DISCLAIMER: THE FOLLOWING "Bulls & Bears 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 "Bulls & Bears Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Brenda was joined by: John “Bradshaw” Layfield, WWE Superstar and author of Have More Money Now; 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.
Is the bull market dead… or are stocks just taking a breather?
The Dow was heading up to 10,000 through September and October, typically bad months for the market.
But so far in November the Dow’s down almost triple digits -- despite strong stats on earnings and the economy. However, there has also been deadly Al Qaeda attacks, more death in Iraq, and a mutual fund scandal where money managers are making money at your expense.
Scott thinks the bull market is just taking a breather. He said we’ve lived with the Iraq situation for a while now, but the mutual fund scandal is snowballing. The scandal is causing people to sell their funds. This creates selling in the market by these mutual fund money managers. But Scott thinks this creates a buying opportunity for individual investors. He advised investors to buy the stocks these funds are selling, because individual investors can do better buying their own stocks, instead of buying mutual funds.
Bradshaw also believes the bull is taking a break. He said the market has had a huge run up this year. He agreed that people are taking money out of mutual funds, but they are taking it out of those specific funds that were involved in the scandal. He believes the money that was in the funds is going to stay in the market because money stays where money is rewarded, and right now money is being rewarded in the stock market.
Tobin said the average bull market lasts 39 months. This current bull market is 9 months old, which means there should be 30 months left. Due to the market’s run up, people feel like they missed their chance to make money. But Toby said when the market dips, like it has done in November, it creates a buying opportunity. Like Scott, he thinks investors can do much better on their own than with mutual funds.
Gary B. charted the S&P 500 and said it’s had some trouble closing above 1060. But like all the other Bulls & Bears, he thinks the bull is just taking a breather. (The S&P 500 closed at 1050 on Friday.) He said the true test for the bull market will be at the 2002 highs near 1175.
Pat completed the total agreement that the bull’s just taking a breather. He said there are some stocks that are values right now. Some of the stocks he likes include drug stocks, Anheuser-Busch (BUD), and housing related stocks like Freddie Mac (FRE), Fannie Mae (FNM), title insurance companies, and home builders. He added that if there is a large size sell-off due to the mutual fund scandal, like the corporate CEO scandal last year, it will be temporary.
Bradshaw, Scott, and Tobin each picked the best stocks to buy if you want to sell your mutual funds.
Bradshaw picked Oracle (ORCL) because it makes a lot of money and has very little debt, and has plenty of room to grow. Tobin and Scott both don’t like the stock because the company has too many problems. (Oracle closed on Friday at $12.29.)
Tobin chose insurance company, Unitrin (UTR). He said it should hit $45-48 in the next year because it has earnings that are growing nicely and it has good overall growth. Also, it pays a 4 ½ percent dividends. Bradshaw does not like the stock and said if investors want to buy an insurance stock, they should buy American International Group (AIG). Scott said the stock is up a lot over the past couple of weeks and has gotten too expensive. (Unitrin closed on Friday at $38.05.)
Scott selected General Electric (GE) because it has lagged the bull market over the last nine months. He thinks the new chairman of the company, Jeffrey Immelt, is going to move the stock to $35 in the next couple of months. (General Electric closed on Friday at $27.88.) Bradshaw owned this stock until about two weeks ago. He said he’s scared to get back in it because 40 percent of its revenue comes from GE Capital. Tobin said Scott has made a lot of good picks on the show, but this is not one of them.
If you still want to own mutual funds, Pat Dorsey found two that he says are honest and will make you big bucks. But will Gary B. agree?
Pat’s first choice was Dodge & Cox International (DODFX). He said it’s smart for investors to have an international fund and this one is a young fund with a bright future. It has great diversification, low expenses, and its managers have a great reputation and track record. Gary B. said the chart looks good. He compared this chart to the overall market. He said both have been rising steadily since March. Like the market, if Dodge & Cox moves above its resistance ($22) Gary would be a buyer. (Dodge & Cox closed on Friday at $21.96.)
Next, Pat chose Oakmark Fund (OAKMX). He said it’s a great fund with no scandal worries and made money when most funds were down. Also, this fund has low expenses and makes smart, creative stock picks. Gary said Oakmark is in a bit more dangerous situation than Dodge & Cox. He thinks its upward momentum is drying up. He advised to dump the fund if it falls below $35, which would be below its current uptrend line. (Oakmark closed on Friday at $36.08.)
Next hot stock Chinese stock: China Unicom (CHU) up 50 percent by spring
Gary B's Prediction
Bradshaw gets last laugh! Merck (MRK) hits $50 by year end & up 20 percent in '04
Oil from outside the Mideast is key; Exxon Mobil (XOM) is a buy!
Royal Dutch/Shell (RD) a bargain; worth 20 percent more than current price
Zoran (ZRAN) is picture perfect! Up 20 percent by January 15