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; 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
Cavuto on Business
Neil Cavuto was joined by Gregg Hymowitz, founder of Entrust Capital; Jim Rogers, president of JimRogers.com; Ben Stein, economist; Meredith Whitney, Fox Business News contributor, and Charles Payne, CEO of Wall Street Strategies; Jacob Hornberger, founder of Future of Freedom Foundation.
Neil Cavuto: Could people who want to duplicate 9-11 be set free, dealing a severe blow to our war on terror and the stock market? The Supreme Court will decide the fate of those alleged al Qaeda members being held at Guantanamo Bay in Cuba, to determine if they can be held indefinitely without formal charges being filed.
Ben Stein, do you think if any of these prisoners walk, or if there is a timetable for trials, that hurts the stock market?
Ben Stein: No not at all. If we allow these foreign nationals to have trials and plead that they should be released, it has no effect on the stock market. The stock market runs on the basis of respect for law. These trials just show the respect for the law and the free enterprise system.
Jim Rogers: Ben, you're exactly right, and I'm ecstatic to hear you say that. This will have no effect on the economy or the stock market. Our enemies want us to become a closed off society and send these guys to jail with no trials.
Neil Cavuto: A lot of these prisoners at Gitmo have been held for many, many months, oftentimes without any formal charges. If more of their rights are considered, does that make people think we're becoming lax on security?
Charles Payne: I think if these prisoners were let go, it would be used as an indictment against this administration and our policies.
Neil Cavuto: Were most of these guys rounded up in Afghanistan?
Charles Payne: They all come from different countries, but I think most are of Middle Eastern decent. It wouldn't crush the market, but I think it would have a negative impact.
Gregg Hymowitz: It's not an indictment that we use our laws and due process. If we're fighting for democracy all over the world, to not extend that to our own prisoners, our own rules and regulations is silly.
Neil Cavuto: Franklin Roosevelt, a democrat, went ahead and acknowledged, and endorsed, and accepted thousands of Japanese being held in prison for years.
Gregg Hymowtiz: And that is one of the biggest blights on his administration and on the Supreme Court. They were absolutely wrong and it was a disgrace.
Ben Stein: I don't understand what the mechanism is that would connect this with the stock market. Let's just say there are thirty guys who are going to be allowed to go into a district court and say that they should not be held here and that they should be tried in their own countries. How does that connect with the discounting of flows of future earnings, which is what the stock market does.
Charles Payne: There are a lot of things that do not have a direct correlation with the value of Wal-Mart but it doesn't mean it won't effect the stock on a day to day basis. We know this already. I'm just saying from a moral point of view, this is sort of like martial law. This is an emergency situation.
Gregg Hymowitz: We're fighting for freedoms and liberties all over the world, but we're not going to abide by it ourselves?
Jim Rogers: Even if we could let them all go, the stock market could care less.
Neil Cavuto: If there's a perception out there that some of these guys might be terrorists who are intent on hurting us and then five or six of them, or even forty of them walk, you don't think that would weigh on people's safety concerns?
Jim Rogers: Not if they're innocent. Not if they haven't done anything.
Ben Stein: They're not going to be talking about letting them walk. They're going to discuss if they'll just have a trial. Surely we cannot deny them a trial. I assume they're scum bags, but at least they deserve a trial.
Gregg Hymowitz: Neil, do you feel we prove we're strong on terrorism by denying these people a trial?
Jim Rogers: That's what our enemies want. They want us to close off and be an oppressive society.
Neil Cavuto: I'm not judging whether a trial is right is wrong. What I am saying is the appearance of any one of these guys going, could that have an effect on the markets? What happens to you, Charles, as an investor when you think people who have perpetrated terror are walking?
Charles Payne: There are a lot of things that impact the psyche of investors. Terrorists have a way of using democracy and finding loopholes in freedom. That's why they were able to walk on these planes with these weapons and no one attacked them.
Gregg Hymowitz: They're not terrorists until you prove that they're terrorists. Just because we think they're terrorists doesn't mean we keep them locked up.
Neil Cavuto: Just on that logic, during World War II, when we attack an enemy position and we take people prisoners how long do we hold them prisoner?
Ben Stein: They were not held prisoner forever.
Neil Cavuto: You just proved my point.
Ben Stein: We had some German saboteurs that were captured in America. Even they were allowed to have a day in court.
More for Your Money
Neil Cavuto: Should you be buying the same stocks as Bill Gates to get more for your money? Right now Bill Gates is betting on biotech. And he's betting big on some little known firms. But should you follow Bill's lead? Biotech has paid off big in the past, just as an example: if you had put $10,000 in Amgen (AMGN) a decade ago, when it was a little known firm, today you'd have more than $100,000. To compare, the Dow would have given you less than $27,000 over the same period.
Meredith Whitney: I think there's been a lot of growth, as proven by the biotech stocks in particular this year, because there have been so many filings to the Food & Drug Administration. The FDA had a new chief who was approving a ton of new drugs. That momentum has slowed down a bit and it's been reflected in the stocks going down. The FDA has been cutting its budget. It's perceived that regulatory approval will slow down as well. Bill Gates has a little more money than the average investor to throw around. I would pick industry leaders like an Amgen (AMGN) or Genentech (DNA). There are better sectors out there available.
Gregg Hymowitz: I think the FDA is the one shining star in the biotech sector right now. There have been a lot of issues with biotech and not a lot of money flowing into biotech, not counting Bill Gates. Increase in supply always hurts the biotech area and that's why stocks have badly performed. And also, biotech tends to be a non-cyclical growth story. So a lot more money has been going into those cyclical growth areas like the semiconductors and the tech stocks. That being said, it is expensive and the only bright spot is the FDA.
Jim Rogers: Biotech is going to change our lives. We are going to be different people in fifty years because of biotech. But investing in it is an entirely different thing. The dot.com business changed our lives but did anybody make any money? Virtually nobody did.
Neil Cavuto: In the beginning they did.
Jim Rogers: Our viewers should not be investing in this stuff unless they know a lot about it.
Ben Stein: I wouldn't touch biotech stocks with a ten-foot pole at this point. The fact that Bill Gates made a trillion dollars with Microsoft doesn't mean he knows a thing about biotechs. That does not mean in any sense that we should or should not follow his lead. But biotech is a heartbreaking sector. It rises fast, and it falls fast.
Charles Payne: There's no doubt that biotech stocks are cult stocks. When they start to run there's just a group of people who think that XYZ has the cure for cancer. And usually it's wrong. As an individual investor I would be leery of biotech stocks that are one-trick ponies. I like the larger ones. I like Genentech (DNA), the first publicly traded biotech company in America. If you just look at their financials, they're a top line revenue group. The growth grew higher and the revenue grew even higher. I own it.
Meredith Whitney: The pipeline is rich with IPO deals. And biotech IPOs have not done well. The pipeline is not so rich with new drug releases. That's slowing, and as a result the group can't do that well because the stocks are really traded off product releases. I like the large companies like Charles. I like Amgen (AMGN), which I do not own.
Gregg Hymowitz: If you want to play a very small percentage of your money, 1 or 2 percent, you can buy the Merrill Lynch biotech holders, ML Biotech Trust (BBH). They basically mirror the twenty biggest biotech companies. I don't own them, but if you had to have a biotech company this would be a good way to go.
Jim Rogers: The way to make money is to stay with what you know, and put all your eggs in one basket that you know, and watch the basket very closely. Forget diversification. That's not the way to get rich.
Head to Head
Neil Cavuto: Would it be good for America and business to tell France how we really feel? With me is Jacob Hornberger, founder of the Future of Freedom Foundation. Jacob, you have a reputation for being a nice diplomatic guy. I think that that's the problem in international relations. No one really says what's on their mind. We don't get to the point. France doesn't get to the point, and, as a result, things are in limbo all the time.
Jacob Hornberger: Well, let me get to the point. I think we're so accustomed to scapegoating and French bashing that we're missing the point. The point is, as we learned in kindergarten, you clean up the messes that you make. And the mess here in Iraq is made by the U.S. government; it's made by the U.S. media that cheered on this U.S. invasion. That's created a death trap for our troops. I think we need to stay away from the French bashing and start cleaning up our own messes here.
Neil Cavuto: Why can't we say, look we've done a great deal to help you France in the past. You are talking about us being rough and brutal in trying to liberate a country when you had no problems siding with a butcher who ran that country. Why can't we just say that instead of just couching it as we have in the international community?
Jacob Hornberger: Why can't we just say that the United States government had as one of its primary allies Saddam Hussein. That Saddam Hussein got his weapons of mass destruction from the United States and that we bear the responsibility for that.
Neil Cavuto: Then why don’t the French say, yeah we did that too. Here's my point. I'm saying, call a spade a spade. There is such gray diplomatic talk that no one gets to the point.
Jacob Hornberger: Including yourself Neil. Were you bashing the government postal monopoly for participating in the Tour de France after calling for a boycott of French wine? Of course you weren't because you don't want to be criticizing the federal government or its monstrosities, monopolies.
Neil Cavuto: We've criticized this government and this President many times on this show and others on this network. My point is this. Just be clear. The French have said long before this that they value their relationship with us. Jacque Chirac kissing Laura Bush on the hand. It's just a phony way of going about things. What if Bush just said, you know you just seem to be a phony worm. If Chirac just got back at Bush and said, you just seem to be a militant cowboy. Instead of saying that, everyone, on both sides, couches their opinions and I think in the longer term that hurts our international relations.
Jacob Hornberger: It's not a big surprise that politicians everywhere are phony, including those here in the United States. What would you really have the French do. Send their young men and women to go die like those Italian soldiers did? What do you really want the French to do?
Neil Cavuto: Here's what I would say, before you start talking about your conviction to start helping people deal with those and help those who've helped you when no one else would.
Jacob Hornberger: We are a nation of individualists not collectivists Neil. The French don't owe me anything.
Neil Cavuto: But Jacob, if I call you a friend then when times are tough I expect friends to stand by me.
Jacob Hornberger: We're talking about individualism not collectivism Neil.
Neil Cavuto: It wasn't individualism that triumphed in World War II.
Jacob Hornberger: Those people who fought World War II are dead.
Neil Cavuto: So we don't owe them or their commitment anything?
Jacob Hornberger: I don't owe anything to any Frenchmen anymore than he owes to me because he helped us win a revolution in 1776.
Neil Cavuto: Well, you spoke your mind and you said something I would've vastly preferred hearing out of Jacque Chirac and I did not.
Jacob Hornberger: I feel the same way. They're all phony Neil.
FOX on the Spot
Meredith Whitney: Gassing up! Buy natural gas stocks.
Charles Payne: Ignore the bears! Dow 10,500 by year end.
Gregg Hymowitz: More mutual fund scandals hurt the market.
Jim Rogers: Trade war will hurt market.
Ben Stein: Iraq gets worse before it gets better, but it's worth it in the end.
Neil Cavuto: Christmas decorations are out the earliest they've ever been, and besides me liking that, I think they bode well for holiday spending, and this will be the best holiday spending in at least five years.
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: Wal-Mart (WMT) is huge store chain with over a million employees. That’s more than anyone except the U.S. Government. So when Wal-Mart's got a problem, a lot of people stand to get hurt! Could the company's legal problems with immigrant labor become a problem for all of America? Bill, we’ll go to you first. Talk about this labor problem that they’ve got.
Bill Baldwin, editor: You mean the fact that Wal-Mart got caught with these illegal aliens working at it’s stores? They said ‘we didn’t know anything about it.’ Maybe, maybe not. I think there’s a bigger issue here. We’ve had a glorious decade of deflation. And it’s been made possible by the willingness of many foreigners to work for very low, un-American wages. The Chinese: Wal-Mart brings in a lot of Chinese apparel, and now the Mexicans who come across the border to take jobs polishing floors. I think there’s going to be a backlash in that kind of deflation, and I think you’re seeing it in the immigrant raids against Wal-Mart, and you’re seeing it in the protectionist stance that you hear from politicians.
David Asman: But, bottom line is you think this is not only going to hurt Wal-Mart, but the economy in general?
Bill Baldwin: This is a harbinger of a backlash against cheap labor.
David Asman: Victoria, is this really tough on Wal-Mart, and the whole economy? Everybody?
Victoria Murphy, senior reporter: I think we might be overreacting a little bit, here. Cleaning is a percentage of overall costs at a place like Wal-Mart or casinos or hotels.
David Asman: Let’s be specific. It’s the cleaning staff that employed a lot of illegal aliens. Some of whom were subcontracted, by Wal-Mart, but go ahead.
Victoria Murphy: Right. I think in the long run, it’s not a huge deal. Now, if we go around raiding farms in California, that’s a big deal, because a large percentage of that labor is done by illegal immigrants. But, for Wal-Mart, I don’t see this as a huge issue, and I don’t think it’s going to affect the stock price.
David Asman: Steve, a lot of average businesses employ illegal immigrants. I’ve worked in kitchens across the country that employ illegal aliens.
Steve Forbes, editor-in-chief: Yeah, this whole thing underscores the need for real immigration reform. If we have need for people from overseas, do a work program, so we know who’s coming in. They’re here for a specific period of time, then you can send them home, and then they can come back again.
David Asman: Temporary workers. Don’t give them citizenship or green cards, but temporary workers.
Steve Forbes: Absolutely. Bring it above ground, instead of this crazy illegal alien thing, where you get corruption, you get exploitation. Bring it out in the open so we can police it. Especially in this age of terrorism.
David Asman: Quentin, isn’t that a better way?
Quentin Hardy, Silicon Valley bureau chief: Well, Steve’s got a little solution there, but we’d better focus back on the problem. Is this a problem for Wal-Mart? Hey, it’s a problem for Wal-Mart because they outsourced their responsibilities, and those companies evaded the law. They did not respect workman’s compensation, they did not respect overtime, they didn’t respect minimum wage. You know, they’re outsourcing their responsibilities. That gave Wal-Mart a price advantage over their competitors. I say it’s a big problem for Wal-Mart because they put guys out of business by disrespecting the law – the current law. You want to change it? Great. But it should be a problem for Wal-Mart. They disrespected the law.
Steve Forbes: It was not illegal immigration that enabled Wal-Mart to do what it did in terms of pricing. It was smartness and sophisticated technology. And what Wal-Mart is undergoing is the fact that it’s successful, it’s a target, and people want publicity, and they’re going after them.
David Asman: Will they survive?
Steve Forbes: Yes.
Makers & Breakers
• Ford Motor (F)
Bernie Schaeffer, Chairman of Schaeffer’s Investment Research: MAKER
Ford Motor Company, to me, this is what you see at a major bottom. Twelve forward P.E., 3 ¼ percent dividend yield. Problems, but very, very well publicized problems. Selling at it’s lowest level relative to GM, since early 1997, which was a great time to buy Ford. Plus, contrarian sentiment. A new book out called “The End of Detroit,” magazine cover in The Economist a couple of months ago, saying ‘the extinction of the car giants’ with a Ford vehicle on the cover.
David Asman: $13 right now, (Friday’s close: $12.96), what’s the target price?
Bernie Schaeffer: $20.
Elizabeth MacDonald: BREAKER
No way. S&P just downgraded to just above junk. They have a lot of problems with their European division. Cash flow and profits are not coming in as strong as the company would like. I hate to say it, but I’m a breaker on this stock.
Jim Michaels: BREAKER
I’m afraid I’m with Elizabeth on this one. They’ve got a lot of problems ahead of them, they’ve got to strip out excess capacity, they’ve got to get new models that they don’t have, I wouldn’t buy this stock.
Bernie Schaeffer: You know you’re at a bottom when you get bad news, like a downgrade. Ford’s debt rallied sharply, and Ford’s stock rallied sharply. It’s in the stock.
• Research in Motion (RIMM)
Bernie Schaeffer: MAKER
Exploding growth; they’ve grown by about 30 percent in the number of Blackberries out there over the past couple of months. Strongly beating earnings expectations, and the sentiment is extremely negative on the stock, despite the strong price action.
David Asman: It’s trading at $45, (Friday’s close: $43.87), what will it go up to?
Bernie Schaeffer: It will go up to $75 within a year.
Jim Michaels: BREAKER
The Forbes Wireless Stock Watch has a sell on this. They had a buy on it at $13, they have a sell on it in the 30’s. All the good news is in the stock, including that wonderful gimmick, that gadget that they’ve got.
Elizabeth MacDonald: BREAKER
Bernie Schaeffer: Three billion dollars market cap for Research in Motion, $80 billion market cap for Nokia, plenty of room for Research to rally.
It was a bloody October in Iraq, and until now, the market has rallied in the face of so much pain. But is the war finally starting to take its toll on stocks?
Retired Army Colonel David Hunt, Fox News Military Analyst says it was indeed a terrible month in October in Iraq as we lost thirty-five soldiers there, but he believes that the U.S. decision to accelerate an Iraqi takeover plan will help stem the tide of violence. He believes that we will begin to see an improving situation there by the end of the year.
Jonas Max Ferris of Maxfunds.com says the market had priced in a quick and decisive victory in Iraq, and as the post-war pain continues, a market reaction is inevitable. He believes we are about to see that post-war pain reflected in lower stock prices.
Dagen McDowell of Fox Business News says that the Bush administration is acting aggressively to correct problems in Iraq, and the market will reflect that and continue to hang tough.
Price Headley of Bigtrends.com points out that the while the market does pullback the morning after a bad day in Iraq, it tends to shrug off the bad news by the end of that trading day. That’s a bullish indicator. He says money managers have too much cash, and they have to invest it despite the post-war pain.
Wayne Rogers of Wayne Rogers & Co. says the market is reacting to the economy and not Iraq right now.
Joe Battipaglia of Ryan, Beck & Co. says the perception is that we are losing our way in Iraq, and that could cause investors’ confidence to roll over if that perception is not changed soon.
Best Bet$: Bargain Stocks!
Find a stock that has been beaten down for no good reason, and you have found a bargain! Our crew named their favorite bargain buys right now.
Hilary's Bargain Stock: ConAgra Foods (CAG)
52-week high: $26.30
52-week low: $17.75
Friday's close (11-14-03): $24.25
Hilary says ConAgra is a great buy right now because it is misunderstood by Wall Street and selling way below what it’s worth. She cites insider buying as evidence of its attractive bargain price. Hilary owns shares in ConAgra. Joe says this stock has been a dog for a long time, and he thinks it still is a dog. Jonathan says this is a strong stock in a strong group, and he likes it.
Price's Bargain Stock: Verizon (VZ)
52-week high: $44.31
52-week low: $31.10
Friday's close (11-14-03): $32.61
Price says Verizon will benefit from the rule that will allow cell phone users to take their phone numbers with them when they change service because it is the largest and best-positioned provider. That rule goes into effect on November 24. Price does not own Verizon yet, because he thinks it could trade a bit lower on tax-loss selling, and that’s when he plans to buy. Joe is concerned that the new rule will hurt Verizon by shrinking its home service and offset any benefit Verizon may see on the wireless end.
Joe's Bargain Stock: LaBranche & Co. (LAB)
52-week high: $30.66
52-week low: $8.26
Friday's close (11-14-03): $8.34
Joe says this NYSE specialist firm is under siege from regulators and trading way below its actual value. He believes the company will survive the threat posed by regulators, making it a great buy at current prices. Jonathan calls this stock purchase a “death wish” because the company is on Eliot Spitzer’s radar screen, and he says he wouldn’t touch the stock right now. Price thinks new management at the company will ultimately help it. He says the stock may remain under pressure in the short term, but could be a good long-term bet. Hilary doesn’t like the stock.
Jon's Bargain Stock: Portugal Telecom (PT)
52-week high: $9.14
52-week low: $5.91
Friday's close (11-14-03): $9.04
Jonathan says the weak dollar is helping many European stocks and he likes the European telecom sector. He owns shares in Portugal Telecom. Price says it’s a strong stock in a weak sector and he thinks it could pull back. Joe says there are other parts of telecom where you can make more money and get greater liquidity, Portugal’s not the place.
Face-Off: Dow 11,000?
Is the Dow headed for 11,000 sooner than you think? Joe, Hilary and Jonas faced off over Dow 11,000.
Joe’s case: “The economy grows by 5.5 percent with 2 percent inflation, earnings rise to $58 on the S&P and the Federal Reserve doesn’t budge.” When you consider all this and the fact that all we need is a 10 percent move to get to 11,000 on the Dow, he says it will be done by this time next year. Hilary says we have had such strong growth so far that positive expectations are already baked into the market and it’s not going higher anytime soon. Jonas says the Dow is going to fall to 9500 by this time next year.
Cashin’ In Challenge
To find out who’s ahead in the $10,000 “Cashin’ In Challenge”, check out the Web site at: www.foxnews.com/challenge
Joe, Jonathan and Wayne answered some of your questions.
Question: “What's going on with Mylan (MYL)? The news from the company is great, but the stock is slumping. Why?
Joe says investors had great expectations on earnings; they came and went, and there wasn’t much more out there to move the stock. Plus, the company is involved in lawsuits with some larger companies like Johnson& Johnson (JNJ) and that is weighing on the stock. Jonathan doesn’t like the stock. Wayne says the fundamentals look good, but the chart looks terrible, and he wouldn’t want to own the stock right now.
Question: “Are there any publicly traded companies that could benefit from the rebuilding of California after the fires?
Wayne says the homes that need to be rebuilt are individually owned, and so the only companies that could benefit are home building supply companies like Lowes (LOW) and Home Depot (HD). Joe says he would not be buying housing stocks right now; he’d be taking profits.
Question: “What do you think about Ivanhoe (IVAN)? I bought it at $0.97 and it's up around $6. Should I hold, sell, or buy more?
Jonathan says the only reason to sell a huge winner like this is if it has become too big a part of your overall portfolio, otherwise put some stops just under where it’s trading now and let the market take you out. Joe says this stock looks like it is being driven by “wild-eyed speculation,” and he would use that to his advantage and take profits now.
Question: “I own a lot of Intel (INTC) and have made some good short-term profits. Should I sell, or do you see the stock climbing?”
Wayne thinks there is more upside to Intel. He owns the stock and likes it here. Jonathan says he wouldn’t bet against it, but it’s not his choice for new money. Joe says it’s the market-share leader, a low-cost producer, and in a rallying economy like we are in now, he calls this stock “a buy.”