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    Bulls & Bears

    Brenda Brenda was joined by: retired U.S. Marine Corps Lt. Col. Oliver North, host of "War Stories"; Gary B. Smith, RealMoney.com columnist; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; Adam Lashinsky, senior writer at Fortune magazine; and Jeff Macke, president of Macke Asset Management.

    Trading Pit: Election Rally?

    Sunday was an historic day in Iraq. It was the country's first true election in about half a century. Over 80 percent of Iraqis planned to vote. The world was watching, and so was Wall Street. But will these elections work?

    Col. North: I’m bullish on the Iraq elections! In my opinion, these elections have already been a success for three reasons: 1) The terrorists have tried very hard to prevent them from happening. 2) Over 17,000 Iraqis have registered as candidates. 3) Women are going to turn out in enormous numbers that will change the region forever. This election will be followed by another election, and then a third election. We won’t see any significant amount of troops withdraw from the region until after the third election. In the last election in the United States — where the only danger was waiting in line in the rain — only 50 percent of the population bothered to vote. In Iraq, people are going to have to deal with real dangers: bullets, threats, and intimidation by terrorists and former Baathists. But Iraqis will go to the polls.

    Gary B.: I agree with Colonel North. If the elections are successful, and if everything he says comes true, the effect on Wall Street will be very positive. The market is in a good position to rally. Its recent pullback was just due to some profit taking from the good quarter we just had.

    Adam: I also agree with Colonel North! I don’t think Wall Street has any more jitters about this election than it has had over the past several months. It’s a very difficult situation. But for investors, this election isn’t going to change much for tomorrow or next week. If it does make any changes occur, they won’t happen until months down the road. However, Wall Street would be very interested if our troops can pull out, especially after the third election, like Colonel North mentioned.

    Tobin: This election is good for the market unless a civil war breaks out. Iraqis are proud they’ll be able to vote. But they will be taking risks and there are going to be people killed voting. These elections are good because they make things more difficult for the people who are fighting the spread of democracy. And that’s a plus for stocks.

    Jeff: Elections in Iraq make me feel better as a human being. However as an investor, I feel as though it’s a “sell the news” kind of story. Over the summer, the handover of power to the Iraqis was supposed to be huge. People were buying stocks because things were going to take off. But it happened in the basement in the Baghdad Marriott or some place and they had to do it on the sly because the country wasn’t yet put together.

    Scott: Americans have set very, very low expectations for the Iraq election. I think anything less than a complete disaster will be deemed a success. Stocks sold off due to the big rally we had at the end of last year, the fear and trepidation leading into this election, and because oil prices have spiked back up to almost $50. I believe this fear will be removed, oil prices will come down, and stocks will bounce.

    Stock X-Change

    The White House wants $80 billion more to fight terror in Iraq and Afghanistan. Toby, Scott, and Jeff each picked the stocks that will get a big boost if that money is approved.

    Scott: I think United Defense Industries (UDI) will benefit from this money because it makes armored vehicles like the Bradley armored infantry vehicle. Humvees have been a disaster, whether they’ve been armored or not. Our troops need the best and need to have vehicles that don’t have tires that burn. The stock is cheap as well. (United Defense Industries closed at $47.08 on Friday.)

    Jeff: I think it’s good, but there are more exciting stocks to buy.

    Toby: I like it because they’ll grow through acquisitions.

    Jeff: I think Alliant Techsystems (ATK) will get a boost because if we’re going to be in Iraq, we’re going to be firing guns and this company makes bullets. (Alliant Techsystems closed at $66.65 on Friday.)

    Scott: This company also makes a lot of things for space exploration, and that has been a big drag. It’s also a bit on the expensive side.

    Toby: I don’t like it. The stock is way too expensive.