Stock Smarts: State of the Stocks!
Monday could be Saddam’s last chance. Then on Tuesday a presidential address that some are saying will be a call to arms, as thousands of our troops move into the gulf. And through it all, President Bush continues to pitch a tax plan the White House hopes will jump-start Wall Street and the economy.
So should you be buying, selling or sitting on your hands right now?
Dave Nelson of DC Nelson Asset Management says that it is an important week with the U.N. report on Monday and the state of the union on Tuesday. He knows that President Bush will say that the state of the union is strong. But Dave thinks that the economy is not – he says it’s tepid at best. The blame for the weakness in the markets should not be on international problems, but on the economy.
Dagen McDowell of FOX Business News says that the cautious outlooks we have been getting from companies is bothering investors. But if there is a resolution to the Iraq conflict within the next few months, then she thinks will see the economy pick up. She also says to be careful with gold as an investment, as there has been so much money put in already.
Jonas Max Ferris of Maxfunds.com says he fears that the early run up in stocks at the start of the year was based on anticipation of good earnings reports that did not materialize. Now that the reports are starting to come in to the negative side, stocks have been forced to pull back. But Jonas thinks the economy is in better shape than many think. As an example he cites the fact that places like Starbucks can charge $4.00 for a cup of coffee. In terms of the discussion on gold, he points out that gold is not a stock, and it doesn’t have to meet earnings – it’s just a collectable.
Wayne Rogers of Wayne Rogers & Co. is still bearish – but thinks there are still selective stocks to buy right now. He does not trust the overall market averages. He has taken some profits off the table selling some Nortel (NT) and Yahoo! (YHOO). He says when there are times of uncertainty, there is a flock to gold. But he prefers to play gold stocks as opposed to the commodity itself.
Jonathan Hoenig of Capitalistpig Asset Management is worried about the big decline in the Dow and the fact that no one is talking about it. The Dow is a very weak market, with big-time stocks like ATT (T), McDonalds (MCD) and Pfizer (PFE) really hurting the average. He says that 3M (MMM) is the only strong Dow stock right now. And for him, gold is still the place to be.
Best Bet$: “Great Shape” Stocks!
The state of the stock market might be shaky, but what are the individual stocks that are in great shape to buy right now? Our crew offered their best bets.
Wayne's "Great Shape" Stock: Plains All American (PAA)
52-week high: $27.30
52-week low: $19.50
Friday's close (1-24-03): $25.41
Wayne says this stock pays a 9 percent dividend, and has a very strong balance sheet. Dave likes the stock. Jonathan thinks this is a great way for investors to play commodity prices. Wayne does own this stock.
Dave's "Great Shape" Stock: Constellation Brands (STZ)
52-week high: $32.00
52-week low: $21.99
Friday's close (1-24-03): $25.69
Constellation markets Corona beer and Paul Mason wines. Dave owned this stock last year, but got out when the liquor industry headed south. He recently bought back in to STZ but he is shorting Budweiser (BUD). Jonathan likes STZ’s product, but is worried about the weakness of the group in general and doesn’t’ think the stock is a buy. Wayne likes STZ as a long-term play.
Jon's "Great Shape" Pick: Aberdeen Asia Fund (FAX)
52-week high: $4.97
52-week low: $3.92
Friday's close (1-24-03): $4.94