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COWEN & COMPANY PREDICTS: ITS TIME FOR A BILL CLINTON STOCK PORTFOLIO; DJIA TRADING RANGE AT 3750 IN 1993

COWEN & COMPANY PREDICTS: ITS TIME FOR A BILL CLINTON STOCK PORTFOLIO;
 DJIA TRADING RANGE AT 3750 IN 1993
 NEW YORK, Oct. 5 /PRNewswire/ -- Anticipating a Bill Clinton victory in the upcoming presidential election, Cowen & Company strategists recently decreased their portfolio by 7 points in healthcare stocks and increased energy stocks by a similar amount. Cowen remains underweighted in defense stocks.
 "The cyclical economic recovery in the U.S., Japan and Europe, and the recent devaluation of the dollar make energy stocks extremely attractive," said Richard J. Hoffman, chief investment strategist. "We are underweighted in defense stocks because there is a consensus for lower defense spending."
 The Clinton portfolio also includes:
 -- Stocks over bonds -- because the economic pendulum has swung to reflation.
 -- Physical, communications, human resource and infrastructure stocks -- as Democrats support a larger government role for managing structural economic problems.
 -- Low and middle-end providers of retail consumption -- as the Democrats favor a tax cut for the middle classes.
 -- Firms with high revenues and profits per worker, and "outsource"
providers of labor. The Democrats want companies to bear the expensive burden of broader healthcare coverage and job training.
 -- Alternative, less expensive forms of healthcare, and companies which make healthcare development and delivery more efficient -- giving the aging of the population.
 Regardless of who wins, however, Cowen predicts that the government will be more proactive through fiscal stimulation programs, eventually leading to increased inflation and higher interest rates, ultimately justifying currently high real bond yields.
 "When push comes to shove most Americans will choose the consequences of a 'little' inflation over deflation as the country becomes increasingly frustrated in its struggle to maintain a falling standard of living," Hoffman said, in findings released today.
 The economy will not undergo a triple-dip recession, according to Steven R. Resnick, senior investment strategist.
 "Corporate America has tremendously strengthened itself through a brutal deleveraging of balance sheets and restructuring, and companies have benefited from low interest rates," Resnick added. "Companies -- and banks -- are in much stronger shape than has been recognized. The foundation is in place for a moderate economic expansion, but we need to ignite consumer confidence."
 Hoffman/Resnick's research of key trends illustrated:
 -- $800 billion in new bond and stock issues projected for this year.
 -- Over 60 percent of the S&P 500 companies reported higher margins in the second quarter 1992 than in second quarter 1991.
 -- 1992 should be a banner year for bank profits. The ratio of bank capital to assets has returned to 1966 levels.
 -- For non-financial corporations, the ratio of current to total


liabilities is back to the level of 1981.
 -- There has been a sharp improvement in housing affordability, with levels back to almost 20 years ago.
 -- The fiscal pendulum is swinging toward growth. The unofficial unemployment rate of 13 percent is more of a problem than the 3 percent inflation rate.
 Despite the strength in corporate America, consumer confidence is low because there is a new world, characterized by many unsettling "D-words", Hoffman/Resnick said.
 "Dislocations caused by demilitarization of the economy and deleveraging of the banking system and corporate balance sheets, darkness in commercial real state, deflation of the Japanese assets bubble, and the increased dominance of the D-Mark," Hoffman/Resnick added.
 Cowen is a privately-held securities and investment banking partnership based in New York City, with research and investment banking offices in Boston and San Francisco. In corporate finance, Cowen is one of the top 10 underwriters of equities in the healthcare and technology sectors. The firm also has a significant presence in correspondent services and assets management. Cowen's more than 1,200 employees serve its institutional and individual clients domestically and internationally through 18 offices in the U.S. and abroad. Cowen has more than $240 million in revenues and $90 million in capital.
 -0- 10/5/92
 /CONTACT: Surya Shah of Edelman Public Relations, 212-704-8172, for Cowen & Company/ CO: Cowen & Company ST: New York IN: FIN SU:


SM-TS -- NY032 -- 6505 10/05/92 10:44 EDT
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Date:Oct 5, 1992
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