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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Don Earl who wrote (22689)	6/15/1998 3:05:00 PM
From: Paul Fiondella	Respond to of 42771

(Off Topic) JAPAN INC. As an investment "Since Japan has an extremely low unemployment rate and exports a great deal to the US, it seems to me that a higher exchange rate on the yen would tend to make a lot of their companies more profitable." Export oriented companies in Japan such as Sony have done well relative to the Japanese domestically oriented companies. But Japan also exports to Asia and those exports are off. "If a company exports a car to the US for US$ and pays their employees in yen, wouldn't they be looking at an effective 20% cut in payroll expenses from earlier in the year?" Actually they have to carry extra workers since effective demand is off. Both the Japanese domestic and the Asian export economies are in a recession or worse. If they are able to maintain their US $$$ prices they do get a currency transaction boost. "Imported raw materials would be more expensive, but there should be a balancing factor between the two." Well commodities are where the deflation is. Oil prices are sliding as are most raw materials prices dueto the enormous lack of demand caused by the Asian crisis. "I may have my wires crossed but it seems to be that the current situation should be causing inflation in Japan rather than deflation. Wouldn't prices tend to go up and put pressure on wages?" With raw materials prices going down and the other Asian currencies depreciating against both the Yen and the $$$, and with effective demand in JApan going down (remember that Rubin wants Japan to stimulate consumer demand) prices are being reduced to attract buyers. This shows up in the profit squeeze underway amongst Japanese companies. Japan hasn't suffered greatly yet from the depreciating YEN, although it might at 160-180. Unemployment is increasing in Japan. The pressure on wages is also to the downside as exports decline to Asia from Japan, they need less employees for life. keep in mind that unlike the US, the average Japanese family has in excess of $100K in savings and can better weather an economic downturn. ============= "I'm almost thinking I should pick up some stock in Japanese car companies, although that's so far outside my experience, I'm not sure if it makes sense." You might search the London Financial Times or FEER for investment in Asia opportunities, but last I saw traders were remarking upon the bad bet that many US funds made in not contemplating the latest Asian downturn and investing too early.

To: Don Earl who wrote (22689)	6/15/1998 3:11:00 PM
From: EPS	Respond to of 42771

(OT) Hi Don, Let me cut in with a suggestion try the Nissan Thread Message 4248471 Regards Victor

To: Don Earl who wrote (22689)	6/15/1998 3:43:00 PM
From: dwight vickers	Read Replies (3) \| Respond to of 42771

(OFF TOPIC) Don, Paul covered things very well. The "flation" problem can be hard to get a grip of but devaluations cause inflation at home typically, and deflation to the countries you export to. But with the currency collapse in SE Asia it seems that inflation is less likely to be a problem for Japan. As far as an investment goes. I might look for a small cap fund of some sort in Japan. They're the ones who don't get the benefit of a lower currency. When the Japanese finally deregulate they should be a beneficiary. Today they're hammered to death. I don't follow individual Japanese companies but have heard that stocks there are getting "very cheap". Some of the big exporters may be an exception. Speaking of cheap. I heard that the NASDAQ is carrying a P/E of 70 X. If you take out DELL, MSFT, INTC, and CSCO, it's 96 X for the remaining 5200 companies. Makes Japan valuations in 1989 look cheap. Dwight

To: Don Earl who wrote (22689)	6/15/1998 10:27:00 PM
From: Paul Fiondella	Respond to of 42771

Found this for you Don "April current account surplus hits 1.17 trillion yen. Japan's current account surplus for April came to 1.17 trillion yen, up 10.3 percent from the same month last year, marking the 13th consecutive month of year-on-year growth, according to preliminary figures released Monday. But hit by Asian economic turmoil, exports declined 2.4 percent, the first drop in 33 months. A larger decrease in imports due to lower oil prices and sluggish domestic demand helped keep the current account in surplus, the Finance Ministry said. The rate of increase of the current account surplus has been shrinking and will continue to shrink, a ministry official said. Imports fell 13.8 percent from April 1997, the fourth consecutive month of decrease. As a result, the balance in merchandise trade rose 35 percent to 1.36 trillion yen. Among main import items, crude oil plunged 36.3 percent on a value basis because the price of crude oil was 38 percent lower than a year earlier. Imports of crude oil fell only 1.9 percent by volume. As for exports, electronic parts such as semiconductors dropped 11.4 percent and auto parts fell 15.8 percent, both on a value basis." =================== So you can see that Japan Inc. is still having a positive net capital inflow of $8 billion a month. Today the ruling party in Japan hinted it would start selling $$$ to support the YEN. But the YEN is only down to 145. Rubin says we will not help defend the Yen. So now we see if the Japanese can use traditional methods to do it on their own. And on that result the market swings. More about Japan than you ever wanted to know!!!