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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research editor, and Bob Froehlich, DWS Scudder chairman of investor strategy.
Trading Pit: Dow Falls Back to 13k Again; Why It Could Hit 15k in 50 Days!
The Dow falling back to 13,000 after Friday's 200-plus sell-off and three 360 points losses in the past three weeks. . But we've seen stocks bounce back after big sell-offs before this year. Bob Froehlich, you predicted back in September on Bulls & Bears that the Dow would hit 15,000 by January 1st, is another big rebound coming?
Bob Froehlich: Dow Wow! The fundamentals haven't changed. The economy is growing at almost five percent. The fundamental issues that are going to drive our market are still in place. Which means we will get to 15,000 by the end of the year..
Scott Bleier : 15,000 no chance! The fundamentals have changed. There is a credit crunch! The markets over the past two weeks have been exceedingly tough because the market has been in denial. Investors have been shaken and the denial is over. Everyone knows the extent of this damage. We are getting closer to the bottom of this phase, and 12,500 will be a great buying opportunity.
Tobin Smith: If you look how many 52 week highs vs. lows on Friday, it was 14-to-1 new lows to new highs. That's the beginning of a bottom.
Gary B. Smith: Friday's big down day was actually not do to the financials. A big chunk of that was IBM and 3M ironically. All we need is American Express, AIG, and JP Morgan, the big financial components, to really soar. If the financials start ripping and the IBM's of the world flatten out, then mathematically another 2,000 points is definitely in the picture.
Pat Dorsey: We are going to hit 15,000 but not by January 1, 2008, that's a little too aggressive. The economy is slowing a bit, but it's not as bad as the market actually has you think. It takes time for the market to react to that. Confidence has been shaken and that doesn't change over night. The bottom line is you should be buying right now, but we are not getting 2,000 points in 50 days.
Record Year of Toy Recalls: Good News for U.S. Economy?
Tobin Smith: We have an opportunity as entrepreneurs. Let's start a business called "it's safe dot com", like the Good Housekeeping seal of approval in the 1950's. We put together the testing business, and make it in the United States.
Scott Bleier: Tobin has a good idea, but American consumers are addicted to cheap Chinese products. You are not going to break American's desire to own cheap merchandise.
Pat Dorsey: I have nine-month-old twins and everything goes in their mouth! As a parent, I'm certainly thinking about if it's wooden and not made in China, I'm more inclined to buy it.
Bob Froehlich: Every new merger and new business that goes into China helps them improve the quality of what they are doing. They will get their act together. We cannot compete on a price with China.
Gary B. Smith: The marketplace works perfectly, and it will filter out what needs to be filtered out. The wholesalers, the retailers and the consumers will decide how to fix the problems. We've already seen Chinese stocks destroyed that have lead in their products.
Stock X-Change: Lightning Round
The "Bulls & Bears" in the hot seat! The best stocks to own right now in the Lightning Round!
If you want to watch what each had to say about each stock, click here.