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To: John Pitera who wrote (66355)	10/5/1999 12:04:00 AM
From: bill meehan	Read Replies (1) \| Respond to of 86076

I just got around to reading his Sept comments this evening. I have always enjoyed reading his pieces. I also wish I made what a quarter of what he does.

To: John Pitera who wrote (66355)	10/6/1999 10:49:00 AM
From: Les H	Read Replies (1) \| Respond to of 86076

High-yield instruments to replace equities - PIMCO TOKYO, Oct 6 (Reuters) - High-yield instruments will likely become a substitute for equities as the U.S. stock market is not sustainable going forward, Benjamin Trosky, managing director of Pacific Investment Management Company (PIMCO), said on Wednesday. ``Widening spreads indicate further declines in the stock market,' Trosky told a news conference before an investment seminar in Tokyo. He sees eight to 10 percent annual returns on high-yield instruments. Trosky is portfolio manager for the PIMCO High Yield Fund and also oversees the firm's credit research team. The Fund manages $8.4 billion in assets. On the macroeconmic outlook, Trosky expects growth in the United States to decelerate but remain positive, while the rest of the world grows at a slightly faster pace. He said he expects U.S. long-term interest rates to remain in a range of five to 6 percent, with the possibility of one more U.S. credit tightening, but that would be the last. The Federal Open Market Committee (FOMC) on Tuesday decided to keep interest rates unchanged, but adopted a tightening bias. As global interest rates shift from a long period of decline, ``yields will become much more significant,' rather than using duration or sensitivity to rises in interest rates as investment tools, he said. Under the current climate, Trosky suggested investment strategies such as high mortgage securities, strategies of selling volatilities and taking credit risks through rigorous credit analysis. Asked about attractive investments in Europe, Trosky cited short-term maturities such as the short-end of the sterling curve, where he believes interest rate expectations have risen too far. PIMCO (NYSE:PA - news) is the third largest publicly traded investment management company in the United States with assets under management of $254.6 billion as of June.