DISCLAIMER: THE FOLLOWING "Cavuto on Business Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cavuto on Business Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Neil Cavuto was joined by Gregg Hymowitz, founder of Entrust Capital; Ben Stein, author of Yes, You Can Time the Market!; John "Bradshaw" Layfield, author of Make More Money Now; Adam Lashinsky, senior writer at Fortune magazine; Meredith Whitney, Fox Business News contributor; and Lis Wiehl, Fox News legal analyst.
More for Your Money
Neil Cavuto: Is being too cautious costing you money? Nearly three years after the bubble burst, plenty of investors are still too gun shy to jump back into stocks (search). And they've missed out on some big profits as a result. So, is it time to stop crying and start buying to get more for your money?
John "Bradshaw" Layfield: Now is the time to get in the market. It would've been better in the summer but the S&P is trading at 18 times future earnings. The only thing the bears were hanging their hats on was job creation and now we're seeing that. It's a great time to get in the market.
Gregg Hymowitz: With the tepid job creation, you're still seeing the market not react that well to the news. That leads me to believe that a lot of this is already priced into the market. If you're going to step into the equity markets, I think you want to do it gingerly.
Neil Cavuto: So you would be cautious?
Gregg Hymowitz: I would be cautious. Multiples are expensive and interest rates are going higher.
Ben Stein: Prices for S&P 500 stocks are high right now. Not too high, but high. The Dow is not a bad buy right now. If you're willing to be a long-term holder, now is the time to get into the Dow.
Meredith Whitney: You should have a lot more comfort getting into the market. One of the things that scared people in the last internet bubble was you could buy your babysitter an IPO because there was so much excess capacity. But inventories have been drawn down to very low levels. And companies have much better balance sheets and you're on the brink of an economic expansion as opposed to a peak in the economic expansion.
Neil Cavuto: But Gregg, I remember coming out of the 1987 crash and investors were saying, even at these levels the market is still rich. So those who were cautious then, regretted it later.
Gregg Hymowitz: The time to be aggressive was back in the summer. The fact is, a lot of the great news is priced in. You would've expected the market to pop after these job growth numbers came out on Friday, but it didn't.
Neil Cavuto: What would you be buying in this environment right now?
John "Bradshaw" Layfield: If you're cautious, stay with companies that earn a ton of money and that don't get too much debt. A stock like Microsoft (MSFT) is a poster child for this. I own it and like the fact that they have enough cash on hand to pay off California's debt and finance the next ten birthday's for Dennis Kozlowski's wife.
Ben Stein: I love and own Alcoa (AA). I think it is an amazingly well run company that has taken advantage of a lot of cost cutting opportunities. I also like the Dow Diamonds (DIA). The great majority of growth in stocks tends to come from dividends. I think for both income and capital gains, the Dow Diamonds look pretty darn good.
Gregg Hymowitz: The Dow dividends are 2 percent. You can get a much higher dividend somewhere else.
Ben Stein: You can. You can get them in a REIT fund or a utility fund. But I think the dividend plus capital gain will give you a half way decent return.
Gregg Hymowitz: I would look for cheap well-run companies like Abercrombie & Fitch (ANF). We own it. It trades at roughly 13 times next year's earnings. I think disappointing sales in retail have already been factored into the market. Most investors are betting on a strong Christmas. I think most people have already spent their tax refunds and that's why you saw retail sales come in weak.
Meredith Whitney: But again, retailers have kept their inventories very low. And what everyone has talked about are big cap companies. What has really brought a lot of the retail investors into the market were these little companies that were scary. What I recommend is Dow Chemical (DOW). I don't own it but it is a company that benefits from the global market recovery.
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