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Strategies & Market Trends : Value Investing

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To: Ron Bower who wrote (4993)	9/12/1998 12:33:00 PM
From: Bob Rudd	Read Replies (1) of 78478

Resistance around 7000 - by this, Ron, I presume you mean support, buying demand that would make it unlikely that share prices would go lower. Resistance generally refers to selling that prevents further extention of an uptrend. 7000 was low touched in last years Oct drop. Below that, 6400 provided support in Apr. 97 selloff. <<Bond rates are too low for a decent return>> Treasuries - Nominal rates look very low based on our recent historical frame of reference, but look at real rates (3.4 based on CPI or 4.3 based on GDP deflator) or go back prior to the inflationary surge in the seventies and these rates aren't so unattractive. Corporates & high yield: This flight to quality has served up some attractive yields that will be worth a look as things settle down. There are many places that are very attractive for investment outside the Dow..trouble is the trends indicate they're gonna get even more attractive short term. The Dow and S & P have ridden the indexing trend which IMO is about to reverse leading to my complete agreement with you that there will be better balance between large and small caps...as the returns for the former decline relative to the returns of the latter. Regards, Bob

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