DISCLAIMER: THE FOLLOWING "Cost of Freedom 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 "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
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Bulls & Bears
Brenda was joined by: Gary B. Smith, columnist for RealMoney.com; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, editor ChangeWave Investing; Scott Bleier, president of HybridInvestors.com; and Rob Stein, managing partner of Astor Asset Management.
Trading Pit: Democrats vs. Investors?
President Bush is still working hard to sell his Social Security (search) plan. He wants to let you invest part of that money in the stock market. But Democrats are pulling out all the stops to derail the plan.
The question is, why? This might be a clue. According to polls, more investors tend to be Republican.
Are Democrats determined to prevent Social Security money from going into stocks?
Gary B. Smith: Yes. Democrats know they're best at playing the role of Mommy and Daddy. When people invest in the market, they become independent and need less government. This is exactly what the Dems don't want!
Rob Stein: I’m not sure that Dems are trying to prevent people from investing in the stock market. What they’re basically saying is that this isn’t a sure thing. And there’s a lot of Republicans who also don’t want to see people putting a lot of their Social Security money into the stock market. In any event, I’m not being a Democrat or Republican, I’m just being opened minded to good ideas. I think the tax cuts were a good idea, but retirement accounts are a bad idea.
Tobin Smith: If you’re smart enough to make your own money, aren’t you smart enough to invest it? The fundamental issue with many Democrats is that most feel the stock market is risky and that President Bush’s plan is a Republican plot to make capitalism take over the world.
Scott Bleier: The Democrats have a big grudge match against the Republicans. Everyone knows it. Everyone also knows that President Bush is having a tough time getting support for his Social Security reform. So Democrats are hitting Republicans any chance they get. But the big issue with Social Security private accounts — that no one is talking about — is that money will have to made up if we go to these accounts. And that is going to make more debt. Dems don’t want to do it.
Pat Dorsey: I dispute that more investors are Republican. During the 1990s, the percentage of Americans owning stocks jumped from 23 percent to 50 percent, however, party affiliations basically stayed the same. I agree with Scott that it’s a grudge match. This is more of a political issue than economic one. We’re arguing about $100 billion deficit in Social Security that won’t be a problem for another 30 years instead of a $500 billion trade deficit.
Forget the Kentucky Derby ... we have the "Bulls & Bears" Stock Derby!
Scott: I’m betting on American Express (AXP). AmEx has been a steady blue-chip stock, but now it’s morphing into a growth company. The company’s worldwide presence is getting bigger, in part because the card is now offered through a multitude of banks. More cards mean a lot more revenue. (American Express closed on Friday at $53.00.)
Tobin: I don’t like it.
Pat: American Express is a wonderful company and a wonderful business. It’s been a great brand name for many years and can charge more for its credit card than anyone else. I’d like to see the stock get a little cheaper, but it’s pretty good here.
Tobin: I like retailer Urban Outfitters (URBN), a clothing company that caters to teenagers and young people. It’s been a retail success story and should have tremendous growth in its stores. Plus, Urban Outfitters is in a niche that’s hard to compete against. (Urban Outfitters closed on Friday at $46.11.)
Pat: The growth is there, but all fashion retailers blow up eventually because they miss a trend.
Scott: A trendy boutique that caters to teenagers? It will build a lot of stores and then it won’t be hot anymore.