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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (316)	5/13/1998 7:09:00 PM
From: Anton Posch	Read Replies (2) \| Respond to of 1722

I have been following this thread for a while and enjoying the excellent insights and analysis found here. I finally decided to add my 2 cents. I am a physician working for one of the oldest and in my humble opinion one of the best HMOs in the US. I believe that one often neglected reason for the low inflation of the last few years has been the overall flattening of health care costs. This has been primarily due to price competition among health insurers and the transition to managed care. As a result, most health insurers, including the company I work for, are losing money. Rates must and will go up, because cost cutting has been taken as far as it can rationally go, and too far from some perspectives. Rates for 1999 are currently being decided upon, the only question is how much they will rise. This a tricky proposition for the insurers; if you are too low you will continue to lose money, too high and you will lose market share. At any rate, health insurance costs are about to start rising again, and this will affect the overall economy in many ways. This is a major portion of labor costs, and is another big factor that could result in an acceleration of these costs and an uptick in inflation.

To: porcupine --''''> who wrote (316)	5/14/1998 9:26:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

Buffett says U.S. stock prices need rosy scenerio NEW YORK, May 14 (Reuters) - Billionaire investor Warren Buffett, chairman of Berkshire Hathaway Inc. (BRKa - news), said in a taped interview released on Thursday that a rosy scenario was necessary to justify current share prices. The comments were made on May 8 in an interview taped for television, were released on Thursday and will air on May 16 on ''Adam Smith's Money Game,'' a public television show. When asked by interviewer Adam Smith if corporate profits could continue to grow at current rates, Buffett said: ''I don't want to bet on it continuing. But I am saying that if it does continue then stocks are not overvalued, but it takes a rosy scenerio to justify these prices.'' Buffett said he did not think stock prices had much margin of safety now. ''It leads to caution,'' he said. ''But it doesn't predict a bear market.'' ''I don't think there is much of a margin of safey in stock prices right now,'' he said in the interview. ''No, there is not a margin of safety.'' Buffett also commented on the recent wave of massive merger deals, saying when asked that they were partly driven by the egos of chief executives. ''It is not fun if you are a CEO to look around and see your competitors or colleagues making deal after deal and being plastered all over the press and to sit there and say I don't think these deals make sense,'' he said. ''And you have got other constituencies urging you on.'' When asked about derivatives, Buffett said it would be nearly impossible to regulate them at this point. ''They are here to stay and I think regulation would be almost impossible,'' he said.