What a market. WHAT A MARKET!!!

I've been investing since 1949 (wow), and neither I nor anyone else has ever seen a market this powerful, this relentless. Short sellers, naked call sellers, and all-around Bears have been unceremoniously deposited in the dumpster. This is what they mean by "the trend is your friend". You will notice that all the guys who like to stand in front of freight trains never get to die of old age.

That said, what do we do now, with favorable earnings, interest rates, and inflation on one hand, and almost ridiculous P.E.'s and non-existent earnings on the other? Sure, this party will end someday, but it never pays to try to predict when that will be. Several years ago, the all- knowing, all-seeing Fed Chairman Greenspan made his infamous "irrational exuberance" comment. Those investors who grabbed their pennies off the table and ran, are now out many thousands of Dow points. Believe me, if he can't do it, you can't either. The fact that Bearish market gurus are able to keep selling newsletters, is one of the great wonders of the modern world.

If you own those big growth stocks with high earnings growth and good prospects, I would continue to hold them. There are quite a number, but of the stocks I follow, they would include Cisco, Lucent, Microsoft, Pfizer, Qualcomm, and MCI WorldCom. Before investing any new funds in these stocks, I would have to see some price reduction. Even in great markets, stocks will fluctuate, and with a little luck you might be able to buy these great stocks at a good price.

Beyond that, I like Citigroup and Chase Manhattan. With interest rates beginning to decline again, financial stocks will benefit. Additionally, these two stocks have a lot of benefit to wring out of their mergers, and that does go for Chase, even though their merger with Chemical Banking was three years ago last month.

As always, I have a fondness for stocks that I believe have unrecognized value. When you hear of a stock that seems interesting, get their phone number from any of a number of reference books. I call Investor Relations, tell them I'm a private investor interested in investing in their company, and ask for the following:

Investor Relations Questions Put me on your mailing list. Annual Report and 10-K (annual filing with the S.E.C.) Quarterly Reports and the latest 10-Q (quarterly filing with the S.E.C.) News releases since their last Annual or Quarterly Report Broker research reports Consensus analysts' estimates of their earnings per share and revenues for the forthcoming quarter and the year ahead. Regarding #6 above, I ask if they're comfortable with those estimates. The date and time of their next earnings release. Regarding #8 above, I ask if I can participate (listen only) in their conference call with analysts following their earnings release.

If you obtain this kind of information, and track the stock price daily along with breaking news, you will be on a pretty good footing vs. other investors. There is no substitute to doing your homework. Stay tuned.

The Market Pro - April 12, 1999