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To: Wayners who wrote (90)	10/4/1998 7:42:00 AM
From: Capt	Respond to of 141

Beware of the Gang of Four "What is Bruce Smith thinking? For those of you who aren't members of his family, Bruce is an analyst at Jefferies & Co. More importantly, he just initiated coverage of the internet's Gang of Four-Yahoo, Lycos, Excite and Infoseek - with a buy recommendation. His reasons: "They had a significant decline since early summer. And they are seasonally strong in the fourth quarter," he told Bloomberg. And I know, the Web's the future, which is why I and my colleagues are doing what we're doing. And these four companies are the gateway to cyberspace and capital gains. So, call me a coward, a nerd, or simply gambling challenged. But, don't you think that Smith's recommendation at this point is a tad reckless given how jittery investors are these days? Oh sure, the Gang of Four are down from their all-time highs, as if that really means anything. Folks, Infoseek, which closed Friday at $23.60, is up nearly four-fold since last October. It's up nearly 6 times in 16 months. Lycos is up nearly 10-fold to $31.75 since August 1, 1996. Excite? It's up about 72% to $39.60 since August 31 OF THIS YEAR. Okay, I know what you're going to say. Yahoo is a good investment because it actually makes money. Wow! But, after Friday's close at $127, it's up 51 points, or about 70% since September 1. It's up more than seven-fold since last Halloween. Booh! It's up more than 23 times in less than 27 months. Maybe I'm wrong. But you know what? If the Gang of Four join the bear market that many stocks are already enduring, I would feel like a jerk if I had run out today and bought these stocks for the first time."

To: Wayners who wrote (90)	10/4/1998 7:52:00 AM
From: Capt	Respond to of 141

Telecom Equipment Makers Unfairly Punished "The great bull run for the telecommunications equipment makers is over. Right? We don't think so. Before we explain why things aren't so bad, let's look at the heavy selling that has recently hurt these companies. Bruised and Battered Investors are running for cover, concerned about global economic turmoil and analysts' predictions that U.S. companies will report weaker third quarter earnings. Shares of leading telecom equipment providers, such as Lucent Technologies (NYSE: LU) and Northern Telecom (NYSE: NT) lost 15% and 23% of their value, respectively, since the beginning of the week. Smaller vendors were equally hard. ADC Communications' (NASDAQ: ADCT) stock, for example dropped 21%, to $20.19 per share, during last couple of days. The suffering endured by telecommunications equipment companies is not simply due to a jittery market. In September, a number of manufacturers pre-announced shortfalls for the quarter ended on September 30. Alcatel (NYSE: ADR ALA) said it would fall short of expectations because of a slowdown in orders from European and Asian carrier customers. Earlier in September, Ciena (NASDAQ: CIEN) and Tellabs (NASDAQ: TLAB) made similar announcements. Northern Telecom (Nortel), a Canadian telecom equipment maker also warned analysts that its second half revenue growth would be lower than expected, primarily due to decreased expenditures in Europe and Asia. In the meantime, Nortel announced that its earnings for the third quarter and for the fiscal 1998 should be in-line with expectations. As greater number of companies pre-announce weaker results, investors are growing concerned that European and Asian problems will eventually reach the U.S. shore. However, contrary to the widespread belief among some industry insiders and investment experts regarding reduction in capital expenditures on telecommunications equipment, Lucent's management continues to insist that the company did not experience any slow down in orders and its fiscal 1998 revenue and earnings results will meet expectations. Lucent's management is not alone in its optimistic outlook for the industry. Analysts at Warburg Dillon Read believe that "Alcatel's woes do not equal a global meltdown. [Warburg Dillon] does not believe the problems faced by Alcatel will impact most other telecom equipment companies." Lucent shares are trading at 31 times the fiscal 1999 EPS estimate of $2.03. And don't forget: during the last five quarters, management has been able to deliver bottom-line performance that beat estimates by an average of nearly 26%. Bottom Line Assuming that worries about a slowdown in the U.S. telecommunications market are overblown, Lucent's stock looks attractive at $63.50." Analyst: Alex Yakirevich

To: Wayners who wrote (90)	10/4/1998 8:08:00 AM
From: Capt	Read Replies (1) \| Respond to of 141

The Dreaded "R" Word Well the truth of the matter is that there have been several catalysts in the past weeks that have led me to believe that we are on the brink of a recession. Yes the economy is strong with low unemployment. Yes there seems to be no inflation. But let's go to the catalysts, shall we? First, there is Long Term Capital, which has been on everyone's mind, not just mine. These gangsters were allowed to leverage way beyond their means. I can't believe that some of the banks they did business with executed those trades! I understand what could have happened if LT Cap was not bailed out, but where does Merrill Lynch (NYSE: MER) and the other cronies come up with an easy $300 million a piece? Well, there are no IPOs coming in like they used to, and if LT doesn't make it out of its hole, Merrill and cronies won't be left without their $300 million. It will be a lot more. Hence the drop in those stocks. Will they come back? In the long run, yes. But maybe you buy Bankers Trust (NYSE: BT), which assuming it does not slash its dividend, is paying over 7%. A lot better than the 4.9% you can get with the 30-year long bond. Goldman and eBay -- A Study in Contrasts Next catalyst is the indefinite canceling of the Goldman, Sachs IPO. Yeah, there are skeptics that say it could be done next year, but let's face it: those money-hungry partners brought eBay (NASDAQ: EBAY) public with no problem, and even increased the IPO price by a whopping $2 a share the day of the offering, but won't bring themselves public. Something is not kosher there. Yes, the market is hot for Internet related stocks, but with Goldman advising a client to go public, and then themselves back away, that left a bad taste in my mouth. Here is eBay, a nothing of a company, and boom, it is a billion dollar company. On the other hand, there is Goldman Sachs, probably the best run investment house in the world, over a century old, hell they even got Abby Joseph Cohen, and can't get the deal done. Go figure. Gillette (NYSE: G). Enough said. Firing 11% of its workforce, earnings flat. What's going on? Computers are easier to sell than deodorant and shaving blades? And Coca-Cola (NYSE: KO) too for that matter. Two staple type of companies suffering from global economic collapses. That brings me to the next point: interest rates. So Greenspan did not lower by a 0.50%, that is why the market should tank? The market might be right. With cheaper rates, it allows the public to borrow money at a cheaper rate. But what made the economy look so strong was that the stock market was a raging bull, and people felt what I call "paper rich", because their stocks were constantly making new highs they felt rich even though it was in stock, and not in their hands. Now with rates going lower, and the Dow going lower, more people will refinance and borrow money, but will they be able to pay it back? And will they be willing to spend money with the stock market at 7,600? It seems there is a fine line the U.S. economy is walking. There might come a time when it will have to bite the bullet. So far the American economy looks like it can handle a Dow 7,500, especially with rates coming down. But let's say the market does topple to 7,000 or lower? Then what? I'll leave you with that thought to ponder, and would love to hear what anyone has to say on this matter in my forums.