Stock Smarts: Nasdaq now?
More than 3000 points — that’s how far the “tech-wrecked” Nasdaq has fallen since its high-water mark two years ago.
March 10, 2000
But take a look at how it’s done compared to the Dow and S&P 500, since our world changed on September 11:
Dow Up 10.1%
S&P 500 Up 6.6%
Nasdaq Up 13.8%
Since September 11, 2001.
No question that technology is helping us win the war. So will tech stocks once again help investors win?
Jonathan Hoenig of Capitalistpig Asset Management says that it is important to realize that tech and the Nasdaq are two separate things. He says there are plenty of non-tech names in the Nasdaq that look good — from financials to pharmaceuticals to some service oriented businesses. He does not believe the recession is over yet but thinks there is money to be made in selective stocks in these sectors and in foreign companies that trade here.
Dagen McDowell of Fox Business News thinks that investors really need to see corporate spending come back in order to get back into tech, and that hasn’t happened yet. She is positive on chip (semiconductor) stocks, although she says they are still expensive. She also likes the defense sector.
Adam Lashinsky of Fortune magazine is not really bullish on tech. He says tech stocks fell so far they had to come back a bit. Like Dagen, he believes the recovery is limited until we see greater corporate spending. Still, he points out that technology stocks are becoming cyclical and believes that it is possible to make money buying and selling reasonably priced stocks.
Hilary Kramer of the Cisneros Group says there are all different kinds of tech stocks that aren’t considered traditional technology plays (like defense stocks), and to make money investing in tech, Investors really have to reevaluate what tech really is.
Jonas Max Ferris from Maxfunds.com says that mutual fund investors are not putting money into tech, but rather looking towards value. He's says tech cannot sustain a rally until the market sees real corporate earnings. He's bearish on tech until then.
The panel picked their favorite tech stocks right now.
Hilary: Applied Materials (AMAT): Jonathan and Adam both like the stock.
Jonathan: Indonesian Satellite (IIT) (Jonathan has a position in IIT): Adam does not like the stock. He's worried about the lack of volume in this stock. Hilary likes the pick.
Adam: Taiwan Semiconductor (TSM): Jonathan and Hilary both like the stock.
Mutual Fund Face-Off
Panel: Dagen and Jonas
Topic: The Best Small Cap Fund!
Dagen: FMI Focus Fund (FMIOX)
Minimum Investment: $1,000
Expenses: $15.00 for every $1,000 invested
Jonas: Artisan International Small Cap Fund (ARTJX)
Minimum Investment: $1,000
Expenses: $25.00 for every $1,000 invested
Dagen and Jonathan wrapped up the show by answering some email questions from viewers:
Question: “Ford (F) stock is in the doldrums, but I like their cars and trucks. What’s the problem, and what’s the outlook for the future?”
Dagen: "Very limited upside to this stock."
Jonathan: Doesn’t love the stock, or any of the big automakers for that matter.
Question: “What causes a stock to split?”
Jonathan: "When a company thinks its share prices are too high, it will split the stock." He believes stock splits are a little shady.
Dagen: "Some people think it’s a bullish sign for a stock."
Question: “I currently own Fidelity Select Wireless Fund (FWRLX). I bought it at $10 and it's way down. Should I hang on?”
Dagen: "Wireless stocks will eventually come back, but it will take a while. So if you’ve lost patience, dump it."
Question: “I recently inherited a small amount of stock in Leggett & Platt (LEG). Is this a good investment?”
Jonathan: "Great stock, great charts. I don't own it but am thinking about buying it."
Dagen: "Strong earnings prospects for this one."
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