DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Bulls & Bears
Brenda was joined by: John “Bradshaw” Layfield, WWE Superstar and author of Have More Money Now; Charles Payne, CEO Wall Street Strategies; Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, founder and chairman of ChangeWave Research; and Scott Bleier, president of HybridInvestors.com.
Last week stocks were hit by terror on tape. On Wednesday, Usama bin Laden (search) appeared on a videotape. And then on Friday, an alleged 9/11 hijacker videotape surfaced. Each time a tape hit, stocks got hit. But overall for the week, the market didn't do much.
Tobin advised investors to buy stocks if they fall due to threats of terror. He said investors who bought stocks when they fell due to the terror tapes, made money. Toby concluded with a bit of advice. If you’re scared about terrorism, don’t buy stocks. We are going to beat the terrorists. But when buying stocks, look further out than a day. You have to look six-nine months down the road. We’re winning, the terrorists are losing, and you want to own stocks.
Bradshaw agreed with Toby and said investors should buy stocks when they fall due to terror. He said the videotapes prove that the terrorists have no recourse. If they could attack us, they would, but they’re sending out videotapes, because it’s the best they can do. As for the $87 billion President Bush wants to spend to get bin Laden and others like him, Bradshaw said a price tag cannot be placed on peace and security. Also, this sends a great message to the market because it says we are not going to tolerate terror and it will not happen to us again.
Gary B. charted the Nasdaq’s performance since 9/11/01. He said that we’re above the lows set after that date, but not quite back to the highs. However, all things considered, this is an incredible performance. He doesn’t think it’s a good idea to buy on every dip, but if you have a longer time horizon, like 6 months or a year, buy stocks.
Charles said when President Bush asked for the $87 billion, it got a yawn from Wall Street, because Wall Street doesn’t care how much it costs. Also, on the days that the terror tapes were released, there was some negative fundamental news-reports that consumer confidence is waning and retail sales were weaker than expected-which hurt stocks. Charles said these numbers and terror are all tied in because they won’t improve until Americans feel safer.
Always the fundamentalist, Pat said that economic news is affecting stocks. He said a softer retail demand affected stocks on Friday. However, he admitted that a terrorist tape is sexier than economic news, so that will grab people’s immediate attention. But over the long haul, fundamentals do matter, and economy is looking better, so buy stocks when the market pulls back.
Scott is impressed with the resiliency of the market. Investors are buying stocks. The economy is coming back. He thinks there is a growth phase in the market and the economy, and both are indicating that things are really going to take off.
A Lightning Round! The Bulls & Bears looked at four of the most popular stocks -- the ones that you almost certainly own. But their comments had to be quick because each stock was given one minute. Here’s what they had to say.
AOL Time Warner (AOL)
Friday’s Close: $16.07
Gary: Bull. This stock is stronger than Bradshaw. Buy on any close over $17.
Tobin: Bear. Their DSL is killing them.
Charles: Bull. All the bad news is in the past. Expectations are lower than ever and a lot of upside surprises are on the way.
Pat: Bear. Debt is still high. The company lost 800,000 subscribers in the second quarter and it is selling really good assets too cheap to pay off the debt.
Scott: Bull. Looks good technically. It’s still the most hated stock in the country, but the bad news is behind them.
Friday’s Close: $28.34
Charles: Bull. The stock is one of the best risk avoiders, has very little downside and a lot of money. It just increased its dividend. Microsoft is not going to outperform a lot of other stocks, but it’s not going to go down.
Gary: Bull. It’s the world’s biggest monopoly. I would buy on every dip.
Bradshaw: Bull. It has enough money to air condition hell and the smartest guy in the class is running the ship. It’s bound to dip, but I would definitely buy it.
Scott: Bull. Can you say $50 billion? Soon it will be maximizing shareholder value.
Tobin: Bull. You never go against Microsoft. It has an upgrade cycle. This is the Smackdown of the software business right now.
Pat: Bear. All the wonderful things everyone has said are true because it is a mature slow-growth company, but you have to be careful when you pay.
Friday’s Close: $35.66
Gary: Bull. I think the time to sell Boeing is when people stop flying and that is not going to stop any time soon. I think the stock makes a new high within six months.
Scott: Bull. Two words: defense spending.
Bradshaw: Bear. Only 26 percent of its profits are from military spending, while 50 percent comes from commercial spending. Every carrier is bankrupt or going bankrupt except for just a few like Southwest Airlines (LUV). I would stay away from the stock.
Pat: Bear. Defense is fine, but the rest of the business is commercial aircraft. Forget about it.
(The bell rang and the minute was up before Toby and Charles got their turn.)
Friday’s Close: $37.73
Tobin: Bull. Love it! This stock is going to fly farther than Bradshaw did when he wrestled the Rock. It is going up because both gas and oil prices are going to stay high. The problem is it has too much cash.
Gary: Bear. Big oil is in big trouble. It’s at resistance. I would definitely sell.
Charles: Bear. It’s had a pretty good move already and the stock is probably going to pullback.
Pat: Bear. Like Microsoft and the Nasdaq, but matured. It is important to be careful about what you pay. I’d buy it at $31.
Scott: Bull. Price gouging. It is going to have a great third quarter because of all the inflated gas prices.
Bradshaw: Bradshaw: Bear. I beat the Rock the last time I wrestled him! The company cannot control the political and economic problems. I’d stay away from it.
Tobin's Prediction: The Dow gains 500 points by the end of the month!
Pat's Prediction: Taxing times for H&R Block (HRB); falls 30 percent by end of year
Gary B's Prediction: The chips are down on chipmakers; short Intel (INTC)
Scott's Prediction: Macrovision (MVSN) makes music pirates walk the plank; up 50 percent
Cavuto on Business
Neil was joined by Jack Welch, former GE Chairman; Ben Stein, author of Yes, You Can Time The Market!; Jim Rogers, author of Adventure Capitalist; Gregg Hymowitz, founder of Entrust Capital; and Gary Kaltbaum, president of Kaltbaum & Associates.
More for Your Money
Neil Cavuto: bin Laden (search) and his lieutenant calling for more violence against America. And the market did not like hearing from Usama. Stocks took a big hit as soon as that tape hit the airwaves last Wednesday. Jack, should investors and America still be worried about Al Qaeda?
Jack Welch: Terrorism is with us and will be a way of life for us. Usama is just a symbol of what's out there. I don't think investors should be more worried with the new video that has come out. You might get a daily blip in the market, but I don't think it changes any fundamentals. We have to win the war on terrorism.
Gregg Hymowitz: And if we're going to win the war on terrorism we have to fight the terrorists. I think a mistake we've been making is that we've been fighting states and not the organizations of these terrorists. And I think if you do that then you don't have to spend $4 billion a month rebuilding the states you destroy.
Ben Stein: I think Hamas is going to try and compete with Al Qaeda and Usama to try and even be more terrorist. I agree, we have to win this war, but we need a much bigger defense establishment. Whatever it takes, if it takes bigger tax cuts or bigger deficits.
Neil Cavuto: You'd repeal the tax cuts to up the ante on the war on terror?
Ben Stein: If the choice were to have inadequate military establishment or repeal the tax cut, I'd repeal the tax cut.
Jim Rogers: Even if Usama bin Laden is dead or alive, it doesn't matter, they are recruiting a lot more people to come and attack us in Iraq. And they're coming from all over.
Neil Cavuto: The fact of the matter is there are hiccups when these new videotapes come out. What would happen if all of a sudden these tapes stopped and we had proof that Usama bin Laden were dead?
Jack Welch: The biggest concern is complacency. We had forgotten somewhat until this new tape came out again. But this is something that fundamentally changed the long-term all over the world.
Ben Stein: We have a billion militant Muslims who are mad at us. It's up to us to protect ourselves. Nations create their own security. If we defend ourselves I think the markets would be very secure.
Gregg Hymowitz: But it's not just psychological. I'm sure terrorists have cost General Electric hundreds of millions of dollars in changing the way they do business. Terrorists activity really has an effect on economic stability.
Jack Welch: But they'll be a lot more after Usama. If we find him and he's dead, they'll be another one right after him. Maybe ten more Usamas.
Neil Cavuto: Assuming al Qaeda is still a front burner issue, Gregg what do you do?
Gregg Hymowitz: I think if there is going to be another attack we can all agree that treasuries are the place to be. Possibly gold. I don't know if you can invest long-term based on terror, but defense is one area that would continue to get government money if there is another attack. One company we like and own is Boeing (BA). It may take two years for the commercial aircraft business to come back but as the defense spending goes up it's always a good play.
Ben Stein: I love the Fidelity Short-term Bond fund (FSHBX) as part of a very diverse portfolio. I own it.
Neil Cavuto: Even in the face of interest rates going up?
Ben Stein: It's a short-term fund. It yields a little more than a money market account.
Neil Cavuto: Assuming the Fed won't do anything.
Ben Stein: I think they're going to eventually start raising rates. But this is a short-term bond fund.
Jim Rogers: In the environment you outlined, I would certainly be defensive. I would sell or sell short the market. Or I would buy commodities like orange juice and coffee. I own them both.
Neil Cavuto: You're saying these commodities are going to run up? How do you buy that stuff?
Jim Rogers: Call up your broker. It's very easy to do. And yes they should go higher.
Neil Cavuto: Jack Welch, you've heard that strategy that we have to keep terror as part of the investment strategy. Do you agree with that?
Jack Welch: Absolutely. Terror is in our life and it's going to be in our kid's life. It's not going to be solved overnight.
Bring Back the Draft?
Neil Cavuto: Would bringing back the draft be the best way to fix Iraq and protect America and our Economy? Ben, if we need more troops to fight the war on terror, should we consider it before giving United Nations troops control of Iraq?
Ben Stein: I absolutely think we should at least consider it. We do not have a big enough military establishment. My first choice would be to raise the pay of the military to a decent livable level and attract more troops that way. But if that doesn't work, we have to consider bringing back the draft. The United Nations is never going to save us. They are not our friends.
Gary Kaltbaum: We do need to build up the military better but I don't know if bringing back the draft is the answer. I don't think it will happen. If it did, it would be a disaster for our country, market and economy. As far as the United Nations, they're wishy-washy and I don't know if I trust them. And in terms of France and Germany, I don't know if I'd ask them out to dinner anytime soon. But we definitely need to do something here.
Gregg Hymowitz: I think military studies will show that enlisted members are much better soldiers than draftees. We have to increase the military budget, but it's also important where we do it. We need more ears on the ground. We need better intelligence. We need more information, the CIA. That's where we need to get more people involved.
Jim Rogers: Even the English have said our intelligence is hopeless. But Ben is right. We do need to raise the pay of the military and we need to attract more people. We certainly don't need the U.N. because that would just confuse it and make more chaos.
Jack Welch: We don't need a draft. There's other ways to attract more people to the military. A draft would be divisive in this country. We'd have all the problems we had years ago with Vietnam if we bring back the draft.
Neil Cavuto: If we had one, what would be the outcome for the markets?
Jack Welch: I don't know the answer to that. I don't think it would be positive. I think it would cause uncertainty and markets hate uncertainty.
Gregg Hymowitz: Jack, do you think we need to go it alone in Iraq? Or should we bring in the United Nations in here in a major way?
Jack Welch: Never bring the United Nations in. They do not have our interest at heart.
Jim Rogers: We need to get out now.
Ben Stein: We can't get out now. There'd be so much more chaos than there is now if we got out. And that would be even worse for the market.
Gary Kaltbaum: Don't forget. The military has done a great job. We've won. What's happening now is fractious events that are happening. We freed millions of people. They now have the ability to speak their mind without having their tongues cut off or women being raped.
Head to Head
Neil Cavuto: War, a sluggish jobs market, and a drop in consumer confidence -- all adding up to a drop in President Bush's approval rating. So what's a leader to do when the going gets tough? To find out -- instead of going head to head this week, we go inside Jack Welch's head. Jack, do you have any advice for the president?
Jack Welch: First off, being a politician is a lot tougher than being a CEO. A CEO can take real brutal actions to get a company righted, while it's more difficult for the president with Congress and the other checks and balances in play. But a leader, whether a CEO or a politician, has to communicate a clear plan and be out front. He has to communicate and articulate ad nausea.
Neil Cavuto: Is the president doing that?
Jack Welch: I think he took a step forward Sunday night where he laid out the $87 billion. He put the reality out on the table but he's got to do a lot more of that. He's got to say what it's going to look like when it's all done. And he can't worry about appeasing every constituent.
Neil Cavuto: When you took over General Electric you told your troops, 'Look, we're in big trouble. It's not going to be easy turning this ship around.' I don't see that to the same degree out of this president.
Jack Welch: It is harder for a politician. But he did come up with that $87 billion number and people thought it was going to cause all kinds of trouble, but it didn't.
Neil Cavuto: If you were him, would you have done that thing on the aircraft carrier saying operations have ceased?
Jack Welch: That's hindsight. In the euphoria of a victory people do all kinds of things. It was a great moment for America. Our kids have won. I think it was a great idea at the time.
Neil Cavuto: Would it make a difference if he said, 'I didn't appreciate the enormity of policing and keeping the peace in Iraq.' Or is it understood and you know, give the guy a break. He's trying to seize on an important military initiatives ever.
Jack Welch: You're talking about style now. I would've done that. That's what you do in a company. You say exactly what you think the reality is.
Neil Cavuto: Will he get through this?
Jack Welch: I believe the economy is in for a real recovery. Everything I hear is contrary to what I read. I hear people that have come back from Iraq say positive things are going on there. The President's goal is to remained focused and to know what his mission is. He has to be relentless in telling the American people what to do and what we're going to have to do.
FOX on the Spot
Jack Welch: Economy grows more than expected in the second half of the year. Job growth begins in fourth quarter.
Gregg Hymowitz: More job losses! And sell retail stocks! They get hit as refinancing dries up and debt grows.
Ben Stein: Stocks tread water 'til next year.
Jim Rogers: Gold falls from seven-year highs. Don't sell or buy now. Buying opportunities come in a few months.
Gary Kaltbaum: Money scandal forces out Dick Grasso as chairman of NYSE.
Neil Cavuto: Don't dismiss Howard Dean. Republicans are dismissing the Democratic presidential candidate, but I've been researching the guy, and he's fairly pragmatic and very pugnacious. And if the President Bush's folks think he's a pushover, remember the Carter folks "dreamed" about Ronald Reagan in 1980; and remember what happened there.
Forbes on Fox
Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: Chana, Christmas (search) is a long way away, but we’re in a shopping season now; the second biggest shopping season besides Christmas, right?
Chana Schoenberger, staff writer: That’s right: “Back to School.” Actually, it’s not that far off because, as you know, they now have Halloween candy in the drug stores. But, the “Back to School” season is not really going all that well and we’re starting to see some trends which we think may carry over into Christmas and it’s bad for the retailers.
David Asman: What does that mean for specific retailers?
Chana Schoenberger: Well, we like Target (TGT) and Kohl’s (KSS). Target, of course, is a big discounter. They’re doing extremely well as shoppers continue to shop in discount stores instead of in department stores. One of the notable exceptions is Kohl’s, which is a department store with a difference. It does very well; it has a great selection. People like it, but they did note that a lot of shoppers are waiting until the very last minute, in this case, right before their kids go back to school to make their choices, which means they’re really dependent on sales.
David Asman: Rich, what do you think about the retailers?
Rich Karlgaard, publisher: You know, I really like Target. Target has managed to pull of what JC Penney (JCP) and others have not, which is that it’s cool, even if you have the means to shop at more expensive stores. So Target really has a broad appeal.
David Asman: Bruce, tell us about healthcare. Can anybody make money in healthcare these days?
Bruce Upbin, senior editor: It seems difficult, but Tenet Healthcare (THC), which is one of the top hospital chains in the country, has been dragged through the mud, and rightfully so. The federal investigators and people have really indicted it for fraudulent billing of Medicare patients. But this is a company that’s real, it’s got real profits, it’s got great assets.
David Asman: It’s got real problems.
Bruce Upbin: It’s got real problems, but if you look beyond it, it’s a fantastic value play for the contrarian, for those with steel stomachs.
Chana Schoenberger: I’m wary of all the scandals there. I feel like there’s more dirt that hasn’t been dug up yet.
Bruce Upbin: I think it’s in the stock. The stock is $16 and it could go to $20, low 20’s, 25.
David Asman: All right. Well, Rich, we want to go out to you. How do you play on the blackout? We had that blackout, is there anybody that’s going to make money off of it?
Rich Karlgaard: Yeah, I like Eaton Corporation (ETN). A long-time, Cleveland-based supplier to the automobile industry, but it’s now doing a joint venture with Caterpillar (CAT), the truck company, to do power generators. Now, you know, America runs on electricity. Supply chains, everything else. Something’s got to power the Internet, so they’re in the right place at the right time.
Bruce Upbin: Eaton is a great company. They spent the last six years getting rid of everything with grease on it and buying everything with a wire on it, and one of those wire areas is electronic sensors and things that makes power better.
David Asman: But, Rich, are these blackout concerns just a flash in the pan?
Rich Karlgaard: No they’re not, because Internet usage is just going to go up, almost at double-digit rates. So, more and more, America is powered by electricity.
Makers & Breakers
David Sokolower, managing director of Repex Investments: MAKER
The stock’s been held in check by an SEC investigation into one of its customers which we think turns out to not be a big deal for IBM. Investors need to focus on revenue and earnings growth led by the big, steady services business and the microelectronics division where there’s a new plant coming on-line.
Mike Ozanian, senior editor: BREAKER
I’m a breaker. I think there’s too much pricing pressure in this industry right now. No ability to raise prices, I think that’s put a lot of pressure on profit margins. So, I don’t really see any earnings growth down the road.
Elizabeth MacDonald, senior editor: BREAKER
I agree with Mike. I’m a breaker too, unfortunately. I just see this stock as watching grass grow. Plus, there’s lots of “smoke and mirrors” accounting there. A lot of gamesmanship, sort of with reserves. Maybe “gamesmanship” is too harsh a word to use, but they are using this kind of “smoke and mirrors” accounting, including relying really heavily on gains from the employee pension funds.
David Asman: But this is IBM.
David Sokolower: Yeah, IBM. The accounting is old issues. Now is now. And don’t be surprised, as the year goes on, technology’s been doing pretty well, it’s going to continue to get better, and you could get some nice earnings there as well.
United Parcel Service (UPS)
David Sokolower: MAKER
The stock’s been a beneficiary, and we expect that it’s going to continue to be one, of the economic expansion here and overseas. It’s a triple-A rated company, earning double-digits, earnings-wise. You’ve got good management and a real strong balance sheet.
Elizabeth MacDonald: BREAKER
I’m a breaker on this stock too. I just think that UPS is stretching itself too thin. It’s getting into financial consulting, aviation technologies, the family owns most of the voting blocks of the shares in UPS. And, also, lots of the earnings coming in future years is from an IRS settlement of a tax dispute. It’s about a billion dollars, so you have to watch with that.
Mike Ozanian: MAKER
I’m a maker on UPS. They’ve made tremendous gains in productivity in the last couple of years. They now generate $15,000 in operating cash flow, per employee, versus $14,000 for their rival, Fed Ex (FDX). So, I’m a big maker on this.
David Asman: We just heard Chana talking about the holidays coming, that’s going to be good for UPS too.
Mike Ozanian: A stronger economy will help them.
Stock Smarts: Best Bull To Come?
Usama bin Laden (search) is still out there, and he is still plotting against us. But you wouldn’t know that by looking at the market, as stocks have been on a steady rise since the lows before the was with Iraq:
Dow -- UP 25.9 percent
Nasdaq -- UP 45.9 percent
S&P 500 -- UP 27.2 percent
(Since March 11, 2003)
So what happens to this bull market if we finally get bin Laden?
Price Headley of Bigtrends.com thinks that getting bin Laden will be a “very bullish event,” especially considering how badly the market reacted to a new tape. There is still plenty of fear out there in terms of terrorism, but the stock market is plowing ahead. Price is concerned about the current scandals in mutual funds.
Hilary Kramer of A&G Capital says the capture or killing of bin Laden is bigger than the capture of Saddam, and it would be big for the market. Usama is the “head of the snake,” and we could have a “500 point pop” with his capture. And even though there are scandals out there, there is hope that things are being cleaned up
Jonathan Hoenig of Capitalistpig Asset Management says that this is a case of “buy the rumor sell the fact,” and we could see the market go down with the capture of bin Laden. Jon is no longer short the Dow. He thinks there are bigger factors than terrorism in play with stocks: higher interest rate, higher commodity prices and overall complacency. In terms of the scandals, he fears that government regulators will do more harm than good.
Wayne Rogers of Wayne Rogers & Co doesn’t think the capture of bin Laden really matters; it’s totally symbolic. The market is going to be driven by economic factors. He notes that the economy is turning around and that retail sales are up. He says the market might be a little bit ahead of itself, but it is still on solid ground. Wayne says there have been scandals “forever – it’s part of what goes on.” But in the end it will work itself out.
Jonas Max Ferris of Maxfunds.com says that there are positives in the economy, but we should isolate the bin Laden thing. The tape did hurt the market, so if we catch him, there will be no more tapes and that will be totally positive for the market. The threat of Al Qaeda (search) attacks will be much less with bin Laden out of the picture.
Be$t Bets: Bull Market Buys
If the best of the bull market has yet to come, then which stocks should you buy to get ready for the run? Our panel had the picks.
Hilary’s Best Bull Market Bet: The Limited (LTD)
Friday's close (9-12-03): $15.78
Hilary says that this is a “company that understands what women want and what men desire.” Also, the stock has a 2.5 percent dividend yield and it is expanding overseas. Jonathan doesn’t like the sector and doesn’t like the stock. Price would stay away; it’s not a bad stock, but it’s big cap, and he likes smaller stocks right now. He also isn’t too hot on the sector as a whole.
Price’s Best Bull Market Bet: Odyssey Healthcare (ODSY)
Friday's close (9-12-03): $33.79
This is a company that provides hospice care for the terminally ill. It is growing earnings 60 percent year over year, and is a leader in this industry. Hilary doesn’t like this play. Wayne loves the chart and likes the stock (as long as it continues to produce the earnings).
Jonathan’s Best Bull Market Bet: LanChile S.A. (LFL)
Friday's close (9-12-03): $10.70
Jonathan sees the next bull market coming in foreign stocks. LFL has a strong chart and is a total winner. Wayne likes this one, as the company produced its first profits since 1997, and it keeps making new highs. Price likes it as a turnaround story, but is concerned about operating costs
Wayne’s Best Bull Market Bet: PetroKazakhstan (PKN)
Friday's close (9-12-03): $18.96
This company doubled earnings is the last year and is having a 10 percent buy back; it’s good buy right here. Price loves the low price-to-earnings and the buy back. Hilary loves it too, mentioning that the company is building a pipeline to China. This stock is not for Jonathan.
Mutual Fund Face-Off: “Trusty” Funds
Now it’s the mutual funds under fire for ripping off investors. So which ones can you trust? Dagen and Jonas came up with a couple of funds you can trust.
Jonas: Bridgeway Blue Chip 35 Fund (BRLIX)
Year-to-date (as of 9-12-03): UP 16.3 percent
Minimum Investment: $2,000
Expenses: $1.50 for every $1,000 invested.
Dagen: Longleaf Partners Fund (LLPFX)
Year-to-date (as of 9-12-03): UP 18.8 percent
Minimum Investment: $10,000
Expenses: $9.10 for every $1,000 invested
Dagen, Jonathan and Wayne answered some of your questions.
We took a quick look at the standing in the $10,000 “Cashin’ In Challenge”. To find out who’s ahead, check out the website at: www.foxnews.com/challenge
Our first question came from country music legend Kenny Rogers, who asked Wayne directly what to do with his Enron stock. He bought some shares right before the company got into serious trouble, and isn’t sure what he can do with them now.
Wayne (who noted that Kenny is a great singer, golfer and a tennis player) should take those Enron stock certificates and use them as wallpaper; they aren’t going to be worth anything. Dagen says you can still sell this stock and take the tax loss.
Question: “What's going on with Janus (JNS)? Is the company in trouble?”
Dagen says that Janus was not doing right by its shareholders by giving hedge funds special trading privileges, which hurt the small investors. Janus says it will make restitutions and cooperate. But this is just another reason not to invest in this company. Jonathan says these fund companies “screwed the investors,” and they have created a regulatory risk. He would steer clear of Janus.
Question: “I've seen recent gains in my biotech investments. Is the run-up over, or is there more to come?”
Jonathan says it’s still a very strong sector, and that is the conundrum: when to get out. He says to put in some stop loss orders and let the market take you out. Wayne is not playing biotech, but he likes the idea of the stop loss order.
Wayne says the movie industry has been great to him, but this is a mistake for GE; they don’t know how to run a movie studio. Dagen says there are a lot of egos in Hollywood, and it will be tough for GE. Jonathan doesn’t like the stock.