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Bullish investors shake off insider jitters

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The Praetorian Guard has been closing ranks in the White House around an embattled President. The elite of Wall Street are also closing ranks - around an embattled institution. Scarcely two weeks after disclosures of massive insider-trading abuse, the Dow Jones industrial average is near an all-time record level. It closed last Friday at 1,914.23, a gain of 20.67 points in four trading sessions, up more than 100 points since the Ivan Boesky scandal caused the market to slip steeply.

Even the takeover machine has shifted back into high gear, notwithstanding the aspersions cast on such raid-financing institutions as Drexel Burnham Lambert. Chesebrough-Pond, Borg-Warner, and Carter Hawley Hale are all newly under attack. The First Interstate pursuit of BankAmerica is still on the table. Goodyear and Gillette have just shelled out millions to stave off takeover. There have been rumors involving Colgate-Palmolive and Lockheed.

In other words, it's business as usual for the takeover-oriented bull market we've known since August 1982.

This may sound like a cynical question, but it is worth asking if only because it must have flitted across the minds of many investors in recent days: Is this for real? Or are the big-money boys pumping up the market, forging ahead with takeovers, in order to reassure investors who otherwise might have lost faith in the system?

Perish the thought, say most Wall Street hands. Nobody plays with money like that. The rally has been for real.

``It's a big country, a big world,'' says Richard Strong, head of the Milwaukee-based Strong Fund. ``Everybody makes decisions for himself. Inflation's under control. It's the era of the financial instrument. In other words, the fundamentals look good.''

Mr. Strong says his mutual fund portfolios are close to fully invested, although he has some cash in reserve for buying opportunities - which he expects to emerge if more names are dragged into the Boesky affair.

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