Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, CEO of ChangeWave Capital Partners; Scott Bleier, Fox Business News contributor; and Joe Battipaglia, Chairman of Investment Policy at Gruntal & Co.
It's been a tough year so far for the stock market. Since January 1st, the Dow is down 277 points, and the Nasdaq has lost 132 points. You know all about it: Enron, Tyco, layoffs, recession, and war.
But Joe said that there is good news out there. He thinks that the market is near the end of cleansing itself from the last bull market, and this means the bear market is coming to an end.
Tobin agrees with Joe. But what worries Toby is that companies' earnings are going to be restated over the next 2 to 3 quarters and this will hinder the market's ability to keep up with the economy.
Scott thinks that things are going to get worse, especially for the Nasdaq and technology stocks.
Gary B. charted the NYSE stocks that are above their 40 day moving average. He said the good news this chart demonstrates is that the market is now in an area where, at the very least, it can go sideways.
Pat said the best thing he saw last week was fear; because fear creates buying opportunities. He said companies like Qwest (Q), Washington Mutual (WM), and J.P. Morgan Chase (JPM) have been knocked down due to problems other companies are having. He advised investors to buy stocks when fear is at its height.
Joe, Tobin, and Scott all stayed put and pulled out their worry free stocks. They said with these stocks, you won't have any worries about bad accounting or bad management.
Joe picked Philadelphia Suburban (PSC) because the water company is nice and clean. He said that if you buy this stock, you will be able to sleep at night.
Scott selected The William Wrigley Jr. Company (WWY) because it is one of the best-managed companies on the planet.
Tobin chose Sallie Mae (SLM) as his worry free stock. He likes Sallie Mae because you get rewarded for people borrowing money to go to college.
Gary B. and Pat came back to look at two Valentine's Day stocks.
They started thing off with fine jeweler, Tiffany & Co. (TIF). The Chartman looked at the company's chart since March 2000. He noticed that Tiffany's price has gone vertical since September 17th of this year, but it has now reached resistance at $37. He advised investors to take profits and wait for a close above $37. Pat also did not like the stock because it is just way too expensive.
Next up, the duo took a look at flower delivery company, 1-800-FLOWERS.COM (FLWS). The Chartman didn't like this chart either. He took a look at the company's chart from October 2001 to show that the company got knocked down and then moved sideways. The Chartman warned that moves like this usually lead to a fall, and if it closed below $12, he would short it. Maybe with the nearing of Valentine's Day love was in the air, but Pat again agreed with the Chartman. He did not like 1-800-FLOWERS.COM because it is too pricey and was not consistently profitable.
Tobin: Cisco (CSCO) drops 15% this week
Joe: Now's the time to buy wrecked tech & telecom!
Gary B: Enron storm passes; time to buy Calpine (CPN)
Scott: Nasdaq steady fall; 1500 by Memorial Day
Pat: J.P. Morgan (JPM) up 30% to $40 in a year