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Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
Bulls & Bears
This past week's Bulls & Bears:
• Gary B. Smith, Exemplar Capital managing partner
• Tobin Smith, ChangeWave Research editor
• Scott Bleier, HybridInvestors.com president
• Bob Olstein, Olstein Funds president
• Adam Lashinsky, Fortune magazine senior writer
Trading Pit: Dow All-Time High
Six years ago on Saturday, January 14, 2000, the Dow closed at its all-time high of 11,722. On Friday, it finished at 10,959, 763 points below that level. A move of 6.5 percent and we'll have a new record. Will we get there?
Tobin Smith: We could make a new high in the next 2 ½ to 3 weeks with the earnings that are coming out. But a new high won't stick until we get some resolution concerning the nuclear situation with Iran. This will give us some type of indication of where oil prices are going.
Bob Olstein: I think investors need to avoid symbolic issues, like Dow 11K and a new all-time high. We should be able to get to a new high because stocks are still in a trading market, and the market should gain 5-7 percent. Some investors are concerned about interest rates, but between 1995-2000, the 10-year rate was 6 percent and markets went up. One last thing: We are in a stock picker's market!
Gary B. Smith: We'll absolutely make a new all-time high. The rally we had to start the year was not a head fake. When the market headed lower on Thursday and Friday, it was just a much-needed rest. Instead of selling off, it just kind of drifted down a little bit. I don't think investors are worried about Iran or oil -- they're worried about missing the next big move higher. This "fear" will fuel the rally and cause us to rip right through the Dow's all-time high.
Adam Lashinsky: The Dow will reach its record high because corporate earnings are up and the Dow hasn't kept pace. We don't need a lot to gain, just 6.5 percent. Actually the Dow should've reached it last year, but didn't for a number of reasons. We're going to be able to make it this year, just based on the fact that earnings are so strong.
Scott Bleier: Technically, all of the markets have been an uptrend for the past 3 years. Draw a line from just before the war with Iraq up to today, and you'll see a perfect uptrend line. We are still in a bull market. I think in the next year, the S&P 500 will gain the 15 percent it needs to reach a new high. And that means the Dow will be approaching 13,000.
Scott, Bob, and Tobin each picked stocks they think are ready to hit new all-time highs.
Scott Bleier: I really like AU Optronics (AUO), the third largest manufacturer of LCD flat panel screens. These screens are used in TVs, cell phones, computers and digital cameras. This area will continue to grow because everyone is going to have an LCD television in 5 years. Look for AU Optronics to surpass its all-time high of $28.50. (AU Optronics closed on Friday at $14.97.)
Tobin Smith: This stock could reach its all-time high. However, it will have to reach that level with its earnings power, because a big company like Sony (SNE) is not going to buy it out.
Bob Olstein: There's just too much competition.
Bob Olstein: My pick is Scientific Games (SGMS), the number one maker of instant lottery scratch off tickets. It's going to keep adding more states to its roster. I own it and think it's worth $35-40. (Scientific Games closed on Friday at $30.02 and its all-time high is $31.71.)
Scott Bleier: Bob should sell it now. It's expensive, but its closest competitor was bought out.
Tobin Smith: I would continue to hold onto this stock.