Neil was joined this week by Jim Rogers, president of Jim Rogers.com; Jason Calacanis, editor & CEO of Venture Reporter; Charles Payne, CEO of Wall Street Strategies, and Meredith Whitney, financial institutions analyst at Circle T Partners.
Signs of Hope
Stocks have fallen a long way from their all-time highs. But was the mega-rally on Wednesday and the high profile arrest of Adelphia’s ex-CEO John Rigas the turnaround signs we've all been waiting for?
Everyone agreed that widespread investor pessimism is a sign the market may be near a bottom. Jim also says the huge number of stocks hitting new lows versus new highs also indicates we’re close to the bottom. Meredith, Charles and Jason say new guidelines for executives to sign off on financial statements will help rebuild investor confidence. And All four guests agreed low prices will help bring investors back to the market.
Neil asked what stocks they think are too low to pass up right now?
Jim likes Chiquita Brands (CQB). Meredith recommends American Express (AXP). Charles recommends Johnson and Johnson (JNJ). Jason likes online ad companies DoubleClick (DCLK) and Overture (OVER).
A lot of investors are still holding onto a lot of stock losers, but instead of selling and locking in losses, is it a good idea to buy more at these depressed prices?
Charles says sell your losers! Even now it's not too late to sell. Jim agrees with Charles. You have to get out of the old stocks and get into new stocks, but you have to find out what the good stocks are right now.
Our guests answered three viewer emails asking if they should sell their stock. First up, was someone who bought AOL Time Warner (AOL) at $35 a share. Jason said he’s not sure if the stock will rebound back to $35, but he is buying it at its current price. He believes Time Warner is going to be worth $15 to $25, and that AOL will eventually be spun off and sold. Jim said he would sell AOL.
Another viewer asked if he should bail or ride out Dell Computer (DELL), which he bought at $33. Charles says to hold the stock and that it’s the best company in the business and will bounce back when tech spending rebounds.
The last one was Kmart (KM), which was purchased at $5 a share. Charles says sell it, because the retailer is too far behind the competition, not to mention it’s in bankruptcy protection. Jim says he doesn’t know enough about the stock, but if you really love Kmart, he would sell the stock, take the tax loss and buy Kmart bonds instead.
I say the media is only hearing and seeing bad news, and ignoring a lot of good stuff out there. Mike Norman, Publisher of the Economic Contrarian Update says the media is just reporting what it sees and hears when it comes to the stock market.
FOX on the Spot
Meredith says stocks roar back after August 14th!
Jason thinks new accounting scandals send stocks reeling!
Jim predicts New Zealand needs immigrant labor, but votes against them.
Charles thinks Martha Stewart comes clean on insider trading!
Neil says more arrests in corporate America are likely. Top WorldCom officials will be dragged away in handcuffs, as will top Enron and Global Crossing execs. Investors will like it and the market will rebound.