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

To: Step1 who wrote (1053)	5/28/1998 7:39:00 AM
From: Elmer	Respond to of 3902

I think NEC is ok. What I'm really interested in is the banks. While I think its too early, I'm watching Bank of Tokyo (MBK). It reminds me of Citicorp in 1989. If you get a Value Line, Citicorp's stock began to unwind in that year and declined from $32 to $11. It ultimately traded at about one half book value and one half revenue per share. Bank of Tokyo's book value per share is about $6.20. So, its still high. But if it starts to trade down to book value (it's $10.50/sh now), I'll start buying it and add to my purchases on further declines. Citicorp's stock bottomed in 1991 at $8.50/sh about the time Ross Perot said it was bankrupt. It's $150/share today. So, MBK goes on my watch list on the same day that Standard & Poor's puts it on its watch list. Hope it continues down. David

To: Step1 who wrote (1053)	5/28/1998 8:18:00 AM
From: Elmer	Read Replies (2) \| Respond to of 3902

Stephan, Two afterthoughts. First is a site I found that lists ADRs. It's wallstreeter.com . Some of the ADRs listed haven't traded for months, however. The other afterthought is about the comment made in Alan Abelson's column in this week's Barron's. He said that the dividend yield on Japanese stocks is twice the banker's overnight rate. After I read that I called my broker to ask about that. He said the Nikkei is yielding about 1% and the 10 year government bond about 1.25%. There was a period in the US market where the dividend yield actually exceeded the long bond yield by 50%. It was in the late 40s and early 50s. It was a super time to be in stocks. When it happens, it reflects a pervasive view that you heard from your Japanese broker. That is that you can't make any money in stocks and that they are too risky as investments. Now, stocks in the US took several years to increase after this condition first occurred. But if you start to see dividend yields exceeding long bond yields, most of the monetary risk is out of stocks and the only things you have worry about are events like oil price shocks, which you can't predict anyway. Regards David