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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
• Pat Dorsey, Morningstar.com director of stock research
• Joe Battipaglia, Ryan Beck & Company chief investment officer
Trading Pit: Can the Bulls Beat bin Laden and Iran?
Wall Street and America are dealing with two big problems: bin Laden threatening new terror attacks and Iran demanding nuclear weapons. Both hit stocks hard Friday and caused the Dow and Nasdaq to suffer their worst point losses since 2003.
Are the bulls up to the double threat?
Joe Battipaglia: The bulls are up to this challenge. Terror threats and Iran's nuclear desires are ongoing issues that from time to time may rattle the markets. We are still at war. Oil prices rose immediately and that makes investors very nervous. Also, technology stocks reported horrible earnings and Google (GOOG) is under siege by the government.
Gary B. Smith: The market is concerned about both and will always be to some extent. But the bulls can definitely overcome this. The threats by Usama were just an excuse to sell. If these threats happened in October, when stocks were at a low, the market could have just as easily gone up.
Rebecca: This is a cliché, but the market got hit with the perfect storm. There's the Iran/nuclear situation, then the UBL tape, disappointing earnings, the government going after Google, and stocks at a peak. There is just no catalyst to move the market forward.
Tobin Smith: Market has no problem with bin Laden. Iran with nukes is a big problem. Iran can't have nukes. Someone will take these bombs away. Bull markets and rallies start out of desperation. They don't start when everyone's bullish. We needed to get some ugliness and negativity to build a base. That's what we're doing. The economics have not changed and the market will go nowhere so long as oil is above $65/barrel.
Scott Bleier: The fear factor and the price of oil definitely hurt the market on Friday. But on Thursday, the Nasdaq and tech stocks made a high for the year. A lot people with big portfolios were protecting their profits. Buy this sell-off!
Pat Dorsey: Bin Laden will make people nervous. But Iran with nuclear weapons is really the bigger long-term threat. It will be a tragedy if bin Laden attacks again because people will probably be killed. However, if Iran gets nukes and launches them, and another country fires back, a decent piece of the world's oil will be off limits for a long, long time. There's a low probability of it happening, but if it does, the impact will be huge.
Last week Scott predicted the Nasdaq was going to gain 20 percent this year. Which stocks does he think will give the Nasdaq the biggest boost?
Scott Bleier: My fist pick is Intermagnetics General (IMGC). This company develops Magnetic Resonance Imaging (MRI) products, along with superconducting materials. It's in a huge cycle of replacing MRI products. I think this stock is going to $50. (Intermagnetics General closed on Friday at $37.99.)
Pat Dorsey: This is a good company with lots of free cash flow. It's a decent market to be in, but I think the replacement cycle is already built in.
Tobin Smith: I would like to see the stock pull back a bit, but overall this is the right place to be.