Recap of June 28: Election Bull

The road to the White House is paved with green for investors; that means you, and it means right now! The stock market has ended every pre-election year solidly higher since World War II – with an average gain of 16.9 percent

Now that the candidates have hit the campaign trail, are we in for a bull market during the second half of 2003?

Wayne Rogers of Wayne Rogers & Co says he’s not one to fly in the face of history. He thinks the market will rally a bit more to the end of the year, and he believes no matter which party wins the presidential election in 2004, he thinks we are headed for a stronger year next year as well.

Jonathan Hoenig of Capitalistpig Asset Management says the market is strong. But he says the Democrats scare him, and he thinks the market is pricing in a Republican win next year.

Hilary Kramer of A&G Capital says we will see more upside both this year and next. She says we’re going to see an earnings rally next year. She says reforms like tax cuts and interest rate cuts are going to show up in the market next year. And she thinks people will be excited at the prospect of another Republican win.

Gary Kaltbaum of Kaltbaum & Associates says the market is acting great. He points out that recent pullbacks have lasted just three or four days, and until that changes, he says you have to give the market the benefit of the doubt. Gary says history is repeating itself again, and stocks are headed higher in this pre-election year.

Dagen McDowell of FOX Business News says the Democrats are going to be looking for some mud to sling during this presidential election and she thinks if they fixate on the post war trouble in Iraq it could hurt stocks.

Be$t Bets: Election Bull Stocks

So which stocks are set to take of as Election 2004 heats up? Our panel elects the candidates.

Hilary's Campaign Bet: Northrop Grumman (NOC)

52-week high: $130.35

52-week low: $78.27

Friday's close (6-27-03): $85.82

Gary says he would be more bullish on NOC if it breaks above $89. Then he thinks it could go to the mid 90’s. Wayne likes the company, but he thinks there are better stocks to buy right now.

Gary's Campaign Bet: Coach (COH)

52-week high: $53.53

52-week low: $17.19

Friday's close (6-27-03): $49.94

Hilary says Coach is banking on Japan, and it has too much competition there. She’s bearish on the stock. Jonathan says he likes Coach. He says it’s a strong brand with a strong stock chart. Wayne says he likes the company, but he doesn’t see room for a lot more upside in this stock.

Jon's Campaign Bet: Citigroup Investments Corp. Loan Fund (TLI)

52-week high: $13.53

52-week low: $11.10

Friday's close (6-27-03): $13.47

Wayne says there’s safety in this pick, but if you are looking for real capital gains he doesn’t see a great deal of room here for upside.

Wayne's Campaign Bet: UTStarcom (UTSI)

52-week high: $35.39

52-week low: $12.21

Friday's close (6-27-03): $35.39

Hilary says this is great stock. Gary says it’s a great play, and he’d stick with it as long as momentum holds up.

Mutual Fund Face-Off: Funds for Frasier!

He’s an actor, writer and director. And when he’s not playing Frasier on TV, Kelsey Grammer is playing the stock market. Right now, he wants to know about the “next big thing” on the horizon. Dagen and Jonas have some hunches on what he should bet on to cash in.

Dagen – Fidelity Select Retailing Fund (FSRPX)

Year-to-date performance (as of 6-27-03): UP 15.0 percent

Minimum investment: $2,500

Expenses: $11.60 for every $1,000 invested

Jonas – Potomac/OTC Short Fund (POTSX)

Year-to-date performance (as of 6-27-03): DOWN 23.3 percent

Minimum investment: $10,000

Expenses: $19.50 for every $1,000 invested

Money Mail

Jonas, Jonathan and Wayne answered some of your questions.

Question: “I have been following the Cashin' In Challenge from the first week but didn't buy any of the stocks. Is it too late to buy Wayne's now?”

Wayne says if some of these stocks fall down, he would be tempted to buy them again, but he’s not sure they have enough upside from here to buy them now.

To find out who’s ahead, check out:

Question: “I bought Scholastic (SCHL) in early June and made some money. But the stock fell Monday and I lost all my profit. Should I sell?”

Jonas says hunches like these are very hard to play because the profit is all in the timing. Additionally, in the case of the Harry Potter book, yes it has been successful, but the publishing company has had some problems that you would have needed to dig for to see. Also, he says, when it comes to entertainment, it’s the stars – actors, musicians, or authors – who make the profit, not the shareholders, because there is no control of costs. He says sell. Jonathan says this is classic case of “Buy the rumor; Sell the news.” By the time the news is out, it’s already priced into the stock.

Question: “I bought Cisco (CSCO) at $30 but do not expect to see it there again. It's been going up lately. At what point should I sell?”

Jonathan says you shouldn’t wait for this stock to go up to sell, you should stay in and use stop orders to protect you from losing more money on the downside. Then let the market take you out if it falls. He points out that even big tech is strong this year, and he says he wouldn’t be in such a hurry to get out of Cisco right now. Wayne agrees that protecting your gains with stop loss orders instead of selling out of a stock that is showing strength is the way to go.