Stock Smarts: Scared Stockless
We are fighting a war. The Enron collapse and subsequent congressional investigation is dominating the business headlines. Kmart declares bankruptcy. And the layoffs continue to pile-up. All this adds to a market climate that screams bear.
Should you buy stocks?
Hilary Kramer from the Cisneros Group says yes. There is always opportunity out there, and she warns that a “herd” mentality for investing is not good. Over the long term, the economy is going to get better. She specifically mentioned Dupont as a stock she is going to buy.
Charles Payne of Wstreet.com is concerned that there are more problems like Enron looming, and that the markets tend to be “emotional.” He is also wary of a double-dip recession. He still sees some buying opportunities, however.
Dagen McDowell of Fox Business News still thinks that many stocks are way overpriced. But there are some sectors that interest her, such as restaurants and the railroads.
Jonathan Hoenig of Capitalistpig Asset Management thinks that now is the time to buy stocks, but not the time to buy all stocks. You must be a stock picker in this market, taking a look at the individual stocks, as opposed to broad sectors and markets.
Jonas Max Ferris of Maxfunds.com is still skeptical of poor earnings. He thinks that it is time to look for more low-risk alternatives to stocks as investments.
Some members of the panel came up with some stocks to look at, even when things seem so bad and you don’t feel like buying stocks at all.
Charles' pick: Kopin (KOPN). Jonathan does not like the stock; Hilary thinks it is a good play.
Hilary's pick: Teva Pharmaceutical (TEVA). Jonathan likes the stock, but is concerned due to the fact that the company is based in Israel; Charles says you shouldn’t worry about that, it’s a good play.
Jonathan's pick: Templeton Emerging Markets Income Fund (TEI). Charles and Hilary do not like this pick. They say there is too much risk in emerging markets bonds.
Mutual Fund Face-Off
Panel: Dagen and Jonas
Topic: Best Janus Alternative. We received an e-mail from a viewer telling us that he wanted to get out of his Janus Fund. He was looking for a good alternative. Dagen and Jonas faced-of over their favorite Janus Fund alternatives.
Jonas: Marsico Focus Fund (MFOCX)
Minimum Investment: $2,500
Expenses: $12.70 for every $1,000 invested
Dagen: Smith Barney Aggressive Growth Fund (SHRAX)
Minimum Investment: $1,000
Expenses: $11.40 for every $1,000 invested
Dagen and Jonathan wrapped up the show by answering some e-mail question from viewers:
Question: “Have you heard anything about the gains in options after the terrorists attacks and whether they had links to the terrorists?”
Jonathan: If there was anything that came up, we would have heard about it by now.
Dagen: These kinds of investigations can take years.
Question: “What's the difference between Lucent and Enron?”
Dagen: Enron is bankrupt, Lucent is just going through some tough times.
Question: “When a company declares bankruptcy, what usually happens to its stock?”
Jonathan: You can still buy a company’s stock when it is bankrupt, but it is a very speculative play.
Dagen: Buying stock in a bankrupt company is not investing, it’s gambling.
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