Stock Smarts: The events of September 11, 2001 have forever changed the landscape of America and the stock market.
Consider the following: since the terrorist attacks, over $1 trillion of investor wealth has been erased, more than 200,000 jobs have been lost and the airline industry has been pushed to the brink of bankruptcy.
So when will the road to recovery begin?
Jonathan Hoenig of Capitalist Pig Asset Management says the even before the tragedy, the stock market was in bad shape. In terms of investing, he feels that one should pay attention to stocks as opposed to the economy. And he believes that we could be headed for a long period of going “nowhere fast” in terms of market movement: not a bull or a bear market, but a market with a trading range.
Jonas Max Ferris of Maxfunds.com noted that the economy was weak before the attacks (much like the stock market), but the economy is not as bad as it seems. He does feel that companies with poor earning are going to use a form of what he called “voodoo accounting,” blaming the weakness in earnings on the terrorist attack and the subsequent drop in the economy.
Charles Payne of Wall Street Strategies says that companies should get all the bad new out now, because the weak stock market can absorb the news. With lower expectations from investors, stocks could be ready for a solid rally by the end of the year, but a more likely scenario is for a rally in the middle of 2002.
Hilary Kramer of the Cisneros Group sees consumer confidence as being shot right now, as American have heightened fears about unemployment and personal safety. She also says that unemployment will continue to rise, and that does nor bode well for the economy, since unemployment is a lagging indicator.
The panel offered up some picks that could makes some gains in the current market.
Charles: Scholastic (SCHL)
Jonas: Fidelity Select Air Fund (FSAIX)
Jonathan: Buenaventura (BVN)
Hilary: Boeing (BA)
Mutual Fund Face-Off
Topic: The best "safe" fund - low risk alternatives to Money Market funds
Panel: Dagen McDowell of SmartMoney and Jonas Max Ferris of Maxfunds.com
Dagen - Vanguard Short-Term Federal Fund (VSGBX)
Jonas - Payden Global Short Bond Fund (PYGSX)
Dagen and Jonathan wrapped up the show by answering some email question from viewers.
If you want to have your question answered during the "Money Mail" segment, e-mail us at email@example.com.
If you are interested in receiving a transcript of the show, please call 888-443-6988.