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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (7656)	9/8/1998 7:03:00 PM
From: djane	Respond to of 22640

"Moody's downgrade...which puts Brazil on par with Nicaragua" Yeah, that makes sense. Remind me not to invest in Moody's.

To: Steve Fancy who wrote (7656)	9/8/1998 7:22:00 PM
From: djane	Read Replies (3) \| Respond to of 22640

Okay, a recap of events: -Greenspan hints at an interest rate cut, which would increase liquidity worldwide and help in lower borrowing costs to emerging markets. -Stock prices soar for US banks with heavy loan exposure to Latin America/Brazil and for European carriers who were heavily penalized last week for supposedly paid too much for portions of Telebras. -Brazilian authorities increase already very high interest rates and announce plans to cut deficits. Brazil has over $50B reserves and has repeatedly said it won't devalue the real. -TBR gains only $1.5/share to $62.25 after losing 50% of its value over the last 5 weeks with no indication of any change in fundamentals. And, TBR was valued at about $290/share based on the prices paid by foreign carriers in the late 7/98 privatization. Does this make any sense? Any ideas on what will be the catalyst to unlock the inherent severe undervaluation in TBR's shares? Are all the buyers waiting until the 9/15/98 listing of the 12 companies, 10/4/98 election, or just until after October is over because all Octobers are supposedly bad? Does rational analysis matter anymore or is current investing based only on sentiment, momentum and emotion?