Stock Smarts: $tocktober!
A tricky start to the month of October for sure. But since the market hit a five-year low on October 9, the month has been a real treat for stocks:
Dow -- Up 16%
Nasdaq -- Up 19%
S&P 500 -- Up 16%
(Since October 9, 2002)
So is it time to buy?
Jonathan Hoenig of Capitalistpig Asset Management says he’s still a bear on the big stocks in the major indexes, but he is selectively buying some smaller stocks. He thinks we are in the midst of a bear market rally, and not in a new bull market.
Hilary Kramer of Montgomery Asset Management is still bullish on the market and she thinks there are a lot of buying opportunities here, especially in the financial sector. She’s looking at brokerages and investment banks like Morgan Stanley (MWD) and Goldman Sachs (GS) which she says will benefit from an increase in mergers and acquisitions as the market recovers.
Jonas Max Ferris of Maxfunds.com thinks the October run-up in stocks was due primarily to the oversold condition of the market, but now that we’ve seen this move he says fundamentals will have to improve to keep it going. He thinks that the market may be driven for awhile by sidelined investors jumping back in out of fear they may be missing the recovery so he’s still positive in the short run.
Wayne Rogers of Wayne Rogers & Co. says it’s going to continue to be a choppy market and you will have plenty of opportunities to buy good stocks later on, but he’s still skeptical of the broad market right now, though he is buying selective stocks.
Gary Kaltbaum of Tradingpartners.com is bearish on the market. He says we are in a long-term secular bear market and while he would buy stocks like AutoZone (AZN) or Loews on a pullback, he is also skeptical of the overall market. He says we are experiencing a bear market rally right now and you have to be careful.
Buy Now or Beware?
The panel named some of the selective stocks they like right now:
Hilary Says: "BUY..."
SPX Corporation (SPW) *
52-week high: $151.45
52-week low: $86.55
Friday's close (10-25-02): $87.84
* Split Friday; pre-split values
Wayne says the stock dropped last week on big volume and he’s not a buyer. Gary agrees and says never buy a stock that gaps down like this one did; he says their revenues are going south. Jonathan says he’s bearish on this stock. Hilary owns shares in SPX Corp.
Gary Says: "BUY..."
The Southern Company (SO)
52-week high: $30.61