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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (9604)	11/27/1997 1:34:00 PM
From: Rational	Read Replies (4) \| Respond to of 18056

Mohan: Corporate profits are largely a function of the interest rate and individual disposable income. Lower interest rates reduce a company's cost of capital, and make more disposable cash available to consumers. A reduction in US budget defecit unleashed the pressure on US Treasuries, reducing the interest rate and making an explosion in the US stock market and many other global markets since 1992. Now, we are in a deflationary environment! Techs are suffering partly because of their lower debt:equity ratios. Utilities are going up partly because of their high debt:equity ratios. True, an appreciation in the stock prices also adds to the consumer purchase power. But, most of the investment is tied to retirement mutual funds. If for some strange reason (sun-spot), stock prices fall dramatically, this would lead to a serious problem. But, the financial payment system is so stable that a panic is unlikely to take root. One has to worry about fundamental shifts in the P/E-EPS-interest rate equilibrium which appears to be holding now. At some point in time (a week ago) I was worried that Japan was bound to sell US Treas and did not know of her pact with Fed. I was thinking of their large-scale dumping of US Treas as a sun-spot phenomenon to lift up the interest rate temporarily. But, this pact is a very wise idea, another milestone in maintaining stability in the global payment system -- a need to help keep the markets in line with fundamentals. Again, I do not see the markets rising or falling dramatically, but that any movement will be gradual. I also do not think that the markets are out of line with fundamentals now. However, a lot of companies perhaps are and will fall due to competition while others will lead the way up. Sankar

To: Cynic 2005 who wrote (9604)	11/27/1997 5:43:00 PM
From: Chip Roos	Read Replies (1) \| Respond to of 18056

Hello Mohan and happy Thanksgiving to you and yours. Was wondering if you have any feelings on COGNF as its price has gone South and at one time a few years ago, you felt good about their prospects. I was thinking about jumping in at this level. Also, if you get a chance, please e-mail me with your current e-mail address....I have at least 4 addresses for you in my book. Best regards, Chip

To: Cynic 2005 who wrote (9604)	11/27/1997 9:55:00 PM
From: Joan Osland Graffius	Read Replies (2) \| Respond to of 18056

Mohan, We keep talking on this thread about increased demand for products from US companies. I would like someone to tell me where this increased demand is going to come from. Unless I am living on the outer edge of the galaxy, Asia and South America demand is going to contract. Now Canada is talking about increasing their interest rates which is not going to fuel increased demand for our goods. Even without the increased interest rates the difference in currency is taking care of that. England looks like it could decrease demand for goods with increased interest rates. Maybe I don't understand. Joan