Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (7585)	8/8/1999 8:34:00 PM
From: Justa Werkenstiff	Respond to of 15132

POLL-Rate fears dent Euro funds' view-Merrill LONDON, Aug 9 (Reuters) - Concern about rising interest rates has deterred European fund managers from investing, despite their growing confidence about the continent's domestic economic and profit outlook, a survey released on Monday said. The Merrill Lynch Gallup Survey of continental European fund managers for August found there were 38 percent more bulls than bears on higher profits in 12 months time. The survey found the number of repondents believing the general economic situation in Europe would "get a lot better" in the coming 12 months outweighed those who did not by 25 percent. However 51 percent more investors forecast higher rather than lower inflation in 12 months, compared with a net 36 percent forecasting higher inflation last month. Managers believing short term interest rates would be higher by then outweighed those seeing no change by 65 percent, versus a net 32 percent seeing higher rates in June. Bryan Allworthy, European equity strategist at Merrill Lynch, said European fund managers were becoming more cautious. "They want to wait and see if U.S. policymakers will raise interest rates by early autumn -- especially after hearing U.S. Federal Reserve chairman Alan Greenspan's recent warning that there may have to be a policy response to external economic growth," he added. Reflecting these concerns, a balance of 32 percent investors held above average cash levels compared with a balance of 11 percent holding more cash than normal last month. Fund managers were increasingly disaffected by the U.S. and British equity markets although they remained bullish about Continental Europe, Japan and the Pacific. A net 55 percent were bullish about Europe, 72 percent about Japan and 55 percent about the Pacfic Basin. But bulls of Britain outweigh bears by only 15 percent, versus 49 percent three months ago, and a net 26 percent were bearish about the U.S. market against one percent three months ago. France was the most popular market in continental Europe, displacing Germany, July's favourite. However the balance of managers intending to raise their exposure to Europe rather than reduce it fell to 29 percent from 45 percent in July suggesting they are becoming fully invested in domestic stocks, according to the survey. Cyclicals stocks were the sector of choiCe for 34 percent of managers, versus 42 percent in July, while growth stocks were favoured by 31 percent, down from 38 percent in July. Telecom-media-technology were the most favoured stocks and the survey found a deepening dislike of insurance stocks. However, an increasing number of respondents (over 20 percent) had no broad sector preference and more managers said they had no preference between large and small caps than in previous months. "The increased reluctance to express a preference suggests that either there are fewer opportunities out there or that there is a greater uncertainty about future economic policy direction," said Allworthy. The survey was carried out between July 31 and August 4 and involved 65 European fund managers handling funds totalling 1,856 billion euros.

To: Justa Werkenstiff who wrote (7585)	8/8/1999 8:51:00 PM
From: Justa Werkenstiff	Respond to of 15132

Investor Optimism Leaves Some Worried by Hal Plotkin Silicon Valley Correspondent Despite the market's volatility this summer, investor optimism measured in July hit record levels last month and the danger exists of a big mismatch between expectations and reality. Fully three-quarters of investors surveyed in July say they are optimistic about achieving their investment goals in the coming year. The survey was conducted as part of a joint effort by PaineWebber, Inc. and the Gallup Organization. Overall, investors surveyed say they expect a return of 16.6 percent, a record high, over the next 12 months, up from 14.9 percent in June. Investors likewise have high hopes for long-term market gains, defined as more than 10 years, counting on 16.2 percent compounded growth, up from 15.6 percent the previous month. INDEX OF INVESTOR OPTIMISM Month Overall Personal Economic Government July '99 171 115 65 -9 June '99 131 100 59 -28 May '99 156 110 68 -22 April '99 165 114 71 -20 March '99 145 108 57 -20 February '99 184 110 76 -2 December '98 147 108 56 -17 September '98 158 104 63 -9 June '98 162 105 71 -14 March '98 171 104 73 -6 December '97 126 103 62 -39 September '97 141 101 62 -22 June '97 119 104 57 -42 February '97 87 97 43 -53 November '97 95 99 40 -44 October '96 100 95 41 -36 Source: Gallup Organization Investors who have invested for five years or less have by far the biggest field of dreams. They expect short-term returns of 21.1 percent over the next twelve months and 22.6 percent, compounded, over the next ten years. "This confirms what I have been saying," says Ralph Bloch, chief market analyst at Raymond James & Associates. "The so-called baby boomers who have gotten into the stock market are the most arrogant group I?ve ever seen in my forty years in the business. I don?t know what they?re smoking, but it must be some very good stuff." The PaineWebber Index of Investor Optimism survey was based on calls made during the first two weeks of July to 1,005 investors with portfolios of $10,000 or more, randomly selected from across the country. PaineWebber's Index of Investor Optimism Read the Gallup Organization's Press Release Bloch says he doesn?t buy what he calls the "Goldilocks theory" that low inflation, low interest rates, and moderate growth will sustain recent record market returns. Instead, he says overly rosy recent market forecasts remind him of the blue-sky projections that were made for small caps and Asian equity markets just a few years ago. Bloch keenly remembers one prominent analyst calling Asian stocks "shells on the seashore" that should quickly be scooped up. "If you listened to those fools, you lost your shirt," he says. Other analysts agree that the market?s recent performance is largely without precedent. "The historical average of roughly 10 percent annual returns goes back to the early 1900?s," says Manish Kumar, an analyst at Lehman Brothers. Over the last few years, Kumar says, domestic equities have averaged closer to 25 percent annual returns. Roughly speaking, those equity prices reflect about 25 times profit/earnings numbers, a ratio Kumar says does not leave much headroom. "I don?t know when the superior returns will cease," he says. "I suppose those numbers could go higher, maybe as much as 10 or 11 percent." Even so, Kumar expects overall market returns will eventually retreat to more historical levels. Unrealistically high hopes are also troubling to executives at the company that sponsored the survey. "The unbridled expectations for return, especially among younger and less experience investors, is unsettling because most of them have never truly experienced a sustained market correction," said Mark B. Sutton, president of PaineWebber?s Private Client Group, in a report that accompanied the release of the data. According to Bloch, a veteran technical analyst, current high expectations are a "screaming technical negative." He says sentimental indicators provide useful information to contrarians who put more faith in technical analysis than in attempts to understand less tangible and more fluid factors such as overall market psychology. "That?s one of the reasons I shifted 43 years ago from fundamental analysis to technical," Bloch says. "It?s not a perfect discipline, none of them are, but it?s a lot better." Bloch, like Kumar, agrees that investors should base their long-term expectations on more historical patterns. So what is Bloch?s prediction for the stock market over the short-term? "I haven?t a clue," says Bloch, not known for mincing words. "And neither do the others. They?re just a whole bunch of fools who think they can do it."

To: Justa Werkenstiff who wrote (7585)	8/8/1999 8:55:00 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Ralph Watch In case you missed it, two weeks after saying we were going to 12k by the end of the year, Ralph flopped by going to neutral in the weekly WSW survey on Friday. Watch for Ralphie to go out and search for a camera this week to tell us of his newly found wisdom.