Terry Keenan guest hosted for Brenda Buttner and was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; and Bob Olstein, president of The Olstein Funds.

Trading Pit

A big week for stocks. Big-time rallies early in the week had the Dow and Nasdaq finish the week up solidly. In fact it was the biggest gains in a week for both averages so far this year, with the Dow gaining 413 points and the Nasdaq up 141 points.

But was this a one week wonder, or the real deal? Bob said he doesn't think that last week's rally was a bear trap. But he does think that the market is going nowhere this year, and to make money under those conditions, you need to be a trader. He advises to go in and buy among the technology ruins, but warns not to have any expectations until 2003.

Tobin said there are some tech stocks that are bargains now. He cited Check Point Software (CHKP) as an example of a tech stock that is currently priced to buy.

Gary B. charted the Nasdaq's movement since March of this year to demonstrate that everytime the bulls bring the Nasdaq up, the bears keep knocking it down. He thinks that the Nasdaq has bottomed, and said the time to buy is when it can close in the 1760s. (The Nasdaq closed at 1741.39 on Friday.)

Pat said that there are plenty of values out there, investors just have to know where to look. He agreed with Toby that Check Point is a bargain, and added that TriQuint Semiconductor (TQNT) is a good buy. He also thinks that a lot of banks are cheap, in particular, FleetBoston (FBF).

Scott said that buyers have rotated out of small cap stocks because they have performed so well, and into big cap and technology stocks because they had got beaten down too much. He agrees with Bob that the market will go nowhere this year.

Tobin believes that earnings and jobs have to take off to make the market go higher. He said if companies start hiring, it means that they are making earnings. Bob said it's a stock pickers market. He thinks the averages are ahead of themselves, and so are some stocks like Cisco (CSCO) and IBM (IBM). Gary B. chimed in and said he agrees that small cap stocks are overextended and that large cap stocks have been beaten down.

Stock X-Change

Bob, Tobin, and Scott all went shopping for stocks!

On past shows, the three have made great calls on retail stocks. And it was retail stocks that helped lead the market rally last week. So we put them on the spot for a new moneymaking retail idea.

The guys were making fun of Bob when he picked JCPenney (JCP) a year and a half ago. But it's Bob who's laughing now because the stock has more than doubled. And that's been in a down market! That was a terrific call, but Bob knows he's only as good as his next call, that's why he chose OfficeMax (OMX). He likes the stock because it has new management. He thinks it has been beaten down too far (it closed Friday at $7.64) and can go to $15 in the next 12-18 months. Tobin was skeptical on the stock, and Scott thought it could go to $12.

In December Scott said to buy Lands' End (LE). And quite simply, he nailed it. It was doing well and then the company was bought by Sears (S) last week for a premium. Now the stock is up about 40 percent. But now Scott thinks that Children's Place (PLCE) is a retail stock on sale right now because it has no debt, is well run, and has great growth and demographics. Tobin said he likes the stock, but it is too expensive right now. Bob thinks the stock is fairly priced right now, and said he's not interested in buying it because he likes to buy stocks that are undervalued.

And Toby knows the way to the ladies' hearts: with the blue box. Back in November, he recommended Tiffany & Co. (TIF) and it has made big gains since then. If you bought it then, you could probably afford to actually shop there! But now he says to buy Tuesday Morning (TUES) on Monday. He said it is the most unique store he has ever come across because it buys very expensive things and then sells those things for a discount and it is only open ten times a year. He likes the stock because it has great growth and margins. Also he noted that the average store sells $170,000 of merchandise for every employee, while Tuesday Morning averages $442,000 of merchandise sold for every employee. Scott said the company has a lot debt. Bob liked the stock because the company will pay off its debt in 8 years.

Chartman

Gary B. brought in two stocks he owns in his personal account to see if Pat thinks he's making smart moves.

The first stock he brought to the table was First Data (FDC). He charted the stock's performance since last November. It was in a steady uptrend from that time until April. But, once that trend was broken, it then slipped into a small downtrend. First Data has since climbed out its downtrend, and the Chartman says now is the time to buy. Pat also likes First Data because the company has built an extremely profitable and consistent business by essentially making money by moving money. It processes credit and debit card transactions for retailers and banks, and owns the Western Union money-transfer business.

The Chartman also knows a good bargain when he sees one, which is why he likes Wal-Mart (WMT). He noticed that Wal-Mart has recently broken out of a downtrend it's been in since April. He advised to buy it on any pullback. But Pat was not as optimistic about the world's number one retailer because he thinks the law of large numbers could catch up with the company eventually. Pat also said that the stock is fairly valued at best, and isn't cheap. He thinks Wal-Mart is a great company, but advises to wait until it gets cheaper to buy the stock.