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Non-Tech : Elaine Garzarelli
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To: Zeev Hed who wrote (189)1/4/1997 11:32:00 AM
From: Dh   of 292
 
OK, but either way what I said earlier holds. You will get inflation due to higher costs or you will get margin erosion due to the competion in the world undercuting you. Either way the affect on stocks is not a good one.

Actually, I think that the second point I made in my orginal posting will have a bigger affect short term since the market has come to expect continuous large increases in profitablity. Once the big increases stop you won't be able to justify a 138 Billion market cap for a soft drink maker. (KO, 41X 1996 Earnings, 6X Sales). I wonder what effect having 30+ billion dollars in equity being lost in a single issue such as KO will have on the economy. Don't get me wrong, I think KO is a great company and will be around for who knows how long but I don't think you can call it a "value stock" when it is trading a such a high level. I'd buy it at 42, which would still give it a market cap of 109 Billion.

--- New Subject ---

What does everyone think of all the "talking heads" that the big guys put on CNN, CNBC, etc. Why do they come on TV? I've thought about it and the following are my answers to that question:

1) They want to misleed the public so they can beat up the
little guy so they will sell all there stock and buy
mutual funds

2) They want to comfort there mutual fund holders so they don't
jump ship until well after it's below water.

3) They have a need to feel important.

4) They want everyone to think they are "all-knowing" about the
market, like our subject EG.

Reagrds,

DH

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