Stock Smarts: Stock Market Enemy!
Is the rest of the world betting against America? Most of Europe isn’t backing us up as we try to make the world safe from Iraq, and now we find out they are bailing out of our stock market. In 2002, the European Union added about $11 billion to the U.S. stock market. That may sound like a lot, but not when you realize they put in $84 billion just two years ago in 2000.
Are foreign investors wrong to be throwing in the towel?
Hilary Kramer of Montgomery Asset Management says that foreign investors are foolish to bail now. They think we are definitely going into Iraq, and that doesn’t sit well with them. But no matter what happens internationally, the U.S still has the strongest economy. However, Hilary does think that looking abroad with our investments makes good sense right now.
Dagen McDowell of FOX Business News says that in terms of foreign investors, Iraq is the key. It will be rough going until we actually do go into Iraq, but once that happens, the market will make a positive move, helping to bring back foreign investors.
Jonathan Hoenig of Capitalistpig Asset Management says it’s not the Europeans fault – no one says you have to be invested in U.S. stocks, and that’s the beauty of our free market system. Jonathan is looking overseas for some of his investments - both foreign stocks and foreign bonds.
Wayne Rogers of Wayne Rogers & Co. says that Europe suffers from an inferiority complex, and thinks that the foreign investors are really a non-entity. However, we do have an international economy, so we all are related in a certain respect.
Ned Riley of State Street Global Advisors says the foreign buyer is like the American retail buyer – both groups got in towards the top in 1998, and are now creating “irrational despair” buy bailing on the market.
The One Buy For 2003!
We asked our panel a simple question: if you had one stock to buy in 2003, what would it be? And the panel came up with some names that might bring you a happy New Year.
Hilary's One Buy: AIG (AIG)
52-week high: $80.45
52-week low: $47.61
Friday's close (12-27-02): $56.68
Hilary calls this stock the “800 pound gorilla” of the insurance industry, and the company’s size makes it the strongest in the sector – it should be a long-term holding. Wayne loves the stock (he owns shares). Ned likes the stock as well. Jonathan is not a fan.
Wayne's One Buy: Yahoo! (YHOO)
52-week high: $21.35
52-week low: $8.94
Friday's close (12-27-02): $16.58
Wayne thinks you could have a great gain percentage wise with Yahoo going forward in 2003. Jonathan agrees, and is seeing a little bull market in the Internet stocks, although he prefers the smaller Internet stocks. Hilary also likes the stock, but Ned does not.
Ned's One Buy: Nasdaq 100 (QQQ)
52-week high: $42.60
52-week low: $19.76
Friday's close (12-27-02): $24.79