...no cause for alarm, and certainly no reason to sell. If you did not sell when prices were high, it would be foolish to sell when the price was lower. These are investment quality stocks. They stood up to the test of October 19, 1987. They will continue to do so. Regardless of what the future holds, people will still require electricity, telephones and gas.

There will be some terrific buying opportunities when the dust settles. Keep cash in CSBs or T-bills. I still like the electrical utilities and I am not at all keen on bank shares. When banks actually begin to write off third world loans, prices could decrease more.
The price column below is the close on Monday October 19, 1987 and the yield is based on the same figure. The TSE 300 peaked on August 13, 1987.

Newtel 7.9% $14.75 -1.00
Bruncor 7.6 15.50 - .75
B.C. Tel 7.6 23.25 -2.25
Cdn Util 7.6 17.00 -1.62
treasury bill at 9.58% = dividend of 7.4%
MarT&Tel 7.4 $13.50 - .75
TransAlta 7.3 $25.12 - 1.62
PacNo Gas 7.3 $20.50 - 1.50
Bank MTL 7.3 $27.50 -1.25
Mar. Elect 7.2 $10.50 -.75
Quebec Tel 7.1 $13.00 -.25
Royal Bank 7.0 $28.62 - 1.37
TransCan P 7.0 $15.87 -1.12
Bell Enterp 7.0 $34.25 -2.50
Consum Gas 7.0 $23.37 -.37
Canada savings bond 9.0% = dividend of 6.9%
Noverco (Gaz) 6.8 $ 11.25 - .87
Nfld L & Pow 6.7 $ 18.62 - .37
Cdn I. Bk Com 6.5 $ 16.50 - 2.12
Inland Nat Gas 5.9 $ 11.50 - .87
Island Telephon5.9 $ 15.50 - .25
Westcoast Tran 5.5 $14.50 - 1.50

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N.B.
Interesting to notice, as I re-key this page in December of 1999, where certain stocks are in the list. TransCanPipe, for instance, is way down the list, even though it would soon announce a dividend reduction from $1.12 to .79 because earning were only 86¢.
Consumers Gas is now part of Enbridge.
Inland Nat Gas became BC Gas.
Newfoundland Light and Power is now Fortis.