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Strategies & Market Trends : Asia Forum

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To: Henry Volquardsen who wrote (6848)	10/1/1998 12:44:00 PM
From: Zeev Hed	Read Replies (2) of 9980

Henry, "mind sets" change slowly. It used to be that equities had to have yields larger than those of bonds, because of the inherent risks in stocks. for more than a generation now, the investing public was taught that stock provide for growth and thus their yield should be lower than the yields on bonds. For bonds to go back to the sub 4% area when the real dividends in stocks like MRK is around 4%, we'll have to go through a recession in which some "recognized" names do not make it (like the old Anaconda and Mansville of the old Dow Jones). Since I am not a "Kahuna" or "Armagedon" believer, I do not think that that is in the cards in the next three years, and thus, I think that the excess liquidity will feed a renewed bull market in equity from levels either in the low 7000, or if 7250 is breached the mid 6000. Right now, I do not see us going into a major recession justifying he Dow going under my (current <VBG>) line in the sand at 6200. Zeev

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