Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist, Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, portfolio manager of ChangeWave Capital Partners; Scott Bleier, chief investment strategist at Prime Charter; and Gretchen Morgenson, The New York Times business editor.
Trading Pit
The Nasdaq is up a whopping 42% since its post-attack low set back on September 21. Even more impressive is that this gain has occurred with a war going on over seas and worries of terrorism here in the U.S. So, is this rally for real?
Gretchen said that investors are buying ahead of what they hope will be a quick and robust recovery.
Tobin thinks that a recovery is coming, and coming soon.
Gary B. is bullish on the Nasdaq's chart. He said that there is no reason why the Nasdaq cannot continue to 2,300, but the current rally is a greed rally.
Pat agreed with Gary B. that this is a greed rally. He said that a lot of the marquee tech companies are still not getting big orders, so there may be bargains in smaller tech companies, but forget about the big tech names.
Scott said that the war is giving confidence to institutional investors. The market as a whole is much better and that is coming from confidence.
Chartman
Gary B. and Pat stayed put, and each picked a holiday stock bargain.
The Chartman studied his charts and selected McDonald's (MCD) as his bargain. He said the stock has been clobbered for nearly 2 straight years, but it is still in an uptrend! Pat disagreed; pointing out that the company is taking on too much debt and will have a tough time growing because it is so huge and has stiff competition.
Pat picked Washington Mutual (WM) because it is the "Wal-Mart" of the mortgage business, it is well diversified, and insiders have been buying it. The Chartman does not agree with Pat's pick because it is still in a downtrend and still is below resistance. But, it does look like the bottom it hit just over a month ago was a true bottom.
Scoreboard
No free rides on this show! It was time to track the Bulls & Bears predictions.
On April 7th Gary B. said Disney (DIS) buckles; and will trade at $12 by the end of the year. Since his prediction, Disney is down 27%, was down to about $15 a couple of months ago, and closed Friday at $22.35.
On October 27th Tobin said that the Nasdaq would hits 2002 before the year 2002. And, on last Wednesday, the Nasdaq closed at 2,047.
On October 20th Gretchen said that stocks would weaken amid terrorism in U.S. The U.S. has been on constant high alert, but since Gretchen's prediction, the Dow is up 9% and the Nasdaq is up 21%.
On September 8th Scott said that the Gap is now low enough to buy. But since then, the Gap is down 7.5%.
On November 24th Pat said to avoid Haliburton (HAL) because of its asbestos liability. And on last Friday, the company lost an asbestos verdict causing its stock to drop 42%.
Predictions
Pat: Brocade (BRCD) way overvalued; falls from here
Tobin: Bonds are over, buy smaller cyclical stocks!
Scott: Compaq (CPQ) sinks on news of squelched deal
Gary: Dow 11K in January but then stalls until May
Gretchen: AOL Time Warner (AOL) lower in six months
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