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To: vip who wrote (129794)	5/29/1999 3:33:00 PM
From: Ian@SI	Respond to of 176387

vip, I didn't see NBR until 11PM. Larry Wachtel of Prudential Securities was the guest that also recommended Dell. Larry is frequently interviewed on CNBC and has struck me as both knowledgeable and a straight shooter. Interview follows: 05/28/99:"Market Monitor"-Larry Wachtel Of Prudential Securities PAUL KANGAS: My guest market monitor this week is Larry Wachtel, senior vice president and market analyst for Prudential Securities in New York City. Welcome back, Larry. Volatility was certainly a major feature of the stock market this week. Does this suggest investors are losing confidence? LARRY WACHTEL, SR. VICE PRES., PRUDENTIAL SECURITIES: I'm not so sure about that. Well, let's put it into perspective. We've gone through four great years, four great months, Dow up 20 percent in the first four months, annualize that out to 60 percent. It ain't gonna happen. Therefore there has to be some pause. And if you want to call a pause cause for concern, I guess you can call it that. But I simply call it a necessary pause. KANGAS: And probably healthy and you see the bull market still alive. WACHTEL: That's right. I think we're in a kind of a news vacuum here. You know, the Fed is unfriendly obviously. That's a change. And we're not right into the earnings season. And I think back to the month of April when we had a spectacular earnings period and the market responded avidly. By the time we get into the end of June, we'll have the sense of the second quarter. I think the second quarter will come up in sparkling fashion in July. That's why I think that this is a hiatus period for the next couple of weeks that could be used as a buying opportunity. KANGAS: So you don't think the Fed will be boosting interest rates at the late June meeting of the Federal Open Market Committee. WACHTEL: Not at that meeting. Maybe in the future, but they'll respond to data. They'll respond to the job figures next Friday and then on June 16, the CPI figures. I see unit labor costs not getting out of control. I see commodity prices falling not rising. We had that one shot oil-related deal in April and everyone went berserk. And I think since then the price of oil has come lower. So I don't think the Fed is ready to pull the trigger in that late June period. KANGAS: Going back to your last appearance with us, June of last year, late June, the Dow was at 8944. You were still bullish and of course we've seen 11,000 plus since then. Some of your recommendations really turned out well like Sun Microsystems (SUNW) is way up and as is Hewlett Packard (HWP) and just today Computer Associates had good earnings and almost got back to even. What are you doing with those stocks? WACHTEL: Well, I'm holding Hewlett. I think Computer Associates still has some room left on the upside. Sun Micro has come a long way. I'd be holding those. KANGAS: OK. All right, now we have a new feature on the program of course and that's where our viewers get to ask our market monitors a question. Tonight the first question is from Milton Onaka of Hawaii who watches us on KHET in Honolulu. Mr. Onaka wants to know, if you see a market correction coming this summer, as some other analysts do. WACHTEL: You know, contrary to that, as I explained, I am looking for the July period when the second quarter earnings to be a very affirmative period for the market. My hiatus is now. Late May into the first several weeks of June. And then I think we'll be ready for a decent move in July. KANGAS: Now, from another viewer in Sydney, Australia, by the name of Susanto Sjaifuddin and I'm not sure of that pronunciation, but he does watches us on the SBS Network down under. And the question is, with more and more central banks selling gold and others holding more U.S. dollars, how will they hedge against any inflation and when do you predict gold might be bottoming out? WACHTEL: Gold has been a terrible investment, Paul. And because we have had such a benign inflation environment, and there is always that threat of central banks selling of gold so while it looks like it may be bottoming here temporarily, I don't know the next central bank that makes that announcement. Meanwhile, as a hedge against the inflation that never seems to appear, it doesn't make sense. So I am down on gold. KANGAS: All right. And what re you most up on what right now? What stocks? WACHTEL: Well, you know, I'd be fishing in some troubled waters, the PC area, the personal computer area has gotten pounded down and I think it's time to begin taking a stand. KANGAS: What's your favorite in the group? We just have a few seconds. WACHTEL: Well, Dell and Compaq would be two names there. I would be buying semiconductor stocks that apply to the telecom and the Internet, LSI Logic (LSI). And I think some of the drug stocks have appeal. I'm very impressed with the relative... KANGAS: They came back today as a matter of fact. What's your favorite in the group quickly? WACHTEL: Well you know the relative performance of Bristol-Myers (BMY) is impressive. That would be my favorite. KANGAS: Larry, thanks very much. WACHTEL: OK. KANGAS: My guest, Larry Wachtel, senior vice president of Prudential Securities.