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Strategies & Market Trends : WILL COCA-COLA ALWAYS GO UP? -- Ignore unavailable to you. Want to Upgrade?

To: john griffin who wrote (1256)	9/24/1998 5:00:00 PM
From: Sonny	Respond to of 1462

Makes some sense John. Also I remember hearing once (recently, may be a few weeks ago ... may be it was on CNBC ... please confirm), that the almighty superpowerful AG has all his personal cash in treasuries only for now. Also, I remember a year-and-half ago when a Barron's issue had depicted a graph showing to the effect that when AG utterred that famous "irrational exuberance" phrase, since then the market had rallied. Well, everyone has his day in the Sun one day. That time the probability favored that reporter/analyst, this time it may favor AG ... forgetting the other factor for a moment about how powerful he really is, no? But still, in general, the market has become very selective recently. From now on (as if it wasn't already :-) ) it will only reward companies their fair value only ... no froth! So, for no growth KO, no-growth in PE in the near term. That will be the market's decision. I observed all big orders today were red (sales) and some miniature spikes up, were generated by some small-fries (low volume) trying to catch a falling knife! Especially, towards the end of the day (when profs. are active), the action looked like sharp downward drift! In the last few weeks, even when the market had rallied a bit, KO went down 10% !!! Thats a heavy selling pressure I would say. Still, ignoring these day to day variations as pure noise for a moment, the most fundamental argument which struck me as decisively bearish was this: Heard a story which depicts the global rough times currently rather vividly, wherein a Dad (most likely in a 3rd-World country) is moving his piece of bread to his child's plate so that she won't go hungry and when the child demands a soft drink, he pulls out a local-brand Pepsi look-alike can, which is already opened and empty, pours some tap-water in it, a spoon of sugar, a granule of coffee to simulate the color, and hands it over to the child! Can the turmoiled world currently afford the costly (dollar-based) American good ... which is perceived as "pure luxury" over there ... and KO derives 75% of its earnings from such overseas, which are becoming so poor and poorer everyday? Can anyone in their right mind, for the short term, even think of granting a PE of 37 to KO, with the present market psychology at home?? I wouldn't be surprised if it turns out to be an ugly day for KO tomorrow. Even if not tomorrow right away, a slow and painful slide towards early-forties by year-end is almost a given. All imho. regards to all, -/Sonny.

To: john griffin who wrote (1256)	9/24/1998 6:40:00 PM
From: Stephen	Respond to of 1462

John, Greenspan will never lower rates to help out the equity markets, but he will lower rates to maintain liquidity in the global market place because he knows if he doesn't the domino effect will feed itself. The question is not when but how much. 25 points and the market will drop anyway, 50 points and there will be a rally for a short period only. I feel that he may only do the .25 with a clear message that another .25 is on the cards for the next meeting. That way he can do the minimum and try to get away with it. Anyone who still thinks that he won't be dropping rates has not been paying attention (GG) Good luck all Stephen