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Pastimes : From A to Zeev" -- SI Sacks Zeev -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (455)	9/3/1998 4:11:00 PM
From: Zeev Hed	Respond to of 708

Judy, if we are indeed in a bear market and it has few more quarters to go, I think that the financials are going to be a bad place to hide. Maybe, once the Fed's lower the "funds rate" than it might be safer. I do not expect the fed to act just because of our minimelt (you'll need to go to the mid to low 6000 for them to start worrying, maybe lower). Merrill will probably lose some $100 MM additional on getting established in Japan (but that is a fantastic long term investment for them worth every penny) and they may have some additional exposures, I am guessing (shooting from the hip) that their annualized earnings may be cut by a buck or $1.5/share getting them around $4 or so. In a bear, the market may not give them more than an 8 PE on this, so a low in the mid 30" is not impossible. They have to break their lows, but it seems a "foregone conclusion" they will. Chase, has broken through last week's lows and beeing a financial stock as well, the same principles apply as to MER. I would wait for the mid 30' there as well, or at least, in both cases for a signal that this bear move is closed. Zeev