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Bulls & Bears
This past week’s Bulls & Bears:
Gary B. Smith, RealMoney.com columnist
Tobin Smith, ChangeWave Research editor
Scott Bleier, HybridInvestors.com president
Pat Dorsey, Morningstar.com director of stock research
Charles Payne, Wall Street Strategies CEO
Trading Pit: Bulls or Bears in 2006?
Will the bulls or bears rule the stock market in 2006?
Gary B. Smith: It will be a very good year for the market, after a first quarter sell-off. I think the major indices could gain 25 percent. Stocks broke out in mid 2005 and a pause would be healthy. Then the market would be ready to resume its move in April.
Charles Payne: I think the bulls will rule, but it isn't going to be cut and dry. The economic backdrop, the amount of money on the sidelines, and a friendlier Fed will all contribute to higher stocks in general. By the way, solid earnings have virtually been ignored and they will begin to play a larger role. I think the major indices will be up 15 percent or better.
Pat Dorsey: We’ll see more of the same. The economy will be okay and maybe slow a bit. Valuations are not high, but are not compelling either. I do think the small cap run is done and I'd start looking to buy big cap stocks.
Tobin Smith: From the low point of year, we’ll gain 12 percent. Oil prices won't go crazy. Fed won't raise rates. Consumer spending slows, but business spending increases.
Scott Bleier: It will only be okay for the major averages next year because the economy will finally slow down. There will of course be sectors that do very well, but the Dow will be stuck between 10,500 and 11,500.
What were the Bulls & Bears best and worst calls of 2005?
First the best:
No. 5: On August 27th Pat said to buy Avid Technology (AVID) and it’s gained 50 percent. (Avid closed the year at $54.76.)
No. 4: On July 2nd, Scott said JDS Uniphase (JDSU) would be the best stock to own for the rest of the year. JDSU has gained 57 percent. (The stock closed the year at $2.36.)
No. 3: On May 14th, Charles picked Ivax (IVX), which is up 71 percent. (Ivax closed the year at $31.33.)