• Stock Smarts: Waiting For War

    Who holds the key to what happens to your money? It may not be Fed chairman Alan Greenspan – maybe not even President Bush or the Congress. As the stock market waits for war, the men to watch are Chief U.N. Weapons Inspector Hans Blix and Saddam Hussein. What Blix finds and whether Saddam cooperates could make the difference between war and peace.

    If this drags on without a clear resolution, will it pull stocks down?

    Meredith Whitney of Circle T Partners says she thinks until there is some conclusion to the Iraq situation the market will remain “range bound”  -- trading within a tight range with no significant trend up or down.

    Hilary Kramer of Montgomery Asset Management thinks the market will continue to rise now that investors see a united coalition with U.N., NATO, Congress, and voters all backing President Bush’s efforts to disarm Iraq.  She’s buying mid and small cap stocks like Panamerican Beverages (PB).

    Jonathan Hoenig of Capitalistpig Asset Management says we are in a trader’s market.  He says, “This is not a market in which you want to sit around holding the major indices.”   But he points out that some individual sectors like Internet stocks are up 100 to 200 percent and some smaller names as well as some emerging market names and telecom are also up.  He says, the market is rewarding risk and you can trade these stocks and make money, but you can’t buy and forget them right now.

    Wayne Rogers of Wayne Rogers & Co. says the market hates uncertainty and so he agrees with Jonathan and doesn’t expect the broader indices to rally.  Like Jonathan, he believes the way to profit now is by trading smaller individual names (with market caps below $500 million).

    Jonas Max Ferris of Maxfunds.com doesn’t think the market is waiting for anything.  He points out that the broad indexes are all up 20 percent form recent lows and he thinks investors are jumping in so they don’t miss the boat.   He says the market’s searching for earnings right now, not waiting for bombs.

    Mutual Fund Face-Off: Turkey Funds

    Unfortunately,  turkeys aren’t just served on Thanksgiving. Occasionally you get a few on this program. What were the biggest turkeys in our mutual fund segment this year? Dagen and Jonas went hunting and picked each other’s worst call of the year.

    Dagen’s Turkey: ABN AMRO Veredus Aggressive Growth Fund (VERDX)

    Since 2-4-02: DOWN 34.5 percent

    Minimum Investment: $2,500

    Expenses: $14.00 for every $1,000 invested

    Jonas’ Turkey: Payden Europportunity (PEAGX)

    Since 2-4-02: DOWN 38.7 percent

    Minimum Investment: $5,000

    Expenses: $10.50 for every $1,000 invested

    Homeland $ecurity Stocks

    The new Department of Homeland Security is in motion – set to protect us from future terror threats. And with a budget of nearly $38 billion, the government has some cash to spend. What stocks will benefit?

    Hilary's $ecurity Stock: Raytheon (RTN)         

    52-week high: $45.70

    52-week low: $26.30

    Friday's close (11-22-02): $29.05