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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (3140)	9/30/1998 12:45:00 AM
From: put2rich	Respond to of 4634

Hank, I might have to agree w/ you about the next gloomy economics. Went to a job fair and not many employers, and the mass is kind of pessimistic (this is in LA). I am afraid that Silicon Valley will be hard hit soon. Any stocks good for shorting now? TIA

To: Hank who wrote (3140)	9/30/1998 3:34:00 AM
From: Bill Wexler	Respond to of 4634

<<US equities are still undervalued compared to what? Future earnings expectations?>> Yes...and I'm not referring to the next 2 quarters. <<Perhaps in a bull market but the bull is dead and we ARE heading for a recession no matter what you think.>> It's not a question of what I think but simple observation and some common sense. I seriously doubt that U.S. economic growth will go negative due to the foreign crisis - most of the cyclicals and companies with large overseas exposure have pretty much laid it out for the near future. The domestic economy is still roaring along, and it has received another kick thanks to the recent rate cut. <<Why does everybody think that just because the averages fell 20% the market is now undervalued?>> What's happening now is bearish speculative excess that's a mirror reflection of the bullish speculative excess of the summer of 96. When you see this much put buying and shorting you begin to wonder where all the new sellers are going to come from. This is why the market has stealthily been crawling back up from its August lows. <<The market has tripled in the last five years and there's still plenty of room to fall.>> Just think, if all of corporate America goes out of business tomorrow, then the market will go to zero!!!! <<Even with another 10% down, somebody who went long five years ago and held would still be ahead.>> Think about a person who went long 25 years ago!!! <<You seem to give the word "undervalued" a short term definition>> Not at all. Sorry if I gave that impression. <<. Here's an "impossible" short term prediction for you- COST will hit 40 by the end of October, 1998>> Maybe. So what? <<I also notice that First Call gives COST a future growth rate of 18% while it still trades at a P/E over 20. It is not a "bargain" yet in my book but it soon will be.>> COST is presently undervalued by at least 20% - 30%. It is a screaming bargain, considering we are days away from what will probably be a most interesting earnings report. I stand by my long term price target of $200+ for COST.