Stock Smarts: Best Bull To Come?
Usama bin Laden (search) is still out there, and he is still plotting against us. But you wouldn’t know that by looking at the market, as stocks have been on a steady rise since the lows before the was with Iraq:
Dow -- UP 25.9 percent
Nasdaq -- UP 45.9 percent
S&P 500 -- UP 27.2 percent
(Since March 11, 2003)
So what happens to this bull market if we finally get bin Laden?
Price Headley of Bigtrends.com thinks that getting bin Laden will be a “very bullish event,” especially considering how badly the market reacted to a new tape. There is still plenty of fear out there in terms of terrorism, but the stock market is plowing ahead. Price is concerned about the current scandals in mutual funds.
Hilary Kramer of A&G Capital says the capture or killing of bin Laden is bigger than the capture of Saddam, and it would be big for the market. Usama is the “head of the snake,” and we could have a “500 point pop” with his capture. And even though there are scandals out there, there is hope that things are being cleaned up
Jonathan Hoenig of Capitalistpig Asset Management says that this is a case of “buy the rumor sell the fact,” and we could see the market go down with the capture of bin Laden. Jon is no longer short the Dow. He thinks there are bigger factors than terrorism in play with stocks: higher interest rate, higher commodity prices and overall complacency. In terms of the scandals, he fears that government regulators will do more harm than good.
Wayne Rogers of Wayne Rogers & Co doesn’t think the capture of bin Laden really matters; it’s totally symbolic. The market is going to be driven by economic factors. He notes that the economy is turning around and that retail sales are up. He says the market might be a little bit ahead of itself, but it is still on solid ground. Wayne says there have been scandals “forever – it’s part of what goes on.” But in the end it will work itself out.
Jonas Max Ferris of Maxfunds.com says that there are positives in the economy, but we should isolate the bin Laden thing. The tape did hurt the market, so if we catch him, there will be no more tapes and that will be totally positive for the market. The threat of Al Qaeda (search) attacks will be much less with bin Laden out of the picture.
Be$t Bets: Bull Market Buys
If the best of the bull market has yet to come, then which stocks should you buy to get ready for the run? Our panel had the picks.
Hilary’s Best Bull Market Bet: The Limited (LTD)
Friday's close (9-12-03): $15.78
Hilary says that this is a “company that understands what women want and what men desire.” Also, the stock has a 2.5 percent dividend yield and it is expanding overseas. Jonathan doesn’t like the sector and doesn’t like the stock. Price would stay away; it’s not a bad stock, but it’s big cap, and he likes smaller stocks right now. He also isn’t too hot on the sector as a whole.
Price’s Best Bull Market Bet: Odyssey Healthcare (ODSY)
Friday's close (9-12-03): $33.79
This is a company that provides hospice care for the terminally ill. It is growing earnings 60 percent year over year, and is a leader in this industry. Hilary doesn’t like this play. Wayne loves the chart and likes the stock (as long as it continues to produce the earnings).
Jonathan’s Best Bull Market Bet: LanChile S.A. (LFL)
Friday's close (9-12-03): $10.70