Investing is totally different. Investing is the effort to secure payment for the capital involved without giving any service or labour.

Speculating is an effort to increase capital without giving any labour or service. Speculation is the tendency to act on instinctive desire for ownership and is directed by speculation concerning the future production, acquisition or distribution of wealth.

Charting rises and falls THIS writer predicted the 1987 crash and publicised it 10 days before Black Monday. Since then people have been asking how the prediction was made. The method used was indicators.In 1987 this writer used eight major indicators and 12 lesser indicators. These were some indicators we used in 1987: Rises or falls in the US three-month Treasury Bill yield have proven a correct indicator almost 80 per cent of the time since the 1920s. A 17 per cent increase in the T Bill yield indicates there will be a major fall in US stock markets. This is becausewhen a rise in safe US short-term paper yields occurs, stock speculators will move out of the stock market to get the higher yield. This indicator told me in August, 1987, that a fall in the stock market could soon be expected.

Price To book value ratio. The average price of book value ratio on the S&P 500 before market collapses since 1925 has been at 2.2. It was up to 2.4 in early October, 1987, which indicated a major fall was imminent.

The average price to dividends ratio at market peaks have been 33.8 per cent. In October, 1987, it was at 34 which indicated the market would crash and burn soon.

The Put Open interest to call open interest is quoted daily in financial newspaper. The Put Open interest is the number of persons who have bought Put Options, indicating they think the market will fall. The call open interest is the number who have bought call options since they believe the market will rise.

When the front weighted 16-day moving average shows the put to call interest exceeds 162 and drops below the parameter this is a sell signal. This was what happened in 1987.

These are but four of my indicators that shouted out the market had to fall in 1987. Others were S&P 500 daily sentiment, price to earnings ratio, etc.

Close in on good deal IT IS time to buy Japanese stocks as they should go up in a big way. The problem is which to buy, how to buy and how to buy a diversified group without tying up too much money. The way to do this best is to buy stock in Japan Equity (for about US$12) or JPOTC (about US$10).

These are closed-end funds (not to be confused with Unit Trusts or open-end funds which are more risky, less liquid and more costly).

These closed-end funds are sold in units of 100 shares, can be bought from any Hongkong broker who trades US stocks, and they can be bought or sold any day the US markets are open. With these funds you get diversification as they have many stocks, and you get management by a Japanese stock expert.

With closed-end funds on US exchange there is nothing further to pay once you have bought the stock. There is no front-end load, redemption cost or management fee. You will also receive dividends.

Oil on slippery slope WHEN several international oil analysts predicted on March 15 that oil price would soon rise, Leon on Sunday stated their logic was flawed.

While they had given reasons, they had overlooked more important indicators that oil would fall in price in 1993, and at the most raise US$1 per barrel in late 1993 or early 1994. Actually, it seems oil is more likely to fall below US$16 than to rise to US$23 as the experts predicted.

So far oil prices have continually dropped since the prediction was made. Now the OPEC cheating has started with Venezuela and Nigeria shipping more than their quota. Kuwait, granted a 750,000 barrel per day increase, is starting to cheat and sell more even than their increased quota.

You should not buy oil long; if you want to speculate, sell it short. Do not buy stocks in any US oil companies except Royal Dutch (which is not a US stock although it is listed on the NYSE).

By contrast, gas producers' stocks are excellent investments. Of the three major fuels, coal, petroleum and gas, by far the most ecologically clean is gas which produces no or little acid rain or carbon monoxide.

The best gas resource stock seems to be FRPT Mc Res (symbol FRP, NYSE) which provides a 12 per cent dividend yield, is well financed and well managed. Another is NEW Jer Res (symbol NJR, NYSE) which pays a six per cent dividend yield.

Yen back in ascendancy THE US dollar slowed its drop from the yen but it will drop further as the yen's strengthening momentum is too great. The US dollar has steadied against European currencies but this will only last short term. The US dollar fall against the Australian dollar is being retraced. The same is true with the Canadian dollar. The retracement has already started.

The British pound is meeting resistance at the November to January trading rates. The pound was strengthening against the yen but that appears over and now the pound will weaken. The pound has been recovering against the hard European currencies and can go still higher against these.

However, the pound will give in to renewed weakness before the end of April. The pound will continue to strengthen against European soft currencies.

The Swiss franc is strengthening against all currencies except the mighty yen.

The German mark is consolidating its rally against the dollar and will now gain further. It has paused in its decline against the Yen but will soon weaken further.

The yen has resumed its climb against the dollar. It is consolidating against the European currencies but will soon resume its gain against these.

Businessman Leon Richardson is a well-known financial commentator and investor