a knock. But local investors are being urged to hold on to their portfolios.

Ahmed ElAmin reports With global markets going ballistic what's an investor to think these days? It's confusing -- but don't feel too bad. There's always someone else who is doing worse.

Take the Bermuda-based Everest Capital which estimates it will have losses of about $300 million in the Russian debt securities markets in its global and emerging-markets hedge funds.

Fund manager president and founder Marko Dimitrijevic was philosophical about the projected hit.

"We are still not certain about the status of the rouble debt,'' he said yesterday. "It's a small part of our portfolio.'' The management firm is being conservative in expecting losses from investments in short-term rouble-denominated zero-coupon Russian Treasury bills, or GKOs, which were suspended last week by the Russian government.

The global hedge-fund has suffered a decline of about 40 percent for the year to the end of August. Mr. Dimitrijevic looks at the fall as part of the nature of the hedge fund. The fund suffered losses in 1994 and fully recovered in subsequent years and was up 60 percent in 1996 and 29 percent last year.

"We are very defensive right now,'' he said. "The world is in the midst of a global credit contraction....It's a difficult period. We are continuing to monitor the markets. We are in business for the long haul.'' Word on the street is Oppenheimer Bermuda Ltd. also suffered large losses in emerging markets. That's one reason given as to why the fund bailed out of Bank of Bermuda stock. It needed the cash and sold holdings of 453,652 shares in one block at a discounted $27.50 two weeks ago to raise about $12.5 million.

Oppenheimer investment analyst Brian Way didn't even want to talk about what was happening in the markets when asked for comments on current volatile conditions.

Anne Kast of Kast Investment Management said she doesn't expect the Dow Jones industrials, a key US index, to fall much beyond the 7,500 mark. The Dow fell about 1,000 points in the five trading days to Monday. Yesterday the Dow had risen about 300 points to close at about 7,800.

She's telling investors not to sell their portfolios but to hold.

"I would like to think the fall is over in the US market,'' she said. "The background fundamentals are good. I think the worst is over. Analysts have been saying that 7,500 is about the bottom. If you say 6,500, to me that looks too low given the fundamentals.'' Jeffrey Brewer, managing director of Case International, also believes the US market has hit close to the bottom. He was working on Wall Street when the market crashed in 1987 so he has seen this kind of free fall -- or "correction'' as analysts term a downturn in what are seen as overpriced equities.

The difference then was interest rates were up and inflation was a problem.

Today interest rates are down and deflation is the main worry. So it's hard to judge what's going to happen.

"Most of us haven't been around in a period of significant disinflation,'' he said. "History often changes and we have to anticipate a period we have not seen before.'' Yesterday Mr. Brewer sat in on a teleconference with Merrill Lynch advisors and all had negative views about the US mainly because of the economic difficulties faced by trading partners.

Because of the difficulties overseas, US exports will suffer. Japan, Canada and South America are facing major problems.

"We are in a period of significant economic slowdown,'' he said. "Corporate profits are likely to decline. What we are seeing is a major setback in the stock market.'' The declines started happening over six months in the broader US stock markets. Second tier stocks were considered overpriced and the market took a correction. A lot of stocks fell 40 to 50 percent. It has taken until now for the blue chip stocks, the major companies of the index, to follow suit. Hence the large recent declines in the index.

"In the broad market the worst is behind us,'' he forecasts. "We will probably see more downside in the blue chips. It's very similar to someone who has a heart attack. You see a lot of volatility leading up the event.'' His strategy is to look for the good second tier stocks that have fallen and buy them.

"You have to selectively buy things that have been hit hard,'' he said.

"Over the longer term we are getting pretty close to the end of a significant correction. I don't think there is much more downside in the broader market.'' Ann Kast