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To: Abner Hosmer who wrote (23070)	11/18/1998 6:07:00 AM
From: Alex	Respond to of 116764

Tom. Great to see you back posting. Cut from Kaplans' site.................. I WAS WRONG! To my surprise, the Federal Reserve decided to cut interest rates, apparently concluding that the rally in internet-related stocks and IPOs was faltering badly. There is some logic in the Fed's move, as there are a few of these stocks that actually have P/E ratios below 1000. Instead of removing the punch bowl, Alan Greenspan decided to join the crowd and party on. The prospect of increased future inflation was not lost on bond market traders, the one segment of the market where intelligence is not derided as a major obstacle to success. There is not much that one can say about the euphoric "pop and drop" behavior of the Dow following the rate cut announcement, except to say that investors who buy stocks with the Dow above 9000 are going to get exactly what they deserve. The Russell 2000 index of small-capitalization shares, at least, remained in negative territory throughout the day. Precious metals will be the only winners in an environment of aggressive rate cutting combined with a high P/E equity market, as historical evidence has shown. Look for a substantial decline in the U.S. dollar over the next several months.