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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Liberty who wrote (2387)	9/24/1998 10:10:00 AM
From: Geoff	Read Replies (1) \| Respond to of 6439

It was strange to see such a major move in the market today and Big MO taking a dive. Not really, I agree with md1's analysis, prospects of lower interest rates will cause money to flow into small caps and more speculative plays. Look at the satellite sector yesterday as an example. IMO, MO will continue to bounce off 48 and retest, until one of two things happens: 1) the expected interest rate lowering does not happen on Tues, or 2) MO announces a settlement. IMVHO, here's the reasons: If rates are not lowered, the market will take a major beating, I mean major. Right now a rate lowering is so factored in it ain't even funny. If the Fed fails to drop the Fed funds rate less than 25 basis points, forget it, a lot of bets will be lost. People will once again flee more speculative issues, sending bond prices through the roof, and probably a lot of money will flow into MO as a relative "safe haven" because of its strong bottom line, line of inelastic products (unlike airplanes, cars and even soda), fat dividend and huge cash reserve, and increasing market share in hopes of a settlement. If MO reaches a settlement, the stock will definitely rocket onward and upward. The deep discounts in the cig biz would most likely cease, as marketing restrictions end, and MO will probably continue to gain 1% or so of market share annually, as has been the case for the past decade. Profits will rise with increased cigarette prices, and the settlement will provide certainty for the largest of the lawsuits. (of course, I agree with DK, that the settlements will not last, and MO will have the last laugh in the tobacco wars). And that's the way it is... stuck in the train station at 47-8, but I see the conductor is about to call out, "All Aboard"... choo choo, geoff