Brenda Buttner and was joined by: Gary B. Smith, RealMoney.com columnist; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; Bill Fleckenstein, president of Fleckenstein Capital; and Joe Battipaglia, chief investment officer of Ryan, Beck & Co.
Your stocks are suffering from Iraq-nophobia…big time! Since September 12th when President Bush made it very clear to the United Nations an attack on Iraq was almost certain the Dow is down 10%. Add that big drop on Friday and it's lost almost 900 points in two weeks.
Joe said the war talk and earnings disappointments are causing the market to drop.
Bill disagreed with Joe and thinks that it's not the war talk, but earnings problems and overpriced stocks. He said we might even go all the way to Dow 5,000.
Scott agreed with Joe and said the uncertainty of war with Iraq is pressuring the market. Scott thinks the government has taken its eye off the economy, and is focusing only on the war.
Gary B. charted the Wilshire 5000 Total Market Index. He said the trend has been down since President Bush's September 12th speech and it still hasn't reached its July lows. Unlike everyone else, Gary B. said the market doesn't have to go anywhere. Right now he sees that sellers want to sell more than the buyers want to buy, but selling is getting near exhaustion.
Tobin said the problem is that we are in a bear market. The market keeps going down because there are a whole bunch of problems the market cannot figure out. He said any market rallies are due to investors buying to cover their shorts. He thinks for most companies, the bad news is not going to end for at least 6 months.
It was time to look back and find out who's been right and who blew it.
First up, the good calls.
Back at the end of March Bill said to sell IBM (IBM). And what a call! IBM was trading at over $100 a share, and just this past week it fell to a new 52-week low under $60. It's already lost 42%, but Bill still thinks there are more blues for Big Blue.
Two weeks ago Toby predicted the Nasdaq would drop 10% on jitters. And when things got bad on Tuesday, it did just that. Or awfully close. The Nasdaq hit a 6-year low, and fell more than 9% in just over a week. It's up a bit since then, however Toby does not think that will bottom until it hits 1000.
In the middle of July Scott said if investors wanted to beat their money manager, they should buy Johnson & Johnson (JNJ). And anyone who did is probably doing just that! J & J was at 41 and change then and now is in the mid fifties. A gain of 32%! After that gain, Scott thinks the stock is too expensive to buy right now.
Back in February Gary B. said Amazon.com (AMZN) was a buy, but put in a stop at $11. The stock's gone up and never hit 11 bucks. A huge victory in this market and he thinks investor who own the stock should hold on to it.
Over a year ago, Joe said Norfolk Southern (NSC) was a good stock to buy.
It was at 18 and change then. Now? Over 21 bucks. But back in March it was up better than $26, which was a gain of 41%. Joe still likes this rail roader because he thinks the economy will get stronger and this company will benefit from that.
Now time for the not so right calls.
At the end of July Joe said the Dow and S&P would be up 25% by the end of the year. Doesn't look like it. In fact, both are down from the time of his prediction. However, Joe does think both will be up at the end of the year from their current levels.
Back in May Gary B. predicted that tech had bottomed and the Nasdaq 100 (QQQ), that is the 100 biggest Nasdaq stocks, would be up 50% in 9 months. Now he still has time, but it's not looking good because the Q's are down 35% in that time! His charts betrayed him on this one, and he thinks the Q's are headed lower, to at least $17. (The Nasdaq 100 closed at $21.31)
In late June Toby said Martha Stewart would settle her case and her stock would pop. Well Martha ain't talking and the stock ain't getting better. In fact, it's actually fallen below a market cap we talk about. But since the scandal has knocked it down, we'll discuss it. Toby agreed this is not a good thing and not a good stock right now. He thinks Martha should've settled and if you own the stock, sell it.
Scott made a biotech bet in late July and lost. He said OSI Pharmaceuticals (OSIP) would lead the biotech bounce and be up 40% by the end of the year. Now OSI is leading biotechs. But down, that is! It did make a run up last week, so it's not as bad. But OSI is looking more like being down 40% by year-end! Scott thinks the stock has a decent risk/reward right now.
Now in fairness to the other guys, Bill has only been on the show a couple of times. And he's made some great calls. In fact, we couldn't find any bad ones! So we took a look at another one of his good calls. On June 1st he said to sell your losers and short Intel (INTC). And come up short Intel has. Down 47% in that time. Bill, who is from Seattle, said Intel looks as bad as the Seahawks.
Bill: Dude, do NOT get DELL (DELL); it's going lower!
Tobin: Philadelphia Suburban (PSC) a good war play
Gary B: J.P. Morgan Chase (JPM) up 50% in a year!
Scott: Brazil beating over; Buy Petrobras (PBR)
Joe: Housing stocks lose 10%-15% by year-end