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To: edamo who wrote (117844)	4/15/1999 1:53:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 176388

Final Cut- From the Oracle of Wall Street ed a: '...Cohen said it was wrong to try to judge the market's level by looking at whether it was above or below its historical average price to earnings ratio. She said it was more important to look at the reasons behind current high valuations, which were mostly due to the economic situation providing good prospects for corporate earnings......' '..."We think that, overall, stocks in the United States are very reasonably priced," she added.... ...'"I think, as I mentioned earlier, this is a stock market that will be moving higher for the rest of the year," Cohen said. =========================== Full report Goldman'S Cohen Says U.S. Stock Gains Warranted 8.28 A.m. ET (1228 GMT) April 15, 1999 By Andrew Clark WASHINGTON — Abby Joseph Cohen, one of Wall Street's most respected stock analysts, said on Wednesday recent rises in the values of U.S. stocks were justified by strong economic conditions in the country. "The rise we have seen in stock prices in the United States is fully warranted by the economic and corporate evidence," Cohen, a Goldman Sachs partner and managing director of its investment policy cmmittee, told the World Economic Forum. "We think that, overall, stocks in the United States are very reasonably priced," she added. Dubbed the "prophet of Wall Street," Cohen has been rated as the top portfolio strategist two years in a row by Institutional Investor magazine's highly regarded survey. She noted the price rise had mainly benefited large capitalisation stocks, but said more companies could join the party if economic growth persisted in the United States and the global economy showed signs of stabilising. "We will see willingness by investors to move away from the largest markets and the largest stocks," Cohen said. "We would expect that within the U.S. equity market, as investor confidence builds that there will be no recession this year or next, that small and middle capitalisation stocks may benefit. And as you look around the rest of the world, we believe that stock markets of some of the emerging countries may also benefit." Speaking to reporters after her speech, she was asked about the market surpassing her 1999 year-end targets, which she set less than a month ago. Cohen raised her target for the benchmark S&P 500 index to 1325 on March 24 after previously estimating it would reach a range of 1275-1300. Her target for the Dow Jones industrial average was upped to 10,300, from 9,850. The S&P 500 closed on Wednesday at 1328.50, while the Dow industrials hit a new record high at 10411.66. "The fact that we have broken those targets, or touched those targets, is something that makes me happy," she said. "Clearly I would be more concerned if the market was moving in the other direction." "I think, as I mentioned earlier, this is a stock market that will be moving higher for the rest of the year," Cohen said, but added she expected the rate of gains to slow. "U.S. stock prices surged between October and January by some 30 to 35 percent," she noted. "We think a more mortal rate of increase is what we'll see going forward." Cohen said it was wrong to try to judge the market's level by looking at whether it was above or below its historical average price to earnings ratio. She said it was more important to look at the reasons behind current high valuations, which were mostly due to the economic situation providing good prospects for corporate earnings. "It is our conclusion ... that the current P/E ratio of the U.S. stock market does not represent an overvalued level at all," she said. "The stock market, at the end of the day, will rise if the economy grows well."