Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist, Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, portfolio manager of ChangeWave Capital Partners; Scott Bleier, chief investment strategist at Prime Charter; and Charles Payne, CEO of Wall Street Strategies.
A week of victories over there, but tragedy here at home, and the stock market follows every headline. Trading on terror is a tough strategy and Scott recommends buying on weakness because the desire to buy on the dip is very strong right now.
Charles said the market is stalling right now because a lot of investors have believed they have missed any chance to make profits. He believes that most investors want to see the market pull back before jumping in.
Tobin thinks that a recovery is coming sooner than later, and if someone is looking to invest do it now. He said that if you wait until the United States captures or kills bin Laden; you're too late.
Gary B. charted the Diamonds Trust movement over the last 5 days, and he showed that if you bought on the dips, you would have done very well. But he did warn that he is not that bullish overall because he thinks there is going to be a pull back.
Pat agreed with Gary B. and added that there are fantastic bargains in the market, so long as investors are willing to go away from the big names that led the market up.
The airline industry was just about ready to go belly up after the attack on America. It took a government bailout to keep it going. And then…another hit as an airplane crashed last week in New York. BUT the Chartman said investors still can make money by buying airline stocks. He especially likes AMR Corporation (AMR) (its main subsidiary is American Airlines) and Southwest Airlines (LUV).
He chose AMR Corp. because, despite the tragedies, it has only dropped to its long-term uptrend line. He said now is a low risk/high reward time to buy. Pat disagreed because airline stocks under perform the S&P 500 and this stock is not even a good airline stock.
The Chartman is also bullish on Southwest Airlines (LUV) for the same exact reasons he likes AMR. He advised investors to buy unloved, profitable companies at the lowest risk possible. Pat again disagreed. He said that this is an airline that does things right and it has low debt, BUT its stock price already reflects this.
Travel and leisure stocks have been hit and hit hard since September 11th. And last week's crash further rattled already nervous travelers and investors. But are some of these stocks low enough to buy? Charles, Tobin, and Scott gave their opinions on Expedia (EXPE), Hilton Hotels (HLT), and Six Flags (PKS).
First up, online travel service, Expedia. It had a steep fall after the attacks but has been coming back. Tobin said it has a great service and said he likes the stock if it can dip below $25. He thinks the stock can get to $50 in the next 3 to 5 years. Charles said that he would use it as a trading stock because the stock is a little ahead of itself right now. Scott believes this stock is fully priced.
Next up, Hilton Hotels. It also has not yet reached its pre-attack level, but Scott said he would buy this stock as an investment. Tobin likes this stock, but recommended buying casino hotel stocks because they will rebound faster. Charles said he sees no urgency to jump in and buy the stock now.
Lastly, the group discussed Six Flags. Some investors have been concerned that theme parks could be possible terror targets and the stock has felt the impact from that concern. Charles said to buy the stock and put it away. Tobin said that it is a good thing for these stocks that people drive to amusement parks instead of flying to them. But he likes Cedar Fair (FUN) better because investors get big dividends from it. Scott thinks that the stock is a safe and has limited downside because its parks are closed for the winter.
Gary B: Oil stocks rally; gain 20% by year end
Scott: E*Trade (ET) an online broker winner
Pat: Washington Mutual (WM) 25% higher in a year
Tobin: Quick victories have defense stocks overpriced