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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Joey Two-Cents who wrote (6828)	4/13/1998 12:37:00 AM
From: Pancho Villa	Read Replies (1) \| Respond to of 18691

JTC: I hope the financial bait takes away attention from the internet stocks:-) Pancho

To: Joey Two-Cents who wrote (6828)	4/13/1998 6:19:00 PM
From: Pancho Villa	Respond to of 18691

JTC: FROM FORTUNE'S FREE EMAIL SERVICE: (emailed to me once I registered for free) For an enhanced HTML version of the Street Life, visit fortune.com. Street Life Monday, April 13, 1998, 6:00 p.m. M&A Frenzy Won't Slow Down by Bethany McLean So our Andy Serwer crawled out from under the crushing weight of his mega-story long enough to scream: "I'm SICK of all this banky-panky!" Yeah, me too. Seems like the market is saying me-three. The $60 billion BankAmerica/NationsBank merger and its little twin, the $30 billion Banc One/First Chicago merger, lifted the whole financial sector but failed to inspire any of the indices. Only at the end of the day did the Dow squeak into positive territory. It closed at 9012.3, up 17.44. The NASDAQ climbed a measly 4.71, to 1824.95, and the S&P slid 0.98, to 1109.69. Hey, bet you can't guess what we've been following today: IT'S A PARASITIC WORLD.... That's why this M&A frenzy won't lose steam any time soon. Why would it? CEOs all have plenty of cheap currency (in the form of over-inflated stock) to feed each other. Every deal sends the stocks up still further, creating more monopoly money. If you were paranoid--and I am--you'd think it was all a conspiracy on the part of the financial services firms: All these behemoths have their own investment banking arms, which earn sickening fees by putting the deals together. And when the mega-mergers splinter into bits, the investment banks will earn the same fat fees all over again. Just think: If Montgomery ever has to help its parent, BankAmerica, sell part of itself, the fees will filter through to BankAmerica's earnings. Sounds like a great business to me. FEEDING FRENZY.... BankAmerica won the name, but NationsBank CEO Hugh McColl gets the top slot, at least for a couple of years. Then he's supposed to hand the reins over to David Coulter, formerly the chief of B of A. Let's place bets: Which will be the juicier business story over the next few years, that transition or the Sandy Weill/John Reed sharing arrangement at the new Citigroup? Do you know how many business reporters are going to be chasing these stories? SO WHO'S NEXT?... It's no secret where the market is placing bets. Bankers Trust up $5 3/16. Wells Fargo (which Brown Brothers upgraded today to a "trading buy"--how subtle) up $18 13/16. J.P. Morgan up $7 1/16, Donaldson Lufkin & Jenrette up $7 3/8, and Merrill Lynch up $4 1/16. Today, DLJ and Merrill, along with PaineWebber, whetted appetites further by announcing stellar earnings, topping analysts' estimates by 15% to 35%. Given that the market now trades at 24 times earnings, and earnings growth this quarter is looking flat, we all better hope that merger mania continues. (Do you think J.P. Morgan is really worth some 50% more than it was in early 1998?) Loose Change I know, I can't let it go. But one more banks comment: Have to wonder how the fiercely competitive egos at Montgomery (owned by NationsBank) and Robertson Stephens (owned by BankAmerica) feel about being part of the same firm. Is the new entity going to do investment banking under the MontStephens name? Or is RobertGomery preferable?... See the front page New York Times story about the rise of the La-Z-Boy armchair? Well, investors love their La-Z-Boy, too. LZB has climbed some 35% since last fall, though it actually relaxed a bit today.... If you didn't dump Transcrypt International on March 25, when the company first 'fessed up to accounting issues and the stock plunged some 40%, now's the time to run: The filing of its annual just got delayed until April 15. You know the lyrics on Bob Dylan's new (and amazing) album:ÿ "Just when you think you've lost everything, you find out you can always lose a little more"? Transcrypt's stock fell another 15% today.... So Dylan isn't exactly uplifting. He has an excuse:ÿ He's from Hibbing, Minnesota! My home town! ÿÿÿÿ ------------------------ ÿÿÿÿ SUBSCRIPTION INFORMATION ÿÿÿÿ ------------------------ TO SIGN UP FOR STREET LIFE, point your browser to: ÿÿÿÿÿÿÿ fortune.com TO SIGN OFF FROM STREET LIFE, point your browser to: ÿÿÿÿÿÿÿ fortune.com For detailed sign-up, sign-off information, e-mail: ÿÿÿÿÿÿÿ dailymail@pathfinder.com. For a Free Trial issue of FORTUNE MAGAZINE, point your browser to: cgi.pathfinder.com or call our toll-free number: ÿÿÿÿÿÿÿ 800-621-8000 For a daily in-depth report on the news and trends that affect your finances, check out the Money Daily on the Web at moneydaily.com Thank you for signing up for Fortune's Street Life!