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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; Adam Lashinsky, Fortune magazine senior writer, and Todd Schoenberger, Diligent Investor senior equities analyst.

    Trading Pit: Will Iraq Defeatism Defeat Stocks?

    Defeatism on Iraq — Americans are hearing it everywhere. From Newsweek declaring we are losing the war to Senator John Kerry's, D-Mass., careless and controversial remark about the intelligence of our brave soldiers. Will this defeatist attitude eventually spell defeat for stocks?

    Tobin Smith: Yes it can. This defeatism basically means Iraq will be given to Al Qaeda. If that happens, we'll lose 2 million barrels of oil a day. I believe the main reason we went to Iraq was for oil. We can't afford to pull out because we all know what happened to the economy when gas went up to $3.50 in some areas.

    Adam Lashinsky: There is no reason to believe that pulling out of this war, which is costing American lives and taxpayer dollars, will be bad for our economy and stock market. Pulling out would cut down on the killing of our soldiers and the cost to our taxpayers. Don't worry about Iraq's oil because it's not affecting the price of oil around the world right now.

    Gary B. Smith: Pulling out of Iraq would be a good short-term solution, but horrendous for the long-term. This is especially true for the stock market. When people buy stocks, they are really betting on the future; that it will be safe and secure. The Iraq War has, in part, turned into a referendum on whether we can stand up to terrorists. Can we root them out and help rebuild that country? Pulling out now would be dreadful and would send a message to the terrorists that we just don't have the stomach to stay and fight.

    Todd Schoenberger: I think investors are smart enough to know that the insurgents are playing our media, which is influencing public opinion. We've been dealing with this for quite some time. October saw most American casualties in a year — but the stock market still broke to new highs.

    Scott Bleier: All of this negative talk about Iraq is a strategy to get the Democrats elected. The liberal media are left leaning and want to make the American public think that we are losing the war. This is a war that needs time to win and no one is giving it the time needed. The focus is now to root out all of the terrorists that have come to Iraq. There would be a direct negative effect if we were to pull out now because this would become another Vietnam.

    Election Day Winner: Wall Street!

    It's not what happens after Election Day that matters most to Wall Street — it's what won't be going on anymore — the mudslinging, Bush-bashing, and negative talk about the economy. Will stocks return making new highs once the ugly election season ends?

    Gary B: I certainly think so. Stocks were down this past week, but should turn around when all this negative bashing stops. After the polls close, people will start to focus on the economy and more positive things. I expect the market to have a good end of November and strong December

    Tobin: Representative Henry Waxman, D-Calif., is counting the days until he can be the head of the subpoena committee. That's what I fear. He'll go after a new company every week.

    Adam: There are two kinds of people. Those that pay attention to all of these ads and those that go about their business. Wall Street has been doing the latter all year. It has been a very good year for stocks and will continue to be.

    Todd: I want a political gridlock. I want the Democrats to take the House. Split government means status quo and less legislation. And less government intervention is always good news for the economy and stock market.

    Scott: The market has done great during one of the most difficult election seasons in recent memory. Mutual funds closed their books at the end of October and the rally stopped. The next 2 months will be flat as the market digests its recent gains. I expect a correction at end of year, which will be a great buying opportunity.

    Stock X-Change

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