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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: Still Rolling who wrote (231)	6/17/1998 4:51:00 PM
From: Real Man	Read Replies (1) \| Respond to of 1301

This is a sad story. Anyway, I'm more inclined to go long Asia now (Japan, Korea, Thailand, China) than to short it. I would wait until the reversal of asian currencies - Often it takes 9 months or so for the currencies to reverse after a sharp fall. I thought this happened this January - Korean won gained 30%, others too - but not so easy... The reversal might have a devastating effect on the US markets - the commodities will rise, and so will inflation, the bond and stock prices drop. Best time to buy US stocks was 1933 - the deep Great Depression. Japan is a great exporting country. At 145 Yen to the $ chances are they will export themselves out. Fundamentally SEA was extremely overvalued. Compare the market Cap of more than 300% of GDP in Malaysia with Russian figures. I agree that US is a titanic - the best economic conditions ever and the most overvalued market ever - the valuation surpassed 1929 and is rapidly approaching Japan-1989. It seems lately the market is driven by blind mutual fund investors and scared asian money. Note that a good chunk of treasuries is held by the Japanese. My estimate for a "mean" for the US market is Dow-4,000, right now. I have no idea how or when the return to the mean will happen. When the time comes for the titanic to sink, I would expect the worst consequences on the international markets. US will pay dearly for allowing the bubble reach these proportions. Others will pay less. Yet I have no idea when the time will come. Russia is now paying dearly for using borrowed money to pay its buerocrats. At these interest rates, it's unlikely the GDP will grow this year. I still believe that capitalism will find its roots in Russia. Since this is a baby market, the interest rates fluctuate wildly and take stocks with them. Right now I'm willing to bet long term, because I believe that risks that endanger the system I can tolerate. -Vi