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To: William E Hodal who wrote (21205)	5/3/1998 1:42:00 PM
From: Lucretius	Respond to of 95453

This is the prevailing thinking on the Street. That is why it WILL happen. BTW- got Wall Street Week on in the background. EVERY analyst says we're going alot higher.

To: William E Hodal who wrote (21205)	5/3/1998 1:45:00 PM
From: Lucretius	Respond to of 95453

since we're all having so much fun, I thought I'd throw another log on the fire..... NY Times: Managers Hedge. Customers Don't. By FLOYD NORRIS NEW YORK -- An odd dichotomy is developing in American financial markets. The managers entrusted with investing cash are keeping their clients' money fully invested. But when it comes to their own investments, they are taking a slightly different course. They are selling. "We're seeing a wave" of money manager deals, said John Downing, a Goldman, Sachs partner who focuses on raising money for financial companies. Why now? "It's the valuations, predominantly," he said. It's also jealousy. Money managers are watching their colleagues at other firms get rich from selling stakes to the public, and they want in on the action. Bigger companies can go public, as Waddell & Reed did a few weeks ago, and as Federated Investments and Mario Gabelli's management company are now seeking to do. There are rumors that Neuberger & Berman is thinking of doing the same. Smaller mutual fund management firms are going the consolidator route. In that form of deal, a group of companies joins together under a new parent, with the insiders selling some or all of their stake to the new parent in return for cash and securities. The cash is put in by public investors -- in many cases represented by money managers who are cashing out. (Presumably, there are no direct conflicts, in which a manager invests his clients' money in that manager's own company. Instead, one money manager uses his clients' funds to buy another money manager's deal. And that money manager, perhaps, buys the first manager's deal.) It can work out well for everyone. Affiliated Managers Group, one such consolidator, went public in November at $23.50 a share. It has since risen 65 percent, to $38.75. Now, several groups are trying to consolidate a section of the investment industry heretofore unavailable to the public: hedge fund management. Hedge funds like to make big bets. The term "hedge" might sound like a nice conservative way to invest, but it refers to the fact that such managers can hedge against overall market moves by betting that some stocks will fall while wagering that others will rise. In fact, it is a risky way of doing business, and sometimes hedge funds go under. But lately, most have done very well. One consolidator of hedge funds, the Asset Alliance Corp., has bought about half of several relatively small hedge fund managers and is now trying to go public. It says other competitors are working the same territory, but not one of them has yet filed an offering. After the deal is done, the hedge fund managers really will have hedged by selling part of their companies for cash and stock in a company that owns other hedge funds. If a bear market wipes out most of their revenues -- which are based on a percentage of profits paid to fund investors -- the managers will have a nice cash cushion, thanks to public investors. Given the current level of the stock market, it is not hard to understand why managers would want to hedge that way. But the prevailing wisdom is that it would be wrong for the managers to impose their caution on the public, and to raise cash in the funds they manage. After all, the investor wants stocks, and so stocks the funds should buy. No matter what they cost. As a result, cash in domestic stock mutual funds is just 4.3 percent of assets, the lowest level since the end of 1972. That was the eve of the worst bear market of the last 60 years.

To: William E Hodal who wrote (21205)	5/3/1998 1:51:00 PM
From: Wallace Rivers	Respond to of 95453

Out of lurk mode to give my pittance to the thread re Luc and also Ms. Yamada's comments. Yes Luc is entitled to voice his opinion (which he does IMO eloquently and rationally). Anyone is entitled to challenge his theses; slamming or sniping not desired nor necessary. Not meant at all to disparage Ms. Yamada, but....having been a broker, I know where her bread is buttered, and it is rare to hear a discouraging word from those who are employed by Wall Street firms.