• Stock Smarts: Give It Back?

    $1,133 – that’s how much federal tax cuts (search) saved a family of four with an average income of $50,000 this year.

    Some democrats on the campaign trail want to take that money back. So what would a tax cut reversal do to the economy and the stock market?

    Wayne Rogers of Wayne Rogers & Co says a tax cut reversal would hurt the economy and the stock market, and he believes that any Democrat who runs on that proposal will bury himself.

    Gretchen Morgenson of the New York Times says reversing tax cuts will stop the economy dead in its tracks. She says we are inching forward in a very slow economic recovery and reversing tax cuts would kill any chance of complete recovery.

    Dagen McDowell of Fox Business News says the tax cuts are set to expire over the next couple of years, and she says they should expire to help take care of a burgeoning deficit. She says as Baby Boomers retire they are going to want Social Security and Medicare and raising taxes would help pay for that.

    Hilary Kramer of A&G Capital says the tax cuts did their job and got the economy rolling and if they were taken back that would help stem the growth of the deficit which would ultimately be good for the stock and bond markets.

    Jonathan Hoenig of Capitalistpig Asset Management says reversing the tax cuts would be very bad for the market. He believes the best way to stimulate the economy is to let people keep more of their money.

    Be$t Bets: Storm-Proof Stocks

    We are fighting a war on terror while battling a sluggish economy, and we just weathered a hurricane! So, what are the stocks that stay tough no matter how rough things get?

    Jon’s “storm-proof” stock: Turkcell (TKC)

    Friday's close (9-19-03): $18.50

    Jonanthan says the storms in Turkey are already in the past, and Turkish stocks are on a roll. He owns Turkcell which he says is strong in the charts. Wayne says with the Kurds in the north, he doesn’t think the storms are over in Turkey yet, and this is not a stock he would say is “storm-proof.”  He says there are better places to get shelter from storms. Jonas says half the value of emerging markets stocks is that they are cheap, but this one is not. He wouldn’t buy it.

    Jonas’ “storm-proof” stock: NetGear (NTGR)

    Friday's close (9-19-03): $17.20

    Jonas says the next “storm” he sees on the horizon is the storm in overpriced tech. He says the only “storm-proof” tech stock is one that is undervalued and will surprise the market with solid growth. That’s why he likes NetGear. Hilary says she needs to see a longer history for this company before she’s a buyer. Jonathan says there’s not a lot of price history to get a good read in the chart, but tech has been strong lately, and he wouldn’t bet against NetGear.

    Hilary’s “storm-proof” stock: Teva Pharmaceuticals (TEVA)

    Friday's close (9-19-03): $59.45

    Hilary says this is the largest generic drug maker, and it has survived all the storms in Israel. She owns the stock. Wayne likes the company but he doesn’t think this stock is “storm-proof” because it is located in Israel. Jonathan calls Teva a strong stock in a strong sector.

    Wayne’s “storm-proof” stock: Leucadia National (LUK)

    Friday's close (9-19-03): $38.19

    Wayne says this is a well-diversified company that is well managed with a stock that doesn’t move too fast, but always moves up. Jonas doesn’t like the fact that it is a conglomerate. Jonathan likes some of the assets this company holds, and he thinks the stock will do well.