Stock Smarts: Worst To First!
From worst to first – the bear market’s biggest losers have been big winners lately. From the market’s peak in March of 2000 to the five-year low on October 9, 2002, tech and telecom stocks fell twice as much as any other sector. But since that low both sectors have come back twice as big as the rest of the market:
High to Low
So is now the time to bottom-fish if you want to come out on top?
Jason Trennert of ISI Group says a couple of weeks ago you could have bought almost any tech or telecom stock and seen gains, because the sectors had been so oversold, but now you have to be more selective and look for quality stocks if you want to buy in these sectors. He says now is the time to cash in on recent profits in troubled companies like Lucent (LU) and buy companies that are leaders in their markets like JDS Uniphase (JDSU) which he has been buying.
Dagen McDowell of FOX Business News says some areas of tech still look good like companies that sell into the PC business but telecom equipment makers binged on spending in the late nineties and she would not be a buyer of these right now.
Hilary Kramer of Montgomery Asset Management says the Internet is going to create new winners which might not include Lucent or JDS Uniphase in technology. She says we have to think about the defense sector when we talk about technology and she says Northop Grumman (NOC) and United Technology (UTX) are technology stocks she likes.
Jonathan Hoenig of Capitalistpig Asset Management says you have to pick your theme in tech and not chase fads. He is buying international telecom like New Zealand Telecom (NZT) and Koninklijke KPN (KPN), a telecommunications company in the Netherlands. He says pick a theme and stick to it.
Wayne Rogers of Wayne Rogers & Co. says the tech and telecom gains we are seeing are in stocks that have been decimated, and betting on stocks like Lucent is still very speculative. He says the rally in tech and telecom is purely driven by short covering and he isn’t buying into it.
Mutual Fund Face-Off: Buy Now and Sell Later
History says the period from November through April is the best time of year to make money in the market. So which mutual fund will make you the most over the next six months? Dagen and Jonas make some picks.
Dagen – Transamerica Premier Equity Fund (TEQUX)
Year-to-date (as of 11-1-02): DOWN 24.7 percent
Minimum Investment: $1,000
Expenses: $13.4 0 a year
Jonas – Wasatch Global Science & Technology Fund (WAGTX)
Year-to-date (as of 11-1-02): DOWN 34.4 percent
Minimum Investment: $2,000
Expenses: $19.50 for every $1,000 invested
This time last year our crew picked stocks they said would make money in a tough post September 11 market. Were they right?
Hilary's Cash Count: Unilever (UL)