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To: Larry S. who wrote (20912)	10/4/1999 10:47:00 PM
From: Susan Saline	Read Replies (2) \| Respond to of 53068

To: +IQBAL LATIF (0 ) From: +IQBAL LATIF Monday, Oct 4 1999 2:49AM ET Reply # of 29109 <<<New data Friday from brokerage Salomon Smith Barney show just how deep and widespread the market's decline has become: * The average New York Stock Exchange stock has fallen 27.7% from its 52-week high (through last Tuesday), or nearly three times the Dow's decline from its high. * The average Nasdaq stock is down a stunning 34.8% from its 52-week high. Because averages can be skewed by some very big losers (or winners), Salomon Smith Barney looked at the market from another angle: the percentage of issues traded that have fallen more than 10%, 20% or 30%. On the NYSE, 37.5% of all stocks now are down 30% or more from their 52-week highs. And 62.6% are down 20% or more. On Nasdaq, 52.1% of all stocks traded now have lost 30% or more from their highs, and a whopping 70.9% are down at least 20%. Perhaps most striking is that the hammering has become relentless in the cases of many former market stars. Example: Mattel on Friday plunged $2.13 to $16.88, its lowest price since 1995, amid fears that the company's earnings may again miss expectations. Many health-maintenance organization stocks dived 20% or more Thursday on reports that the industry may be hit with class-action suits alleging lousy patient care. The term "out of favor" is quickly becoming superfluous in trying to segment stock groups. With few exceptions--notably, the new-issues market, where the speculators still are running wild--try to name some stock groups that are in favor. How much worse can it get? That's the trillion-dollar question, of course. To buy into the market today takes a lot of guts, with the interest rate question looming and Y2K worries likely to become more pronounced in coming months. But then, buying stocks when they're down is always the hardest decision. It's also the way savvy investors reap the biggest rewards in the long run. A year ago, at the depths of the market's fears about the world economy, few people wanted to sink money into Asian stocks. One year later the average Japanese stock mutual fund is up 100%. Wall Street's bears argue that even though U.S. stock prices are down, they aren't down enough. The pain level needs to become excruciating, they say, before stocks will be worth buying. It could happen, certainly. But if the outlook for interest rates, inflation, the dollar, corporate earnings and other key market concerns isn't as dire as many people now fear, there is at least a reasonable chance that what is now a bad bear market for many stocks won't turn into a severe one--and instead will give way to another substantial rally sooner than later. The accompanying graphic is something I've kept on the wall next to my desk for decades--I received it so many years ago I've forgotten its source. It tells the story of the market's cycle: At the bottom of the curve (when stock prices are depressed) investors view shares with contempt. As the market rallies, investors first are cautious, then confident. At or near the peak, investors have total conviction about their stocks, and even when prices begin to fall, psychology remains complacent ("It'll blow over"). Finally, when prices are down sharply, there is concern. As they fall further, concern turns to capitulation ("Get me out at any price!"). Which then leads to contempt--and the cycle starts over. Where are we now on the bell curve? With many stocks, I'd argue we're already into concern and capitulation. The bears say we've only crested conviction. Someone's going to be wrong. >>> Tom Petruno ---latimes.com.