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To: john griffin who wrote (29)	5/18/1998 12:07:00 PM
From: john griffin	Respond to of 55

INFO-- see last paragraph Subject: Date: Mon, 18 May 1998 08:44:34 -0700 From: "mike king" <kingm@ccweb.net> To: <Undisclosed.Recipients@esus.ccweb.net> 18 May 1998 0900 Hrs., Las Vegas Time Mid-Morning Economic Comments The Fed Open Market Committee ( FOMC ) meets tomorrow. Last week the Dollar firmed while Bonds were just flat, ending the week under selling pressure to close little changed. Some close fed watchers felt that the market action indicated a change in the Fed strategy. Sooner or later they will raise rates and the market will top. All market do top and so will this one, but it won’t happen as the result of Fed action. With all the problems in Jakarta, it would reflect poor statesmanship to pull the plug at this time. Bonds are a tad higher today, while the Dow has been up 30 and is now off 15. Transports are the weakest segment of the complex, off 8 points. Nasdaq is off 3 while the S&P’s are down 100. The Russell 2000 is off 0.50. The CRB Futures Index is making a new low at 220.80. The Phila Gold & Silver ( XAU’s ) are off 1.54 to 82.75. You can see, there is simply no other place for money to flow. Stocks are the only game in town. Therefore, you will find that long after Bonds and Notes have made their interim top, stock indexes will make a substantial new high once again. Last Monday, we recommended General Motors. GM is undervalued. The P/E is just 8. At the closing bell Friday, GM had risen 5 11/16 to 73 7/8. High for the week was 75 11/16. Our target for GM remains just about the $ 90 area. However, the last 30 years of trading if I noticed anything, when GM makes its move, the end of a cycle is near. Philip Morris ( MO ) got clobbered last week, ending 3 3/8 lower at 35 ¬. Mo, trading at 11x earnings is undervalued at current levels and yields 4.5%, the most of any Dow stock. Waren Buffett turned a bit cautious. However, investors in Berkshire Hathaway continue to go nuts. Last week the shares rose another $ 4,000/share to end at a record $ 74,000. However, since none of the major equity components of Berkshire closed better, it was unwarranted. In fact Disney ( DIS ) closed a sharp 8 7/8 lower last week to end at 110 5/8. DIS is one of the largest holdings of Berkshire. We would sell Berkshire, but look to buy DIS on a dip to $ 103 -$ 105 area. There are no major reports due today. However, Abercrombie and Fitch ( ANF ), Tiffany and Staples release earnings results today. Tomorrow Dell will release 1Q earnings. We like Pfizer, but said in last weeks’ letters, we didn’t like the chart pattern. We will like it, however, in the $ 98-100 area. Retailers continue showing excellent results. Walmart was a star last week. You know we like Paul Harris ( PAUH ) and the May Co. ( MAY ). Both are a buy on dips. Last week we issued a press release for 21st Century Technologies ( TEXN ). Somehow Yahoo got it confused with Century Technologies ( CNTK ). They are not related. However, CNTK made a sharp rally on the merits of performance by 21st Century, a most unusual phenomenon.