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

To: billy d who wrote (2478)	10/15/1998 10:18:00 PM
From: Geoff	Read Replies (1) \| Respond to of 6439

Billy D: I'll try my hand at an explanation... Lowering the Fed funds rate unexpectedly like this shocked the market, and sent investors rushing for small to mid-cap issues, basically a broad-based rally. MO, which has mainly seen upward momentum IMO due to its defensive nature didn't sustain its rally because of probably money flowing out of MO and into smaller issues. However, this is probably just a knee-jerk reaction, as the world economic crisis is far from over, and corporate earnings are still in the toilet. Analysts basically lowered expectations so much that there was almost a 100% chance that companies would beat the expectations. That is good for investor psychology, but bad IMHO because it hides the real problems. I am confident that MO will continue to outperform the market for a while to come. I don't deny there was a lot of good news today: 1) Fed action, 2) Federal Budget announced, 3) $18 billion in IMF funding granted by Congress, and 4) News out of Japan that there are real reforms for its banking system. Those 4 items were all excellent new short-term. Whether or not this makes the rest of the world get its act together is another question. I find myself beginning to agree a little more with Rarebird every day, wherever he may be, and worry that the effects of y2k may hamper the market's attempts to rally back to its former highs. I see a lot of volatility in my crystal ball for the next year and a half, and not much upside for the overall market. That all said, companies like MO will prove to be the big winners, and the best investment for the next few years. And with a settlement, investors who were too fearful of the state lawsuits will open their money markets and let the their cash cascade into MO. Of course, this is just my thoughts, FWIW, so take it all with a grain of salt. But know that I can confidently say one thing about MO -- CHOO CHOO BABY! geoff