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Bulls & Bears
This past week's Bulls & Bears:
• Gary B. Smith, RealMoney.com columnist
• Pat Dorsey, Morningstar.com director of stock research
• Tobin Smith, ChangeWave Research editor
• Scott Bleier, HybridInvestors.com president
• Bob Froehlich, Scudder Investments chairman of investor strategy
• Ken Dolan, co-author of "Don't Mess With My Money"
Trading Pit: Liberals: Market Enemie$?
Democrat leaders are on the attack trying to talk down our chances of winning the war in Iraq.
Howard Dean stated last week, "The idea that we're going to win this war, is an idea that unfortunately is just plain wrong." Are liberals hurting America and the stock market?
Gary B. Smith: Yes. These comments send two messages. 1. Thank goodness Howard Dean is not Commander in Chief. 2. It paints us as a spineless nation that can't finish the job. A spineless nation is an object of attack or potential attack. Getting attacked by terrorists weakens our financial market. It weakens everything we live for.
Tobin Smith: No, the liberals are not hurting the stock market. Wall Street is thanking Howard Dean. It is actually looking for a leader, and now we know by these comments, it's not going to be the Democrats.
Ken Dolan: I'm a Vietnam veteran. The military wins battles and Washington loses them. This is very similar to Vietnam, which was lost in Washington, but not in Vietnam. Whether we should be in Iraq or not and whether or not it affects the market, we should go in and be united. The market hates indifference. The market is telling us that we need to flush this out a little bit.
Scott Bleier: The week before we invaded Iraq, the Dow was at 7500 and the Nasdaq was at 1250. Look where we are today. (The Dow closed on Friday at 10,778 and the Nasdaq closed on Friday at 2256.) The Democrats are embarrassed by what Howard Dean said. The market would be very unhappy if we left Iraq without accomplishing the goal of a viable democratic government.
Pat Dorsey: We're not pulling out of Iraq now. But if it did happen, the pullout wouldn't matter to the market. However, over the long-term, wars cost money and this means we won't have the money for a lot of things here at home. That's a problem.
Bob Froehlich: The greatest thing the Republican Party has going for it is Howard Dean. This causes problems in the short run because it drives more volatility. It also can keep some U.S. investors concerned and on the sidelines. These comments are an attack on President Bush. Of course, when there's an attack on the President it will have an impact.
What are the best stocks under $10? The Chartman has the best bargain stocking stuffers.
Gary B. Smith: I really like Sirius Satellite Radio (SIRI). The stock just broke out and is starting its next leg up. It's also been getting a lot of press for Howard Stern's show, which begins in January. The chart has been showing real strength and is heading to $10. (Sirius Satellite Radio closed on Friday at $7.87.)
Bob Froehlich: It's going to take more than Howard Stern to make this a good investment.
Gary B. Smith: Next up, technology and communications company, JDS Uniphase (JDSU). It just broke above a long downtrend and is going to $4 by next year. (JDS Uniphase closed on Friday at $2.71.)
Bob Froehlich: This is the classic Subaru stock: built cheap and meant to stay that way.
Gary B. Smith: Sanmina-SCI (SANM) was in a huge slump, but got out of it in November. Since then, it's been moving sideways, which is a good sign. A pause after a breakout usually leads to further upside. Sanmina is set to reach the high $5s in six months. (Sanmina-SCI closed on Friday at $4.24.)
Bob Froehlich: I really don't like it.
The Pentagon could be cutting jobs in order to buy more weapons. Which stocks could get a boost?
Tobin Smith: I really like Ceradyne (CRDN), which makes armor for soldiers and military helicopters. What I'm hearing in Washington is that there will be a lot of cuts, but this is one thing that won't be cut. (Ceradyne closed on Friday at $43.24.)
Scott Bleier: This is a good company and they make a good selling product. But, that news is already built into the stock, which is very expensive. Also, Ceradyne is about to have a second offering of almost 2 million shares, which will make it very diluted.
Pat Dorsey: This stock is very pricey. If troop levels are cut, this stock could be affected because there will be less troops that will wear its body armor.
Scott Bleier: I'm betting on L-3 Communications (LLL), a mid-cap homeland defense company. Eavesdropping is a big business and L-3 makes systems for satellite and marine communications. It has acquired a lot of companies. The stock has pulled back and is now at a great price. I own and recommend it and think it's going to $100. (L-3 Communications closed on Friday at $73.90.)
Pat Dorsey: This is a very interesting company and pretty well managed. My worry is that they have gotten so big that they won't be able to keep their growth rate up.
Tobin Smith: This stock is starting to level out.
Pat Dorsey: General Dynamics (GD) is the best-managed company in the defense industry. It makes all the big-ticket items like the Abrams battle tank, Stryker assault vehicle and Aegis destroyer. It has long-term programs that will have cash for a lot of years. (General Dynamics closed on Friday at $112.78.)
Tobin Smith: Pat is right on all points, but one or two of their big programs could get cut in the next six months. If that happens, the stock will go nowhere.
Scott Bleier: All the good news is already built in.
Gary B. Smith: Air marshal shooting cools flying fears; AMR (AMR) up 25 percent
Tobin Smith: "Explore" this oil stock: GlobalSantaFe (GSF) doubles!
Bob Froehlich: Jingle-DELL, Jingle-DELL (DELL) up 10 percent by Christmas Day
Scott Bleier: Gold's glitter fizzles; down 15 percent in 2006
Ken Dolan: Scott's wrong! Gold shines $600 per ounce by mid-2006
Cavuto on Business
Neil Cavuto was joined by Jim Rogers, "Hot Commodities" author; Ben Stein, "Yes, You Can Still Retire Comfortably!" author; Daria Dolan, "Don’t Mess With My Money" author; John Rutledge, president of Rutledge Capital; Chris Lahiji, president of Daily Trends; Stuart Varney, FOX News Business Contributor; Gary Kaltbaum, president of Kaltbaum & Associates.
Neil Cavuto: A man claiming to have a bomb is shot by air marshals in Miami, does this incident prove the money we spend on Homeland Security is making us safer?
Daria Dolan: I believe it does suggest the program is working. The fact of the matter is that the guy was told to lie down and drop the bag, and instead he reached into the bag, and anybody with half a brain would have shot him if that’s what they were trained to do, and that is what these marshals are trained to do. The security system is working, and in fact it worked twice in this case because the man really didn’t have a bomb on board the plane. The problem is not with passenger screening though. The problem is where the money isn’t being spent and that’s in the hold of that plane where the cargo goes. That needs better security.
Stuart Varney: The sky marshal program, which falls under the Homeland Security budget post 9/11, appears to be money well spent. In this Miami incident, the right policies were in place, and they were implemented correctly by well-trained people. I feel a great deal safer now than right after 9/11.
Chris Lahiji: This Miami incident was an isolated event and the air marshals did their job accordingly, but I don’t think that we are spending money very well on Homeland Security. We’ve spent $150 billion in Iraq and $27 billion on Homeland Security. If you want to secure all the trains, planes and ports you need to spend a whole lot of money here! There needs to be a solid formula that allocates Homeland Security money the right way. We need an independent board that factors in risk. Instead of spending the same amount of dollars to secure cities and towns that are not likely to be terrorist targets, we need to spend more on those that are.
Jim Rogers: I don’t think we are doing a very good job with Homeland Security. I don’t think we are better off for having spent all that money. I don’t feel any safer. We have lots of enemies being built up around the world. As Chris says, I don’t see that they have done much to secure America. I would much prefer for us to spend money in America, with soldiers in America protecting America instead of making enemies in Iraq.
John Rutledge: I don’t think the Miami incident tells us anything about Homeland Security. This man was sick not evil. We need to stop being such wimps in America trying to pretend that there is security in the world when there is not!
Ben Stein: We should be spending more money on Homeland Security.
Head to Head
President Bush warning of major tax hikes in the future if his tax cuts are not extended. So far, the Republicans in the House and the Senate cannot agree on which cuts to extend. Is the GOP blowing its chance to extend cuts while it controls both houses of Congress?
Gary Kaltbaum: They better not blow it. Not only will that hurt them politically in the mid-term election, but since the Bush tax cuts were introduced, $4 trillion has been added to the stock market; the economy and business investment have been sizzling. All this has been happening because of the tax cuts, and we need that extension in place right now for it to continue.
John Rutledge: The Republicans’ problem is that they can’t control Republicans. Although the House has passed a bill to extend cuts on dividend and capital gains taxes, and that is very important. Just since those cuts were first announced in January 2003, the stock market value is up $6 trillion and net worth is up $12 trillion. Companies are adapting to these lower tax rates, and we do not want to stop them on the way to completing that adjustment. But permanent tax cuts would be even better.
Neil Cavuto: But what the House does isn’t necessarily what the Senate does.
Ben Stein: I think it’s amazing how successful the Bush tax cuts have been. I think they were an economic masterpiece that will be studied in economics textbooks for generations to come. I am shocked at the idea that they would even consider removing the tax cuts on dividends (the Senate did not include an extension of these in its appropriations bill). They have been an amazing improvement in the world of investing and saving, and they have improved the lives every person who has a dollar to save. I cannot imagine what’s going through their heads.
Jim Rogers: I have to agree Ben. That’s the best thing this president has done. He has encouraged people to save and invest, and that’s what we need in America. So if they blow that, his administration may go down in history as a disaster.
Neil Cavuto: What I am worried about is the message the Republicans are getting on the class warfare front — that tax cuts are for the wealthy at the expense of the poor, and while they have always trumped Democrats on this before, now a lot of them are becoming skittish and backing off extending tax cuts.
Daria Dolan: The problem is that Republicans have become as addicted to the pork as the Democrats, and I think they like the fact that they can spend without anyone vetoing it.
More for Your Money: Best Holiday Stock Bargains!
Ben Stein: Starbucks (SBUX) — I love Starbucks. I own shares. I don’t usually like companies that are trading near their highs, but Starbucks has become an American institution beyond words. They have an amazing business model — basically selling a cup of hot water and a few cents worth of flavoring for $3.
Starbucks (SBUX) closed Friday at $31.11
Gary Kaltbaum: I love the company, and the stock, and the white chocolate mocha lattes, but I think you have a 10-15 percent drop here on the next market weakness. It’s already had a good run. Timing is everything in the market, and I think you will be able to buy it a lot cheaper in the short run.
Chris Lahiji: Metal Management (MTLM) — This company has 40 recycling centers in 15 states. This company generates operational cash flow like a pharmaceutical company. The best of the best in the business own it. I say it hits $30 within the next 10-12 months. Metal Management (MTLM) closed Friday at $24.97
John Rutledge: I spent the last 10 years on the board of a metals company. We call it recycling now, but we used to call them junk dealers. Too much event risk, too much Gulf, Katrina, steel price, energy risk for me. I stay away.
Gary Kaltbaum: Exxon Mobil (XOM) — I think oil prices are going much higher. We’ve had a normal pullback from $70, and I think the next move is going to be to the upside, and Exxon is very cheap in here.
Exxon Mobil (XOM) closed Friday at $58.50
Jim Rogers: I am bullish on oil, but you should point out to people that Exxon is not replacing its reserves. They are not finding oil.
John Rutledge: iStar Financial (SFI) — It’s a debt REIT with and 8 percent dividend. I own shares. I know the management; I have done business with them. It’s a class act.
iStar Financial (SFI) closed Friday at $37.24
Chris Lahiji: I think they should change the name of the company to ‘Falling Star’ Financial because that’s all that it’s been doing for the entire year. The real estate boom is done. It’s a good company, but I wouldn’t be buying it at this point.
Jim Rogers: I like small U.S. electrical utilities. Since they changed the laws in the summer a couple have been bought out. They they (delete) pay dividends; they are soundly financed and many more will be bought out.
FOX on the Spot
Daria: Forget about tax reform; Bush will never get it!
Gary: I changed my mind; Bush is back! GOP wins again in ‘06
John: Stocks return 10 percent a year for the next 5 years!
Jim: Sell bonds & refinance; interest rates rise worldwide!
Ben: New Fed Chief quits chasing inflation targets
Neil: Spike in gold is bad news for stocks!
Forbes on FOX
War on Christmas: Boycott "Happy Holiday" Stores?
Jim Michaels, editorial vice president: For 150-200 years Americans of every creed, color and ancestry have been wishing each other Merry Christmas. It stood for peace on earth and good will towards man. It gave the holiday season a special meaning. Now suddenly we're told it's not holistically correct, it's exclusive not inclusive. It used to be inclusive. We're being told how we should celebrate our holiday by politically correct polices.
Quentin Hardy, Silicon Valley bureau chief: As a regular churchgoer it's strangest to me that the birth of Jesus is being used to sell X-boxes and iPods and lingerie. People have been saying "Seasons Greetings" and "Happy Holidays" for 30 or 40 years at least. It's part of the picture.
Elizabeth MacDonald, senior editor: Stores are using “Happy Holidays” because it's cheaper. It’s too expensive to have all the different signs; Merry Christmas, Happy Chanukah, Happy Kwanzaa. Even President Bush sent out a "Happy Holidays" card.
Bill Baldwin, editor: If we're going to boycott, let’s boycott the stores that use Merry Christmas. I don't want to get my religious values from the Macy's. I think that they are only out there for consumerism. They shouldn't pollute it with religion.
Lea Goldman, staff writer: Nobody cares. The only people that care are the nuts on the ultra-right or ultra-left. Those of us that are in the middle only care about one thing, and that's a sale.
Rich Karlgaard, publisher: I think the Christian market is huge. The best selling book of this decade is the "Purpose Driven Life", with 26 million copies. I guarantee that "The Chronicles of Narnia" crushes "King Kong" in the box office. Venders and retailers should not ignore this market. This is a market you dare not offend.
Jim Michaels: Stripping the religious and mythical aspects away from this makes it more crass and commercial. Christmas is about being generous and open, and that is being stripped away.
Quentin Hardy: This demonstrates the rising political power of Christians. We should mention "Passion of the Christ". That was a huge blockbuster. This really shows the power of the Christian right.
Elizabeth MacDonald: I think people are overreacting, but I do find it irritating when you go into a store and only see "Happy Holidays" signs. I think you should have signs celebrating all the religions.
Lea Goldman: You can't tell me that most Americans really care that much about this issue!
Jim Michaels: I don't understand how stripping away the religious and mythical aspects of Christmas makes it better. I think it makes it worse.
Elizabeth MacDonald: We need to keep the meaning of Christmas. We are celebrating Jesus’ birthday. That's what this is about.
Should We Ban War on Terror Lawsuits?
Rich Karlgaard: The fact is we're at war. The other fact is we don't have an epidemic of abuse. We have this one guy in Miami. The rules are pretty simple here. You don't scream, “Bomb!” on an airplane and you don't run from armed cops. This is not hard stuff.
Mike Ozanian, senior editor: You don't ban all lawsuits on planes. What if one of these air marshals freaks out and shoots a guy for no reason? Are you going to ban that too? We should have the same accountability as the police force does.
Jim Michaels: Any sensible judge would throw such a case out of court. Unfortunately, we have a lot of meat-headed judges. We cannot allow trial lawyers to mess up our defense against terrorism the same way they've messed up our defense against the medical system. An internal review board vetted by the Justice Department would be protection enough for the public.
Victoria Barret, staff writer: I have news for you. The war on terror is going to last forever. There will always be crazy people who do dumb things in public places. The answer isn't taking away rights from people. People have a right to have their day in court. Sure we have excess lawsuits in this country. You can go to court, but if you lose, you have to shell out the legal fees. Maybe that's not the best answer, but taking away someone's rights isn't.
Peter Newcomb, senior editor: There are occasions in life when we surrender our rights to sue. When you go to a baseball game and you get hit by a line drive you can't sue the baseball player or the stadium. Similarly, when you get on a jet and the air marshal wants to gun down a terrorist, you can't sue the guy if he clips you in the shoulder.
Mike Ozanian: No one is saying that you are going to sue this particular marshal. We're talking about banning all lawsuits against all forms of protecting. That's crazy!
Quentin Hardy: As much as this is a war on terror, it's a war of ideas. What are we going to stand for here? If we become a nation that agrees to remove a citizen's right to challenge their government or to sue them, then we are a nation that's agreeing to a sort of tyranny and that is bad for the war on terror.
Jim Michaels: Suing is the curse of this country.
Mike Ozanian: I'm also against trial lawyers. They're terrorists on our economy. But you don't start a blanket exclusion of all lawsuits. If you don't like the judges, vote in new judges. If you don't like the laws then you can modify them.
Quentin Hardy: You really want to eliminate any chance for people to check and balance their government? You really want to be a kind of country to stand for that? In that case, the terrorists are winning.
Jim Michaels: We have checks, we have review boards. Our citizens have a chance for a hearing. We just don't need to clog up our courts with a lot of trial lawyers who are trying to extract money from the government. The government is trying to protect us.
Rich Karlgaard: The overriding fact is we are at war. This is not some petty conflict. In all other wars, when we've won, we've had to suspend some of our civil liberties. We still have more civil liberties in this country than in any country on earth.
Victoria Barret: It looks like this air marshal in Florida made the right decision, in what was a lousy situation. I would hope that be proven quickly in our legal system. But you've got to give someone his or her day in court.
Peter Newcomb: Until we see an air marshal taking target practice on passengers, I don't think it's going to be a problem.
Quentin Hardy: We win by our example. We should not be a nation getting rid of our liberties.
Jim Michaels: The ultimate loss of liberty is when law and order breaks down and the citizens aren't safe.
Quentin Hardy: Law and order breaks down when people vote in tyranny against their own freedom.
The Next Google Stock
Victoria Barret: Google's (GOOG) brilliance was creating a totally new advertising model out of content that was already out there, the world-wide-web. I think that SIRIUS Satellite Radio (SIRI) could do the same thing. Radio is stuck in the dark ages. People want content when and where they want it. That's the way media is going.
Bill Baldwin: I think SIRIUS is one giant, orbiting, junk pile. I like a semiconductor stock, International Rectifier (IRF). They don't make microprocessors like Intel. These guys make power semi-conductors. These things go into hybrid cars, they save energy and they control electric motors.
Lea Goldman: When you're looking to spot the next Google, you're looking for growth, and International Rectifier doesn't have it. In fact they're declining. I like Alvarion (ALVR), they make something called WiMAX that is like WiFi on steroids. You'll be able to use your computer wirelessly from anywhere. It's going to make WiFi something of yesteryear.
Mike Ozanain: Alvarion is priced right but management completely bungled the acquisition of interWAVE a year ago and the show no signs of making amends. I like DRS Technologies (DRS). They make military electronics. Their earnings and sales are growing at a double-digit rate.
Victoria Barret: DRS would have been a good pick 6 months ago when its bookings were soaring. Now I don't see where they are going to get growth. They're dependant on defense contracts.
David Asman, host: It is at almost a 12-month high.
Mike Ozanain: They just made another acquisition. Their order backlog is very big. The portion of the defense budget is growing not shrinking.
Makers & Breakers
Chesapeake Energy (CHK)
Jeanette Schwarz Young, president of J.A. Schwarz: MAKER
Natural gas hit an all-time high on Friday. This stock has the most potential among the energy stocks. It has some decent insider ownership and some very good reserves.
David Asman, host: You say it can go up to $40 in one year. (Friday's close: $31.15)
Elizabeth MacDonald: BREAKER
Its total liabilities have gone up 50 percent in the first 9 months. There's some balance sheet weakness there. A lot of Chesapeake’s exploration is in the hurricane and tornado zone, including the Gulf area. I think it’s a risky play.
Jim Michaels: MAKER
Natural gas is going to stay high in price. It may be expensive, but it is a clean burning fuel. I like this stock.
• Trinity Industries (TRN)
Jeanette Schwarz Young: MAKER
These guys make big things like barges and the guardrails that are used on highways. I feel that the country has an infrastructure deficit. This is a play in building up our country as well as energy.
David Asman: You say it can go up to $53. (Friday's close: $44.25)
Jim Michaels: BREAKER
It's a boring company and is expensive. I'd pass.
Elizabeth MacDonald: MAKER
This is a great energy idea. They make railroad cars. Railroad shipping is the cheapest way to transport goods as gas prices go up. Also they're getting into wind power.
Our "Cashin' In" crew this week:
• Wayne Rogers, Wayne Rogers & Company
• Jonathan Hoenig, Capitalistpig Asset Management
• Dagen McDowell, FOX Business News
• Jonas Max Ferris, MAXfunds.com
• Charles Payne, Wall Street Strategies
• Price Headley, BigTrends.com
Stock Smarts: Memo From the Market: The 9/11 Panel Wrong About Our Safety!
The 9/11 Commission filed its report card on our security, and it's not one you'd want to bring home to mom. There were plenty of D's and F's – grades it says makes a new attack almost inevitable. If the Commission is correct, would our stock market be doing so well?
Jonathan Hoenig, Capitalistpig Asset Management: I think the market knows a lot more than the 9/11 Commission, Terry. I don't think another attack is inevitable. Who was on this committee, Howard Dean and Nancy Pelosi? We've been tough on terror. We need to stay tough on terror and focus on what's really important here — protecting American interests. Too much money has been spent on appeasing the Arabs and making sure that every Iraqi has a big-screen TV. That's not important here. Protecting Americans from state-sponsored terrorism and terrorists themselves is what matters. As long as we stay tough on the terrorists, the market is only headed higher.
Terry Keenan: Charles, is the market giving our efforts a good grade?
Charles Payne, Wall Street Strategies: I do agree with Jonathan in the sense that this 9/11 thing was dead on arrival. It's a big, cumbersome document. Both sides have been able to use it to spin their own opinions. I disagree with the fact that a terror attack is not inevitable. What the market is telling us is that it is off in the distance. There is a big timeline between the first attack on the World Trade Center and the second attack. I think it was seven years. So, I think the market says we are doing the right thing. Let's continue to do the right thing, and let's not pull troops out of Iraq just yet. That is what the market is really telling us.
Terry Keenan: Wayne, if anything, Al Qaeda is patient.
Wayne Rogers, Wayne Rogers and Company: I think Charles is essentially right. We are concentrating on other things besides that. You've got Iraq. You've got oil prices. You've got Social Security. You've got all of the scandals that are around. There are things that are taking the place of that right now. It's not high on the agenda and so people don't pay any attention to it. That means the market itself doesn't pay any attention to it.
Terry Keenan: But it doesn't, in your view Wayne, mean the market is forecasting a terror-free environment?
Wayne Rogers: No, of course not. The market is going to respond to those things that happen this week, next week, next month… It's not going to look out a few years or any of those things.
Jonathan Hoenig: Wayne, every show we used to do was: ‘A terror threat, and the market is going to drop if we go up another level on the terrorism threat meter.' Do you think that if we get a terrorist attack we're going to see the market sell off again?
Wayne Rogers: Oh absolutely, if you have another terrorist attack, but you just said you don't think there's going to be another terrorist attack in the next two or three years. I'm telling you that the public and the people who deal in the stock market do not think that there's going to be another terrorist attack in the immediate future.
Dagen McDowell, FOX Business News: But Wayne, they don't know. If you talk to investors, they don't know when there's going to be a terrorist attack, but they do believe that there will be one. If you talk to investors, many of them are taking less risk, they're shoring up their portfolios, because they are preparing for that eventual day.
Price Headley, BigTrends.com: I think that's true, Terry. I think the bottom line is that the market does expect there's going to be another attack. It's been conditioned, a little bit, to attacks, like what happened in London in July. They key to watch, as an investor, is what actually happens when the attack — if an attack hits — to the market. Like we saw in London, the market rallied for another couple of weeks right after that. Watch the tone of any kind of bad news like that.
Jonas Max Ferris, MAXfunds.com: First of all, the market is down since the report. Second of all, this report says nothing that people don't think. I think that a lot of people think that we are wasting a lot of money on fighting terrorism, more or less. The government's not being that efficient about it. But I have to say that the market is at a general discount right now to the potential for an attack, which means that if one happens, it will go down. Not as much as it would have gone down when we weren't expecting it before 9/11. It's at a perpetual slight discount. It's there now.
Dagen McDowell: The market went down during that Miami incident and then it came back when it was clear that it wasn't a terrorist incident.
Terry Keenan: But the market's also worried about bird flu and another California earthquake or any natural or manmade disaster.
Price Headley: And it is worried, Terry, about what the severity is in terms of how much it really affects our economy. Even with 9/11, the market was only down four days and then it rocketed higher for three months, so basically, you have to look at severity.
Charles Payne: Price makes a good point. The reality is, that they cannot pick a better target than the World Trade Center in terms of economic and social impact, or just any kind of impact.
Terry Keenan: That's why they went after it twice.
Charles Payne: That was the ultimate target. They're probably in position right now to do some sort of attack, but what's the target? What would it be?
Dagen McDowell: A lot of terrorist experts would disagree with you, Charles. What about some sort of chemical weapons attack or a nuclear event?
Charles Payne: But where? You can't pick a better target. I'm not saying what kind of device or what kind of method you would use, but you can't pick a better target than the World Trade Center.
Jonathan Hoenig: But, you know, one of the big beneficiaries this week, Terry, was the old classic flight to safety...
Terry Keenan: I know what you're going to say. Gold.
Jonathan Hoenig: It was a huge week, Terry. And as much as I wouldn't short stocks here, I have to respect that gold, natural gas, and a lot of the commodities are strong – I mean we're pretty heavy into gold in my hedge fund.
Charles Payne: Jonathan, that flies in the face of what you're saying, then. Gold is sort of like the ultimate doomsday type-of-thing. People buy gold when they think something really bad is right around the corner.
Jonathan Hoenig: I'm not going to speculate on terrorism. I don't have a chart for that, but I'm watching gold. It's the biggest position we have right now.
Terry Keenan: Wayne, what are you watching in this market right now?
Wayne Rogers: Essentially, what everyone is saying here is just agreeing with me. Dagen, you make this statement and then you turn around and agree with me. Of course the market is not paying any attention to this report. The market is not paying attention to anything that has to do with terrorizing, and the market doesn't care about it. If you think that, you're smoking funny cigarettes!
Terry Keenan: So what is it paying attention to? What are you paying attention to?
Wayne Rogers: I'm telling you that it's paying attention to oil prices, interest rates, inflation and Iraq and what's going on there. It's not paying any attention to what's going on in the United States as far as that Commission goes, writing about terror.
Dagen McDowell: Wayne, I don't agree with you. I think the market is paying attention to terror. Yes I do.
Jonathan Hoenig: Jennifer Aniston's boobs have more market impact than the 9/11 report.
Wayne Rogers: Exactly. Very good.
Dagen McDowell: I've said terror, not 9/11 reports. Terror worries, 9/11 report — two different things. The shooting on the plane in Miami freaked the market out. The 9/11 report does not.
Wayne Rogers: How long did it freak it out for?
Dagen McDowell: Until they found out that it wasn't a terror event. That's how long. That's what's important.
Jonas Max Ferris: If the market really didn't think that this was true, that we were totally on top of this terrorism thing, I would say the market would be 5-10 percent higher than it is right now.
Terry Keenan: You're saying that's what's keeping the market from going higher?
Jonas Max Ferris: The market thinks that we're going to get attacked again at some point, it needs to discount it, just like there could be inflation.
Charles Payne: Look, the bottom line is that we are all somewhat afraid of terror and the market reflects that. I think also, in the greater scheme of things, is Iraq. If we keep banging the drums on getting out of Iraq too early, it's going to keep this market where it is. And that's one of the reasons the market isn't up; because there are so many people, even republicans, talking about pulling out of Iraq prematurely.
Terry Keenan: The president's poll numbers are turning around a bit. Do you think that will help?
Charles Payne: That's helping the market. The market already predicted that with its November run.
Question: "Is it time for Congress to make it illegal to cut "promised" pension benefits?" – Doranne, Colonia, NJ
Wayne Rogers: Doranne is right in the following sense: If you make a contract with your worker, and you say, ‘listen, I'm going to pay your pension. I'll match $X and put that in a pension plan,' and you don't pay off and choose bankruptcy to avoid that, yes — something must be done. That's wrong.
Jonathan Hoenig: The answer to this problem is not more government intervention or regulation of private markets. I think if you enact something like this, you're going to put a hell of a lot of companies out of business, and a heck of a lot of people out of work.
Dagen McDowell: Jonathan, I totally agree with you. Frankly, everyone has to face the fact that pensions are going away. They're gone. You've got to contribute to your 401(k) plan. That's the future.
Wayne Rogers: That's the reality of the situation. I'm agreeing with that reality, but what I'm saying is that it's morally wrong.
Dagen McDowell: Absolutely, it's morally wrong. But fixing it is a different problem, so workers in this country need to face the reality.
Terry Keenan: Jonathan, what about workers in their 60s who, for 30-40 years, have been depending on these pension plans and, as Doranne said, taking a lower salary because of it?
Jonathan Hoenig: Terry, my heart goes out to them. But a lot of these companies that are having major pension problems have been having problems with their underlying business for years. Ideally, you have a system as Dagen outlined, where everyone is responsible for his or her own pension and don't have to rely on whether it's General Electric (GE), General Motors (GM) or Delphi or the U.S. government to fund their retirement.
Dagen McDowell: The lawmakers, though, and the president too, are trying to fix this problem and make companies fully fund those pensions. I know you hate that, but maybe it will work.
Question: "I bought Microsoft (MSFT) at $28 with the release of the Xbox 360. What do you think about the stock?" – Tess Ehli, Dickinson, ND
Dagen McDowell: The Xbox is hot, but it's not going to heat up the stock at all. The company is just too big. Even if it catches up and passes the Playstation 2 (SNE), which has sold about 100 million, it's not going to mean anything for the stock. Xbox is great, but the stock only has about 10 percent upside with this machine.
Jonathan Hoenig: I know Microsoft has been dead money for years, but I've got to say that tech is back, and Microsoft is not the dead stock that it once was.
Terry Keenan: Would you be buying it?
Jonathan Hoenig: You only have so much risk capital. We don't own it, but I think she's flat on the trade, so I'd put a 10 percent stop/loss and let it ride.
Wayne Rogers: I own Microsoft. It's up 4 points in the last three months, so I'm happy with it.
Question: "I know Jonathan has liked some international stocks in the past. Does he have any he is looking at now?" – Maria Blaxton, Midland, GA
Jonathan Hoenig: I wish I owned more Japan. I think a good way to participate is an exchange-traded fund, BLDRS Asia 50 ADR Index (ADRA). It's got a big allocation in Japan. I think it's a smart trade right now. We don't own it in the fund, but you're going to make money there in the next 12 months.
Dagen McDowell: If you want to get more countries outside of Asia, you can look at the Vanguard Total International Stock Index (VGTSX). You can get them all, except maybe the U.S.
Wayne Rogers: Empresa Nacional de Electricidad (EOC) is my favorite. I like all of these stocks. I think we're fishing in good waters overseas.
Terry Keenan: And you still like a lot of your Chinese holdings?
Wayne Rogers: Yes.
Cash Count: Best and Worst Picks of 2005
From the land of the free and the home of the brave are our groups Best Bets. The boys are back with their all-American picks.
Jonathan's Best Bet:
CPFL Energia (CPL)
Since Then: +62 percent
Wayne's Best Bet:
Since Then: +37 percent
Jonas' Best Bet:
Thor Industries (THO)
Since Then: +30 percent
"Cashin' In" Challenge
If you think you can match wits with our "Cashin' In" crew, starting in just a few weeks, you will get your chance. Log on to www.foxnews.com/challenge and coming soon, you will be able to sign up for the 2006 Challenge and go head-to-head with our experts.
Jonas' Bad Call:
Since then: -4.5 percent
Jonathan's Bad Call:
Nuveen Senior Income Trust (NSL)
Since then: -15 percent
Dagen's Bad Call:
STAY CLEAR OF Hewlett Packard (HPQ)
Since then: +34 percent
Wayne's Bad Call:
On November 12, "Bulls & Bears'" Gary B. Smith stopped by to offer Wayne picks to improve his standings in "Cashin' In Challenge." Wayne did not buy any of the stocks.
Wayne's current portfolio: $9,053
With Chartman's stocks: $9,624