Brenda Buttner was joined by: Brenda Buttner was joined by: Gary B. Smith, TheStreet.com columnist, Pat Dorsey, Morningstar.com columnist; Scott Bleier, chief investment strategist at Prime Charter; Tobin Smith, editor of ChangeWave Investing; and Joe Battipaglia, Chairman of Investment Policy at Gruntal & Co.
>>>Recap of Last Weekend, September 8: Why Be Bullish?
Last year, the Dow ended down 6%, the Nasdaq was lower by 39%, and the S&P 500 decreased by 10%. Everything was supposed to get better after that right? Wrong! So far this year, the Dow is down 11%, the Nasdaq is off by 32%, and the S&P 500 has tumbled 18%! Now the last two weeks have been especially tough on the markets, but is the bull extinct? Not according to Joe who said that the markets should head higher because rates have been lowered, inflation is decreasing, and inventories are being drawn down. Also, the markets have returned to their March and April lows, but he thinks that the economy will turn for real, and the markets will follow. Tobin disagreed, and thinks that the interest rate cuts just are not cutting it. Gary B. called on his charts, and although he's still bearish, he said he is a lot closer to being in Joe's camp than before. The Chartman charted the Nasdaq and said it will revisit its April low, and may go a little lower, but this will bring on the buyers and make him a bull. Scott said he's not sure where the bottom is, but for him to be bullish, he needs to see money managers who had to buy on the way up, sell at the bottom. Pat said that Joe was right on with the inventories coming down, because that is what is going to restart capital spending. And Pat also stated that there was a lot of "hoo-ha" about the Unemployment Report that came out on Friday, but that is a lagging indicator. It tells where the economy has been, not where we're heading.
Back in the middle of July, Gary and Pat made a bet. They both picked a stock, and bet their Labor Day barbecue on which stock would do better through the summer. Gary chose Johnson & Johnson (JNJ), and Pat chose Liberty Media (LMCA). And the winner…the Chartman! Since July 13th, Johnson & Johnson is up 5.4% and Liberty Media is down 12.1%. So the Chartman got some tasty Chicago-style barbecue. The Chartman still likes his JNJ pick. He said the stock was in an uptrend in mid July, and even with a recent pullback, it's still in an uptrend. He stated the stock is strong and getting stronger. Pat also likes the stock because of its good pipeline of new drugs and its big market share in "stents." Pat also still likes his pick of Liberty Media because John Malone runs the company, and he is one of the savviest dealmakers in media and cable. He said it also has great media assets and is no longer a tracking stock. Gary B. doesn't like the stock because its predominant trend is down.
Joe, Tobin, and Scott all came back with a stock pick that taught the viewers something they needed to know about investing. Joe selected Norfolk Southern (NSC) because it's a railroad that carries coal--the essence of the old economy--and when things turn, it could see a nice increase. Scott picked Pall Corp (PLL) because the filter supplier will split the company into two components: health care and industrial. And while investors wait for this to happen (which Scott believes will make the stock go to $30), they will be getting a 3% yield. Tobin chose Diebold (DBD) due to the demand for automated voting machines caused by the last presidential election.
Big cap software companies drop 50% from these levels
TriQuint (TQNT) a buy! Moves up 50% in a year
Gary B's Prediction:
Nasdaq 1500 before end of October
S&P 500 rallies! Moves up 30% by year end
Gap (GPS) now low enough to buy