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Bulls & Bears
Brenda was joined by: Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; Joe Battipaglia, chief investment officer of Ryan Beck Co; Bob Beckel, Democratic strategist, and Gary Kaltbaum, president of Kaltbaum & Associates.
Trading Pit: Bush Goes to Europe, Stocks go to Highs
President Bush making a crucial trip to Europe. If he takes steps to repair relations with the likes of France, Russia, and Germany, will stocks be ignited for the rest of the year?
Tobin Smith: If Bush can reduce the cost of rebuilding Iraq by getting some European help, it will help decrease the deficit. This will help investor sentiment and I think it’ll send the S&P 500 to a new high. The Dow has too many big stocks going through tough times to make a new high.
Bob Beckel: The “sheriff” is going to Europe, but he doesn’t have any bullets in his gun. The European Union is not going to put their Euros on the table to help us out in Iraq. This trip will be like an old Texas saying, “All hat and no cattle.”
Joe Battipaglia: Bush won’t compromise because he doesn’t have to. He doesn’t have to give in to the EU. Europe is in a corner. In certain times, it’s very important to have a strong president. It was important to have Reagan’s strength. And now, we need Bush’s strength. When we had weakness, like in Carter’s term, the stock market took a tumble.
Scott Bleier: This European trip will not lead the market to new highs. It also won’t do anything to improve our relationship with Europe. They won’t buy what Bush is selling. The EU thinks they’re hanging us out to dry, but in the end, we will win. The European countries are closer to socialism than capitalism.
Gary Kaltbaum: First off, we do not need to mend our relationships! Countries like France and Germany need to mend with us. I do not believe the EU meeting will cause the market to go up or down. There will be a lot of handshakes and rhetoric, but nothing earth shattering. Don’t forget, the EU leaders like German Chancellor Gerhard Schroeder and French President Jacques Chirac have to stand up to Bush, so they’ll look better in their own countries.
Pat Dorsey: This trip makes no difference either way. What matters is something like Social Security privatization, which could really have an impact on the deficit. If Europeans kick in some money for the reconstruction of Iraq, it won’t have a big impact on the deficit. There are bigger issues to move the market like production, earnings, and rising rates.
Accountability is big on "Bulls & Bears," so we reviewed the guys’ best and worst calls. First, the best calls:
Last September, when Martha Stewart was about to head to the big house, Tobin said, “Bet the house on her stock.” Since then, Martha Stewart Omnimedia (MSO) is up a whopping 178 percent! (Martha Stewart Omnimedia closed on Friday at $34.99.) Tobin sold his shares when it hit $35 and thinks that is what the stock is worth. He added that her reality show probably wouldn’t be that big of a hit.
Last July, Scott liked Lone Star Technologies (LSS). It’s up 63 percent since then. (Lone Star Technologies closed on Friday at $44.31.) He still owns the stock and thinks it is worth $60.
Eight months ago, Joe suggested buying Neiman Marcus (NMG.A). The retailer is up 31 percent in that time. (Neiman Marcus closed on Friday at $71.30.) Joe says keep buying because in January, same store sales were up 12.2 percent and he thinks the stock’s still going up.
In August, Pat wasn’t phoning it in when he picked Nokia (NOK). Since then, the mobile phone maker is up 33 percent. (Nokia closed on Friday at $15.76.) Pat owns it and said that even though it’s facing a much tougher competitive environment, it’s still doing well. He recommended hanging on to the stock.
Last October, Gary said President Bush's pro-biz policies would do well and so would Marriott (MAR). (Marriott closed on Friday at $63.77.) Right on both! Marriott gained 20 percent. Gary said the travel industry is sizzling right now and he still thinks the stock can move up 20-25 percent because it has great pricing power.
And, now, the calls that weren’t so great: