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; Bob Olstein, president of the Olstein Funds; Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, founder and chairman of ChangeWave Research; and Scott Bleier, president of HybridInvestors.com.
Trading Pit
Last week was a rough one for stocks. But October is still defying the odds with solid gains. So far this month, the Dow is up 307 points. However, there’s still some time left, and in October, these plus signs can be wiped away in a single day.
Bob said there is no trend to this market, and investors must pick the right stocks. Those who do get candy, those who don’t will get tricked.
Bradshaw thinks the market is heading higher so October will be a treat for investors. He said the only thing the bears had going for them were the unemployment (search) numbers, but now there’s more jobs being created. Also, the vast majority of S&P companies are meeting or exceeding expectations. He concluded by saying, stocks are the best place for your money right now.
On the October 18th show, Tobin’s prediction was that Microsoft (MSFT) would have a big earnings surprise and head up 20 percent. It did surprise, but came down in price. He said this means the market is tired. He added that the trend is up, earnings and fundamentals are both up, but the market has moved too far too fast, and needs to pullback. He stressed that investors must now make very good stock picks to make money, because those that buy index funds won’t see any profits.
Gary B. charted the Nasdaq’s performance for 2003 and showed that even with a number of scary setbacks, it established an uptrend in March. He said as long as this uptrend holds, any dip is a buying opportunity. However, he warned that if the index drops below this uptrend, watch out!
Scott thinks last week’s pullback was a good thing because it created new buying opportunities for stocks. He said for the first time in 6-8 months, stocks that reported disappointing earnings really got hammered. He believes the economy will keep getting better for next six months, so when the market dips, buy stocks.
Pat agreed with Toby that the market has simply moved too far too fast. He said that on Friday, JDS Uniphase (JDSU), Nortel (NT), and Scientific-Atlanta (SFA) got hammered, even though each reported earnings that weren’t that bad. Scientific-Atlanta went down 20 percent. He believes there is going to be more downside for the market, and advised investors to wait until then before buying stocks.
Stock X-Change
The return of the Lightning Round! This time the guys looked at stocks that have been in the news recently:
• Wal-Mart (WMT)
Friday’s Close: $58.11
Last Thursday, authorities arrested about 300 illegal immigrants working at Wal-Mart. The feds say Wal-Mart execs were in on it.
Scott: Bear. “This is the company that ate the world and continues to eat the world and get indigestion.” He doesn’t like it and said buy smaller retailers.
Gary B: Bull. “Scott’s giving me indigestion.” He said investors should buy this stock when it breaks over $60.
Bradshaw: Bear. “It had 300 workers that were illegal from contract laborers. I don’t think there’s any culpability for Wal-Mart execs. It’s the best play in the retail sector.” He thinks the price is too high now and to wait for a pullback to buy it.
Tobin: Bear. “The Bradshaw action figure in my local Wal-Mart is going for $5 and the Rock is going for $20. There’s something going on there.” He said wait and let it come back to $50.
Pat: Bear. “It is going to kill the entire grocery industry, but the shares are too expensive.” He said it’s a buy at $50.
Bob: Bear. “It’s going to march against the wall. It’s going lower.”
• Nike (NKE)
Friday’s Close: $62.03
Nike has Kobe Bryant as a major endorser and the company pays him $45 million.
Gary B: Bull. “It’s been moving sideways for six years. The momentum is back.” He said to buy this stock when it closes above $75.
Bob: Bear. “Too pricey. (The stock) goes the way of Air Jordan and Gary B.”
Bradshaw: Bull. “Kobe Bryant is guilty of a malignant case of stupidity and adultery.” He does not think the situation is going to affect the stock’s price. He added, “They have the ever-evasive street ‘cred’. Nike is a buy.”
Pat: Bear. “Most of their growth has coming from currency gains. That’s not sustainable.” He wouldn’t buy Nike until it hit around $40.
Tobin: Bull. “It’s going to $75. My ‘brother’, Gary B. Smith is right. LeBron James, ladies and gentlemen is the next big star.”
Scott: Bear. “The stock is fully priced. It’s had a nice move, but I like my bad boys bad. I’d rather buy Reebok (RBK).”
• Martha Stewart Omnimedia (MSO)
Friday’s Close: $9.53
A trial awaits Martha Stewart, in addition to a Barbara Walters interview.
Bob: Bear. “The stock is still too pricey. Get your pin stripes and leave Martha Stewart.”
Pat: Bear. “The company’s reputation is too closely tied to Martha. It hasn’t been able to diversify away from her and she’s still damaged goods.”
Tobin: Bear. “Her career is deader than Gray Davis’ political career. You want to buy it in January when it comes down after she gets convicted and spends time dressing up prison.”
Bradshaw: Bear. “If Martha Stewart goes to prison, you ought to send guys from Enron (ENRNQ) and WorldCom (WCOEQ) to the electric chair! I don’t think she should go (to prison), but I don’t think it matters. She’s lost her credibility, and in an industry like that, that’s all you have.”
Gary B: Bear. “The stock’s been going down for years and it continues to go down. Just stay away from this.”
Scott: Bull. “She’s going to get off scot-free. Gary and I have disagreed about this stock. It’s still almost $10. People are going to buy her goods.”
• Merck (MRK)
Friday’s Close: $44.79
The stock got hammered last week after announcing a lower outlook on earnings and over 4,000 layoffs.
Bradshaw: Bull. “The death of Merck has been greatly exaggerated. They still have a pristine balance sheet. They have a new cholesterol drug…the stock is a buy right now on a pure valuation play.”
Pat: Bear. “Yes it is cheap, but…we don’t know how much money they’re actually making. Its financial disclosure is awful.”
Scott: Bull. “This stock is actually starting to become a value stock and once prescription drug legislation passes, this stock…will pop.”
Bob: Bull. “I need Bradshaw to help me up in Westchester. There’s a big guy picking on me.”
Gary B: Bull. “Don’t ever disagree with a guy who throws chairs at people.” He thinks this stock has sold off and it’s going to head higher.
Tobin: Bear. “This company is more confused than Bradshaw at the all-you-can-eat buffet. It’s going down.”
Predictions
Bob's prediction: McDonald's (MCD) being managed perfectly; up 30 percent within a year
Scott's prediction: Don't forgive the French, but you can buy Vivendi (V); going up 25 percent
Bradshaw's prediction: Get the hell out of Intel (INTC)! Drops 20 percent in next few months
Gary B's prediction: Best Buy (BBY) is a GREAT buy! Up 40 percent by end of next year
Pat's prediction: The "Accent" is on making money! Accenture (ACN); up 50 percent in 2 years
Tobin's prediction: I was early on Chesapeake (CHK); buy now, it's going up 20 percent by February
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