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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (204)	12/28/1997 3:22:00 AM
From: Tony van Werkhooven	Respond to of 9980

I had planned to post on the very same topic. The article appears in the current issue of Barrons. I just finished reading the article for the second time and found it quite thought provoking. Highlights: 1. Now have price stability- risk that marginal producers (korea, SE asia) can destabilize pricing with consequent severe impact on earnings 2. Anticipates level earnings for the S&P in 1998-varies from the current 15% market expectation of earnings growth-- with consequences for equity prices 3. Compared to Mexico, anticipates a much longer timeframe to work out the problems in Asia-- cites the financial sector as being a much larger component of the equity markets 4. Sees selected opportunity in Europe by "playing the bubbles" of relatively high inflation markets 5. Sees bond yields continuing to go down significantly

To: Stitch who wrote (204)	12/28/1997 8:45:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 9980

I think you mis-typed WSJ for Barrons--and, yes, I read the Wellings interview yesterday--but many thanks for mentioning it as it is certainly an important point of view and one that I agree with (or else am prejudiced in favor of--it's hard to discount one's own biases!). I continue to study the Malkiel/Mei book, though, which is very persuasive about the longer term prospects of emerging markets. I do wish that the Korea Fund had not gone to a 38% premium. Those Templeton China funds look very interesting, though, with both discounts and also a big decline over the past year. Right now I am heavily betting on a decline of the US markets through owning the Prudent Bear Fund, BEARX, but if that occurs I may switch into some emerging market closed end funds. It's better to be on the side of growth than trying to benefit from collapse--but the American market (as the interview says) is a big bubble.

To: Stitch who wrote (204)	12/28/1997 7:33:00 PM
From: Rational	Respond to of 9980

Stitch: I read this article on Friday. The main point that struck me was that the IMF was screwing up SE Asia, unlike in Mexico, and that the IMF prescription for Asia would be worse than ever thought. I had made a post a few days ago here, stating that while the IMF bailout was desirable and crucial to revive the debt-laden SE Asia, the IFM prescriptions on suddenly choking the monetary system in Korea and the rest of SE Asia was falacious. If the interest rate is suddenly raised to 30%, even the legitimate export-oriented businesses will be hurt (and are being hurt), diminishing the prospect of a recovery based on exports. Instructions to close large banks have also been falacious because they have created jitters in the financial system. Japan is now conceding that they should not have allowed a closure of one of their largest banks! Even the US did not do it. Sankar

To: Stitch who wrote (204)	12/29/1997 11:16:00 PM
From: Cyrus	Read Replies (1) \| Respond to of 9980

Stitch, fairly new lurker here. Great thread just what I was looking for. I also read the article "Playing Bubbles", after thinking about it, the only question I keep replaying is if Europe is such a hot play then why cant US companies sell their goods in Europe. Last I checked Europe was 750 million strong. As far as I know they are still a slightly smaller market when it comes to electronic goods. I am stating this from the point of purchasing interest in computers and peripherals. Food for thought though as US high tech companies claim they can make up the Asian difference in the Europe market. As well I have also read that the Asian population holds their tech equipment close to their heart, so other purchases may suffer, if in fact the situation ends up as bad as is projected. Darrell