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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (2181)	8/5/1998 9:12:00 PM
From: JPR	Respond to of 12475

Mohan: Very interesting piece. I agree that the present form government structure needs systemic changes. Presidential form of Govt in line with the Japanese model is worthy of consideration. But I am yet to learn more about the Japanese system of Govt. The present form is no good. The presidential form of Govt will provide more stability and is not subject to the vagaries of crossing party lines for the sake of power. JPR

To: Mohan Marette who wrote (2181)	8/6/1998 8:29:00 AM
From: JPR	Read Replies (2) \| Respond to of 12475

Mohan: Here is Abby's antidote to Acampora's noxious fumes: NEW YORK, Aug. 05 (Standard & Poor's) - Abby Joseph Cohen, Goldman Sachs' influential market strategist, remains bullish on the stock market, saying that its recent price declines appear to be overdone. She continues to recommend a 65% exposure to equities. Cohen believes that recent weakness in stock prices (almost 10% for major indices) has not been accompanied by proportionate fundamental weakness. specifically, she noted that the latest news on the economy and corporate performances have been better than commonly perceived. She said concerns in recent months have properly focused on three fundamental issues: corporate earnings, Asian developments, and the outlook for inflation and interest rates. In each case, she feels, incremental information has been viewed by many with a jaundiced eye. Cohen says a more thorough review of the data suggests that recent weakness represents an overreaction, and that in many cases, incremental information is supportive of a favorable case for equity ownership. Cohen made no changes in her price targets for key market indices or in her recommended asset allocation. For year-end 1998, she expects the S&P 500 to easily surpass 1150 and the Dow Industrials to easily top 9300. Her 12-month price target for S&P 500 is 1250. Cohen recommends that balanced institutional portfolios hold 65% equities, 25% long bonds, 5% cash, and 5% commodities in the form of the Goldman Sachs Commodities Index. As for second quarter earnings, she notes that while much has been written with a negative cast, a preliminary review of S&P 500 operating earnings per share indicates that profit growth was about 5.6% for the quarter. She says it currently appears that operating profits rose at a rate roughly similar to that of the first quarter based on the 85% of S&P 500 companies that have released results so far. Cohen also feels the Asian impact on the U.S. is not likely to worsen. Since late 1996, she notes, indications have been that principal fundamental worry centered around economic developments in Japan and the rest of Asia. She says this remains the case, but has concluded that the average effect on U.S. GDP and profits has been modestly negative. The impact on specific companies and industries, however, has been and will remain highly variable. Although much of the recent concerns in the U.S. markets has been related to Asia, she believes these worries are overdone. With regard to the economy, Cohen says that the GDP report for the second quarter shows that economy-wide inflation is still running below 1%. She points out that Fed Chairman Greenspan noted in his congressional testimony that GDP-related measures give a truer measure of economy-wide inflation than does the CPI, which runs at somewhat higher rate. Cohen does not expect the Fed to raise U.S. short-term interest rates this year, saying that Greenspan's cautionary testimony last month represented a 'virtual' flu shot.