To: Roger Thrash who wrote (3393 ) 7/20/1998 7:05:00 AM From: steve goldman Respond to
Well, personally, I feel the market is well overvalued, trading outside historical and reasonable ratios, and exposed to a sharp or even a more drawn-out bear market. Firms have been living high on the hog for a few years now. Look at the earnings at a GSCO,MLCO, SChwab, etc. When you make xx hundreds of millions for the year, you hire new folk left and right, hoping to parlay their gains into more. And those gains are NET of the new hires. SO in a downturn, like ANY company, any industry, you will see downsizing. If not managed properly and poorly lead, companies will go belly up. Am I personally worried? No. We've been around about 20 years and are probably one of the most efficiently run companies around. About 90% of our clients are long term investors who have been around for quite some time and have experienced such a downturn. If anything, from a money management perspective, we have been pretty cautious and concerned during the past 6 months etc. and have been urging clients to raise some cash to the 30, 40% level. To not make or make less is one thing, to lose 30% on a downdraft is another. So for the most part, I think most of are clients are fairly stable, fairly well positioned and able to take advantage of a downturn. Will long term business slow down? A bit, but the best opportunities are when the blood is in the streets and while the volume will be light, nibblers who are well positioned will take advantage.
