DISCLAIMER: THE FOLLOWING "Cashin' In 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 "Cashin' In Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Is the best yet to come?
The Dow
October 9, 2002: 7,286
Friday’s close: 9,582
The Dow’s up more than 2000 points in a little over a year. So why do so many in our group say we ain’t seen nothing yet?
Dave Nelson of DC Nelson Asset Management says that despite last week’s volatility the best is yet to come. He says you need to forget the day-to-day noise and concentrate on the longer-term trend, which he says is up. He says assets are coming into the U.S. and that is bullish for the market.
Dagen McDowell of Fox Business News points out that the November, December, January stretch has historically been the best three-month span for stocks, and she says $20 billion has come into stock funds in the last couple of weeks, which means stock fund managers will be buying stocks.
Wayne Rogers of Wayne Rogers & Company says earnings make the market move, and earnings have been relatively strong.
Jonathan Hoenig of Capitalistpig Asset Management says you can’t bet on just anything, but he agrees the momentum is with stocks right now, though he sees more opportunity in international stocks than in U.S. companies.
Hilary Kramer of A&G Capital says we are going into an election year, which is generally a catalyst for a higher market.
Best Bets!
Which stocks will make you the most money between now and the end of the year? We got our group’s best bets!
Hilary: Nextel (NXTL)
Friday's close: $22.09
Hilary says Nextel is going to clean up when cell phone customers are allowed to switch services and keep their old numbers because Nextel offers the best value. Dave says this was a great investment last year, but he’s not sure about now. Jonathan wouldn’t bet against it, but he wouldn’t bet on it now either. Wayne says the there is momentum in the stock and he doesn’t see it slowing yet.
Dave: Alcoa (AA)
Friday's close: $29.16
Dave says commodity prices are rising and China’s demand for aluminum is going to keep the prices high for aluminum which will help to boost Alocoa’s profits and stock price to the end of the year. Hilary doesn’t agree. Wayne thinks it’s a good company, but he says it will take a lot longer than to the end of the year for this stock to show a significant return. Jonathan says this is one way to play higher commodity prices, which is one trend he’s been watching.
Jonathan: Citigroup Investments Corporate Loan Fund (TLI)
Friday's close: $14.66
Jonathan says this is a play on rising interest rates. Hilary says this is not a time for the fixed income market; she does not like the pick. Wayne likes the pick. He thinks interest rates are going higher and this fund will benefit.
Wayne: PetroKazakhstan (PKZ)
Friday's close: $20.44
Wayne says PetroKazakhstan is a terrific company that doubled its earnings in the last quarter and is sitting on a ton of assets. Hilary says she bought the stock now that it’s on the London exchange because that gives it a lot of credibility and so she thinks it will do well. Dave says this is a great bet on a global recovery. Jonathan does not own the stock, but he thinks Wayne is shopping in the right market with this stock since it will also benefit from higher commodity prices.
Fund Face Off
Your mutual fund could be ripping you off. That’s what a new investigation into the trading practices at some of the nation’s largest mutual fund companies suggests. So should you dump your funds?
Hilary says, “Yes, dump all mutual funds and buy diversified company stocks instead.” She recommends: SPX Corp (SPW)
Dagen says, “No, not all funds are bad! If you are worried about fraud, buy an index fund that you can measure against the index every day and spot problems if they differ too dramatically.”
She recommends: Vanguard Total Stock Market Index Fund (VTSMX)
Money Mail
We took a look at the standing in the $10,000 “Cashin’ In Challenge”. To find out who’s ahead, check out the website at: www.foxnews.com/challenge
Wayne, Jonathan and Jonas answered some of your questions.
Question: “What do you think of Pixar (PIXR) as a long-term play?”
Wayne thinks the stock is overvalued right now. He doesn’t recommend you buy it here. Jonas says the only time you want to buy a stock like this to hold for the long term is right after they produce a “bomb,” not a successful movie like Finding Nemo because success can temporarily inflate the price of the stock. Jonathan says it’s not his top choice for new money, but he wouldn’t bet against it because he likes the company’s management. He says if you own it put a stop under it and let the market take you out if it falls.
Question: “Is now a good time to buy smaller stocks?”
Jonas says it is no longer a good time to invest in small stocks. They are supposed to fly the highest during an economic recovery, and people have jumped into them in the last year as signs of an economic recovery emerged. He says small caps are no longer cheap compared to larger stocks. Jonathan likes international small cap stocks. Wayne thinks small cap stocks will still give you the best bang for your buck if you pick the right small stocks.
Question: “Could you give me the name of a good dividend-paying stock to hold long term?”
Jonathan likes foreign bond funds for income. He recommends Aberdeen Asia-Pacific Prime Income Fund (FAX) and American Century International Bond Fund (BEGBX). Jonas prefers utilities for dividends. He likes Southern Company (SO). Wayne says master limited partnerships pay the best dividends. He recommends Pengrowth Energy Trust (PGH).
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