Brenda was joined by: John “Bradshaw” Layfield, WWE Superstar and author of Have More Money Now; Gary B. Smith, RealMoney.com columnist; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; and Meredith Whitney, Fox business contributor.
Trading Pit
September is historically the worst month of the year for stocks. Since 1950, the Dow (search) has fallen over 40 percent in September. Despite these numbers, should investors be bullish?
Bradshaw is bullish for the long-term. He said in the past several years, we have had events that have kept the market down, but doesn’t foresee any big happenings this September. Bradshaw thinks we will be treading water this month. He added that we may not see a big spike up this month, but our economy is on a rebound and we will see this at the end of the year.
Scott thinks the market will rush higher in the beginning of September because through the month of August, the market went almost straight up. Also, if the economy continues to do well, these investors are going to want to buy stocks.
Tobin said we’ve had a stealth bull market. The numbers get better every week. He thinks September will be fine because each time we have had a big September, it’s been after a big bottom, like the one we had.
Gary B. is bearish. He charted the Dow and showed the uptrend that had been established in August has been broken. Due to this, expect a move further down. He conceded that the rest of the year could be bullish, but we will go down in September.
Meredith thinks there is fantastic news coming for stocks and the Nasdaq has the most upside-even though it has made the biggest move of the three indexes.
Stock X-Change
Bradshaw shared three stocks that he owns and thinks you should too.
His first pick was Citigroup (C). He thinks Citigroup is the best financial company and the hit it has taken because of its connection to Enron and Worldcom has been overblown. Meredith said it is a mistake to own any financial stock when rates are rising. Scott thinks it would be better to own a smaller bank. Tobin agreed that Citigroup will grow and have acquisitions, and this will help its earnings. (Citigroup closed at $43.35 on Friday.)
Next, Bradshaw chose Wal-Mart (WMT). He selected this stock because it is the greatest retailer in the world and does everything better than anyone else. It has successfully expanded in Europe and Mexico and will continue to expand internationally. He advised to wait for it to pullback, before buying it. Scott said there is no growth and the smaller retail companies are better. Tobin and Meredith agreed with Bradshaw and would wait for Wal-Mart to pullback before buying. (Wal-Mart closed at $59.17 on Friday.)
Bradshaw’s last selection was Pfizer (PFE), because it has been the leader in the pharmaceutical market and it will continue to do so. It has a line of 10 to 20 new drugs that are going to come out in the next few years. Tobin said Pfizer’s problem is competition from the generic drug companies, which are doing very well. Scott said he would be a long-term investor if it were $20. Meredith said it’s a cheap stock and likes it at this price. (Pfizer closed at $29.98 on Friday.)
Chartman
Gary B. and Bradshaw went head to head in the "Ultimate Stock Smackdown!" Gary B. chose stocks he is very bullish on, but would his “opponent” who is almost a foot taller and about 150 pounds heavier than Pat Dorsey, agree?
Gary B. first selected Krispy Kreme (KKD). It steadily declined for the better part of a year. However since it broke through this downtrend, the Chartman thinks it will be at $75 in a year. (Krispy Kreme closed on Friday at $44.13.) Bradshaw said it’s a great company, but the stock is wildly overpriced. Also, America is becoming more health conscious.
Gary B. next picked K-Mart (KMRT). It also broke through a downtrend and has a strong chart. He is looking for it to hit the high $30s. (K-Mart closed on Friday at $30.67.) Bradshaw thinks K-Mart is no match for Wal-Mart, which is the champ! He added it has had too much bad press and new corporate plans will not help.
Predictions
Bradshaw’s Prediction
Before year end we get Saddam and Dow approaches 10,000.
Scott’s Prediction
Profit from gas gouging; buy Exxon Mobil (XOM); up 20 percent by 2004.
Gary B’s Prediction
Starbucks (SBUX) gets a caffeine kick and nearly doubles in a year.
Tobin’s Prediction
Bet the house on Freddie Mac (FRE); going up 40 percent.
Meredith’s Prediction
Inflation becomes a problem; gold going to $500 an ounce!
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