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Non-Tech : Invest / LTD -- Ignore unavailable to you. Want to Upgrade?

To: Shelia Jones who wrote (3434)	9/26/1998 7:19:00 PM
From: Lucretius	Read Replies (2) \| Respond to of 14427

i believe it is 1:1 btw- here is what others in Asia think about the wonderful prospects for stocks: business-times.asia1.com.sg It's time to sit on that pile of cash Resist the temptation to buy expensive 'baubles' or property; stay long in government bonds in safe havens and hold cash is the advice from experts By Shiv Taneja [SINGAPORE] LOBAL equities are going to fall another 15-20 per cent. Emerging markets are being starved of capital. The world will slip into a recession, and we are close to a global banking crisis. Mr Go: 'Today, asset protection is the key issue with most private clients' -------------------------------------------------------------------------------- And you are sitting on a pile of cash. What a rush, but what are you going to do? Nothing. Cash is king, and it is going to stay that way for the next couple of years -- so if investors are not interested in losing any more of their assets, they'd better get used to that idea. Today, the sexiest thing you want to be invested in is US discount notes, where, at best, the yields are slightly higher than what you'd expect from fixed deposits. Said Khing Go, director of international business with US brokerage Prudential Bache: "A year ago, most of my clients were near fully invested. Today, they are holding half their assets in cash, and the other half in quality investments. Ironically, the best advice I can give my clients today is to stay in cash." It may sound like advice with the benefit of hindsight, but Mr Go said the bulk of his clients had bailed out of Asian assets as far back as two years ago. "Today, asset protection is the key issue with most private clients," he said, adding that while it may be very tempting for investors with cash to start looking at buying "expensive" baubles, or even property, his advice is a definite nyet -- and yes, you can blame the Russians for it! "Assets across the board are only going to get cheaper," he commented. And he may just be right. According to investment think-tank Independent Strategy, the pessimism of their own reports "The Crash of 98" written in March this year, and more recently "Autumn Sonata" written in July, has frozen into a "Winter of Discontent", it said earlier this month. The investment climate that investors around the world are going to have to deal with will be characterised by: a multipolar world deprived of strong American leadership; capital shortage and deep recession in emerging markets, driving a wedge between rich and poor nations, and leading to political instability in and between some emerging markets; a contraction of international trade; an International Monetary Fund out of money and ideas; a paralytic Japan, suffering deflation, falling output and capital flight; US, European financial assets continue to enjoy some safe-haven status. Independent Strategy added that this rather bleak outlook could be brightened only by coordinated Group of Seven interest-rate cuts that prevent global deflation, but cannot stop a "growth recession" in Europe and the US. Here's the bottomline: The way to make money -- or not to lose it! -- is to stay long in government bonds in safe haven nations and hold cash in the few safe banks around, while shorting or staying away from most emerging markets. The outlook for world equities stinks. Earnings will suffer from dreadful global growth, and the globalisation dreams of multinationals will show up in the liability column of most balance sheets. Pricing power is going to stay with the people, and not the corporations, predicts Independent Strategy. "Sure, there may be the odd 10-15 per cent rally on the way down, when G-7 implements interest rate cuts, but we are sticking to (our) forecast of a 20-30 per cent decline in global equity markets (with another 15-20 per cent to go from here). Once the equity markets get down, they stay down for several years," it said.