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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: synchro who wrote (850)	4/2/1998 1:55:00 AM
From: XOsDaWAY2GO	Read Replies (1) \| Respond to of 3902

Got this off the AOL board, Big Lou's Trading Bar. Subject: Japan Date: Thu, Apr 2, 1998 00:13 EST From: Derif Message-id: <1998040205135200.AAA23109@ladder03.news.aol.com> You guys act like Japan will end the world. Japan has already been in a 10 year bear market, why should it start to really affect the U.S. market now? In fact, I believe what is going on over there is the final stages of a bear market. When financial institutions are failing is when you want to be buying the good solvent companies that will be the survivors. Ask anyone who bought CCI at $10 in 1990, or BKB at $3 or CMB at $18. When the system gets done cleansing the excesses, Japan will have a long sustained period of prosperity. In simple economic terms it all comes down to supply and demand. When a bank fails, that means more customers for a stronger bank. Eventually the stronger bank, whose stock has suffered because of an overall declining market, emerges in a much stronger position with enhanced revenue and earning power. This leads to a sustained period of prosperity and rising stock prices. This principal applies across all industries and the ones that suffer the most in the downfall are the ones with the most to gain when the upswing occurs because they have witnessed the greatest contraction in capacity. That, in part is why the semiconductor and semi cap equip stocks are rallying on bad news...because alot of capacity growth has slowed or reversed, but in the meantime the worldwide market for semiconductors and electronics continues to grow. Hence, demand still rising, capacity shrinking, eventually the strong companies gain market share and pricing power and the stocks go up. The Nikkei index was below 15,000 a few months ago. In all likelihood it should retest it's lows possibly a couple times before it begins a sustained upward move. I won't argue that many stocks in our market are overvalued, but some are also undervalued. It is the Nikkei where people should be "buying the dips".