Neil Cavuto was joined by Jim Rogers, president of JimRogers.com; Gregg Hymowitz, president of Entrust Capital; Gerri Willis, senior financial correspondent with Smart Money magazine and Bob Olstein, president of The Olstein Funds.
After the Sniper
The bad news we all know is that just two bad guys with one gun were able to kill 10 innocent victims, badly wounding three others while holding a whole region of our country under siege. The good news is our system works, as we were able to snag the snipers. And our markets work too; stocks rose 7 percent during the shooting rampage. So should we be encouraged by our market’s resiliency or worried about our society’s vulnerability?
Bob says our society and economy are vulnerable to big acts of terrorism, but not so much to isolated incidents like the sniper attacks. He says the market is up because investors are focusing in on earnings and interest rates.
Jim says our country and others have had mass murderers in the past, and we all learn to adjust to them. What’s more important is that it looks like the war with Iraq has been delayed and that’s good news for the market.
Gregg agrees that stocks are up due to the belief the war has been put off. He also believes the country and market can survive isolated cases of terror.
Lucent (LU), Sun Micro (SUNW), J.P. Morgan Chase (JPM) and Kodak (EK) are just a few of the companies announcing big layoffs this month. Tough news for sure. Some say bad for the economy because if you don't work, you don't spend, but there's another school of thought: that the trimmed down companies will be better poised to hire more workers and make more profits when this economy finally bounces back.
Jim says that layoffs will payoff. Companies will be better positioned when the economy picks up. He also points out that the pace of layoffs has slowed from what it was two months ago. Jim thinks all the above companies will get a short term gain as market rises, but he would not buy any of them for the long run.
Gregg says while the job cuts are near term personal pain for many, they will ultimately help lead to higher stock prices. One of the above companies he likes and owns is J.P Morgan Chase (JPM).
Bob and Gerri say investors should not buy a stock just based on a layoff announcement. Bob would not recommend buying any of the above mentioned stocks.
Head to Head
Neil says privatize social security now and put that money in stocks! That the market's nearly three year drop helps, not hurts, the argument to do just that. Neil points out that stocks earn an average annual return of 7.5 percent versus the 2 percent return from the Social Security Agency. New York Congressman Anthony Wiener says don’t fix something that is not broke. He adds that the Social Security is a safety net and that no one is supposed to get wealthy from it.
FOX on the Spot
Gregg says it’s a 1974 re-run: This year’s October market rebound is beginning of new bull market!
Bob says sell long-term bonds: prices will continue dropping as rates rise and economy rebounds!
Gerri thinks consumer confidence sinks as war worries rise!
Jim says to sell Russian investments now! The Chechen hostage incident leads to more turmoil that will eventually break up Russia into many different countries..
Neil says the Federal Reserve will sit tight on interest rates, convinced the market’s rise will lead to an economic recovery.