Index

Instead of writing my clients individually I thought I might as well
do a weekly summary of my views on the markets, the currencies,
the economy, the world, and life in general.
 

First of all, the question that interest most investors is whether we are
going to have a correction, a crash, or a summer rally.  Most European
markets are making new highs everyday nowadays.  The fundamentals are
favorable: the interest rates are low, (Italy, Spain, Portugal, Greece
etc. all have historically unheard of low rates) the economy is
picking up steam but nowhere near overheating as is the case in
US, the feeling of relief that the euro is becoming reality, the reasonably
high dollar exchange rate, the view that European economy will be
less impacted by Asian weakness, the global liquidity seaking safe havens,
the aging European boomers entering equity markets for the first time, and
so on.   There are two big worrisome factors though:  the collapse of
Asian economies especially the Japanese one and the possible steep
correction on Wall Street.  Wall Street remains the leading market.
The saying goes  when Wall Street sneezes, the European markets
catch a cold    remains true no matter how positive the fundamentals
are.  But will Wall Street rollover?  I don't think so.  First and foremost,
the Fed is on hold.  Fed is, after all, the central bank of the world.  With
Asian markets and economies totally down, Eastern European markets
shaky and Latin American markets jittery, I doubt Greenspan is willing
to risk a total collapse of the world financial market.  As long as the Fed
is on hold, Wall Street will not collapse.  Corrections will probably be
rotational and limited to about 7 to 10% range.  After last Fridays action
I tend to think that Wall Street will be rangebound between 8800-9300 on
the Dow.  Therefore there is still possibility for the European markets
to rally further. Go to Index
 

Our favorite stocks remains SAP, Nokia, Raisio Group, Ericcson, Cable and Wireless and Baan. * 
 
 
 

High of the Year Low of the Year Stock Daily high Daily low Close HFl.  108.70 62.60 Baan 90 88.20 89.50 Gbp  8.13 4.67 C&W 7.22 7.11 7.20 SFr.  44 25 Ericsson 43 42 42.50 FIM  378 182 Nokia 363 352.50 362.50 FIM  1080 640 Raisio Group 930 895 930 SFr.  785 419 SAP 805 789 805 SFr.  440 416 Straumann 420 410 413

 
 

On the Swiss market Straumann came out on an IPO.  This maker of dental implants should be a good solid grower.  The world demographics show that
more and more people will be over 60.  And they need new teeth.
Implants are becoming more and more popular.  Straumann has
a problem though.  It's an extremely tiny company.  The stock will
not be very liquid.  It currently trades at  about SFr. 413.  (IPO price: SFr 360)
I rate it a buy.  But small amounts only!

Baan has a bit of a problem because of a change in their accounting
practices of recognizing revenues.  I assume they will sort out this
problem soon and that business is still great.  At this time Baan is
definitely a buy. Go to Index
 

Which way will the dollar go?  As long as the Asian crisis persist, I doubt
the dollar will weaken substantially against the Swiss Francs and European
currencies.  Unless the Fed raise the interest rates, the dollar could have
problems maintaining its strength against the euro and Swiss Francs next
year.  The European economy is heating up.  The new European Central
Bank will have to raise the interest rates, if it is to be regarded as a credible inflation fighter by the world bond and currency traders. Go to Index
 
 
 

*The stock prices are provided for informational puruposes only and  not intended  for trading purposes.  The opinions expressed in these pages are what they are: opinions!