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.
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; Pat Dorsey, Morningstar.com director of stock research; Charles Payne, Wall Street Strategies CEO, and John "Bradshaw" Layfield, WWE superstar and nationally syndicated radio show host.
Trading Pit: Can More Success in Iraq Take Stocks to Record Highs?
One of the largest attacks on insurgents in Iraq was launched on Thursday — almost three years to the day that Shock and Awe was unleashed. Can more success in Iraq take stocks, already at or near 5-year highs, to record levels?
Charles: Absolutely! The great thing about the stock market is that it sees through liberal media's reports that make it seem like we're losing in Iraq. The stock market knows that we are winning and also knows the main objective is to keep the terror over there. Wall Street sees that success, and that will make stocks go higher.
Tobin: There's something that we sometimes forget: if Saddam Hussein was still in power and oil was $60/barrel, Iraq would be making $300 million selling us 5 million barrels a day. Wall Street has seen that we have taken out the bad guy. It was ugly, but it was the big threat. $300 million a day is a weapon of mass destruction for what it could have done to the rest of the world.
Gary B: The market is doing well because the war effort is going so well. Since it is going well, we are able to focus on other things. If there were more terrorism here, it would be a whole different matter. Terrorism seems to be contained off our shores, which allows Wall Street and the market to focus more on other things like oil prices and CPI (Consumer Price Index). Since these are going pretty well, the market is at almost near record highs.
Bradshaw: President Bush is fighting a War on Terror, but a lot of politicians are fighting a war on President Bush. Sixteen of eighteen provinces in Iraq are secure. Operation Swarmer in Samarra this week was monumental. This air assault was logistically one of the hardest military exercises to execute. Plus, there were 800 Iraqi soldiers helping. The Iraqi Parliament met for the first time last week in a new Congress. By the end of the summer, 75 percent the country will be guarded by Iraqi soldiers. We are going to look back and see that this was a milestone week.
Pat: Oil prices and CPI are having a much bigger impact on the market than what is going on in Iraq. A few weeks ago when there was an attack on a Shiite mosque, our headlines were talking about Iraq dissolving into a civil war. The market was hitting new highs then too. That didn't have an effect on the market and I don't think this will either. The economy is strong, earnings are good, and that's having a much bigger effect.
Scott: Wall Street is looking past this. It sees right though it and knows that troop levels are going to come down. Since the war started, the Dow has gained 30 percent and Nasdaq has doubled. The economy is steady, interest rates are stable, the housing market is not dead, and spending is going on. This is all good for the market. Wall Street is looking to the outcome, where it knows that we'll have a measured success.
March Madness is in full swing. Our guys have picked stocks they say could make you more money than any office pool.
Charles: I love PMC-Sierra (PMCS). This is a favorite broadband play and the stock is very exciting. It recently broke out and is looking tremendous. I own it and think it has a lot of growth potential. (PMC-Sierra closed on Friday at $12.12.)
Tobin: It's not bad, but I like Applied Micro Circuits (AMCC) better. Right idea, wrong stock.
Pat: I'm betting on Energy Partners (EPL), which is an oil and gas exploration firm in the Gulf of Mexico. It's building a bunch of high impact wells right now that have the potential to double or triple the company's reserves. The stock's at $22 right now and could be at $40 if these wells succeed. This has some risk, but if it succeeds, it will do extremely well. (Energy Partners closed on Friday at $22.27.)
Scott: It's too risky.
Speaking of risk, I like First Advantage (FADV), which provides risk management services and screening services. It's used by corporations, governments, and individuals and provides background checks, drug testing, motor vehicle reports, credit history and more. The stock is down from its highs and I think it's going to double in the next couple of years. (First Advantage closed on Friday at $23.00)
Charles: It's baffling. We've never had a more corrupt corporate environment, so at this stage, this company should be making more money than it is. I don't like it.