Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist, Pat Dorsey, Morningstar.com columnist; Scott Bleier, chief investment strategist at Prime Charter; Tobin Smith, portfolio manager of ChangeWave Capital Partners; and Mike Norman, publisher, The Economic Contrarian Update.
Since the terrorist attacks of September 11th, the low point for both the Dow and the Nasdaq fell on September 21st. But since that bottom, both have climbed higher. The Dow is up 11% and the Nasdaq has added 13%.
Gary B. charted the Dow, and he said that it will probably lose some value, but he is bullish. He likes the Dow because it is at an uptrend line that goes back almost 17 years. And, as long as it stays above that uptrend line, he is going to be bullish.
Pat says he also falls into the bulls' camp because stocks that issued earnings warnings have rallied because those warnings were not as bad as investors had expected.
Tobin said investors have to think about the future, and the future will be brighter than today.
Mike thinks that stocks are too expensive, and the Dow will lose 75% of its value, and we will see Dow 4000.
Scott believes that the stocks will get cheaper, but we will not see Dow 4000.
Tech stocks were among those hit first and hardest by the terrorist attacks. But they are coming back, and coming back strong. So, the Chartman and Pat each picked a tech stock that they feel is the best buy right now.
Gary B. chose EMC Corp (EMC), which is down 6% since the attacks. He likes the stock because it has slipped far and fast, and has stopped at an uptrend line. Pat also likes this stock. He is bullish on it because it is a leader in the high-end data storage market, and storage is likely to be one of the biggest growth areas when tech rebounds.
Pat chose Linear Technology (LLTC), down 8% since the attacks, as his pick because it is the best managed/little known chip company, is set up well to survive a downturn, and has a very diversified customer base. The Chartman didn't like Pat's pick because, unlike EMC Corp, it is not resting on its uptrend line and could fall further.
Not all stocks are down since the terrorist attacks. In fact, some are actually up. Mike, Scott, and Tobin gave their opinions of Nokia (NOK), Wal-Mart (WMT), and Pfizer (PFE).
Although Nokia has added 24% since the attacks, Mike thinks it's expensive. However, Tobin does not think it is overpriced, and does like the stock. Scott likes Motorola (MOT) better.
Wal-Mart is up 14% since September 11th, and Scott said he sees little upside for the stock, so he is neutral on it. Tobin also said he sees little upside. Mike said that consumers drive the stock, and because of the massive lay-offs, the stock is not going higher.
Pfizer has risen 9% in the same time, and Tobin likes the stock because it has one of the best pipelines for new drugs. Scott said it's not cheap, but investors should buy it at these levels because it is the classic defensive and classic growth stock. Mike does not like the stock because he said it is overpriced.
Mike: New record deficit in 2002; market falls like Japan's
Gary B: Gold stocks fall; 2000 lows by the spring
Tobin: Military build-up makes Boeing (BA) a buy
Pat: US Airways (U) bankrupt or bought within year
Scott: Mortgage rates below 6% within 6 months