Your Questions Answered

Gary Kaltbaum
This week Gary Kaltbaum, president of money management firm Kaltbaum & Associates, answers YOUR money questions. Ask FNC's business team your questions by e-mailing and check back each week. Plus, tune in to "The Cost of Freedom," Saturday starting at 10am ET.

1) I bought a small amount of CSCO. It seems to be on a continual downslide, and I am below what I originally paid for it per share. I have been looking at what analysts are saying, and they all say to hold on to the stock. Would you recommend that I dump CSCO or hold on to it? — Jeanne Z.

You have to separate CSCO the company from CSCO the stock. CSCO the company is by far still the leader in computer networking. CSCO the company continues to be the innovator. That said, the main problem for CSCO is that their growth rate has slowed because of how big the company has become. It is no longer the nimble stock it used to be. CSCO the stock has over 6 billion shares outstanding. It is just very tough for a stock to be moved with that amount of shares. Names like MSFT, ORCL, SUNW have also had the same problem. The best news I can give you is that the company is still growing in the mid teens and is now trading at the lowest price/earnings multiple in years. I suspect that if they can continue to grow at that rate, eventually the stock can start moving up slowly again.

2) Why is the investor community not more outraged by attempts by the far Left to undermine our economic system and replace it with a quasi-Marxist model? It appears that there is widespread complacency in the financial community. — Gene (Fort Lauderdale, FL)

I think the investor community already knows there are some out there who would like government to control everything in your life, but market forces reign. Every time someone has tried to control either prices or supply, it has caused huge dislocations. There is no doubt in my mind that anytime someone proposes something like a windfall tax on oil companies, it will get shot down very quickly. Socialism does not work.

3) Why are all the business reports covering the big oil companies' recent profits not revealing that these profits results are actually 6.7%(BP) to 9.9%(XON), which is almost 33% lower than the average profits(12.7%) for the S&P 500 group? You may want to straighten Bill O'Reilly out on this factoid. — Don

Most oil companies' earnings were very strong in the past few quarters for obvious reasons. I have to disagree with you because BP's earnings were up 47% and XOM was up 38%. I am not one who believes oil companies are bad. They are in business to make profits, and when profits are to be had, they should reap them. I still recall that in the mid- 80's, oil prices were under $10. Many companies in Texas went belly-up. I didn't see anyone lifting a hand for them at the time. Why turn them into bad guys just because prices have gone up?

4) Do you see any value in the retail sector? I own BEBE; is it safe to add more at these levels? — Ventsi

I do see value in retail — especially after the recent big drop — but I am not thrilled with BEBE right now. Their earnings and revenue growth dropped markedly in the past quarter and recent trends do not look like they are improving. Keep in mind, this is a specialty retailer...where if you miss a couple of trends, you end up with horrible quarters.

5) What is your assessment of TPX? Is it a buying opportunity in the $10.00 range? — Elmer

I am not thrilled with TPX as a company. They have had to change strategies a couple of times, and I'm not sure they are on top of things. They are in the midst of trying to figure out whether the low-end prices are better than the higher end. The only good news is that the stock "feels" sold out here and maybe wants to bounce. That said, I would rather own leading stocks in the market. This is not a leader.

Gary Kaltbaum is president of money management firm Kaltbaum & Associates. He can be heard nightly on his nationally syndicated radio show "Investors Edge" on over 50 radio stations. He is a regular on FNC's Business Block. Visit Kaltbaum's Corner on for more.