WSW: Louis Rukeyser's Wall Street Summary & Discussion $treet
- Kirk
- SteveT
- mdorsey
- Sinewave
- CatBird
- SteveT
- Kirk
- SteveT
- smile_1
- SteveT
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» Kirk - Re: 6-14-02
.In response to message posted by SteveT:
Thanks Steve.
I liked the guest and it was interesting that we were in agreement as to where we are buying these days in technology stocks.
ROYCE LOW-PRICED STOCK 3 yr chart
<img src=http://pvcharts.quicken.com/bin/icenter.... width=470 height=250>
ROYCE LOW-PRICED STOCK 5 yr chart
<img src=http://pvcharts.quicken.com/bin/icenter.... width=470 height=250>
add in my favorite which is Fidelity Low Priced Stock Fund
<img src=http://pvcharts.quicken.com/bin/icenter.... width=470 height=250>
Comparisons http://www.quicken.com/investments/perfo...
Expenses: http://www.quicken.com/investments/secev...
At 2.27% annual expense ratio, this fund is not cheap.
http://biz.yahoo.com/p/r/rylpx.html
Fidelities Low Priced Stock Fund has a 3% FE charge but its LOW 1% annual expense ratio will pay that back in under 3 yrs as it is 1.27% per year lower than the Royce fund.
Tough decision if you had to pick one. My advice is to see if you can get Fidelity to waive the FE load as they often will do to get 401K money that they know they will get that 1% a year on for decades.
-- posted by Kirk
Do you remember Alison being a contraarain during the bull market? I would have to go back and check but that don't sound right to me???
» mdorsey - Uncle Lou's replacement is almost here.
Will the new `Wall St. Week' be a hit?Commentary: Colvin, Gibbs attempt to replace Rukeyser
By Jon Friedman, CBS.MarketWatch.com
Last Update: 12:09 AM ET June 21, 2002
NEW YORK (CBS.MW) - You might say that the career of Geoffrey Colvin, the co-host of the new television show "Wall Street Week with Fortune," has been framed by a series of happy accidents.
When Colvin, now 48, graduated from Harvard, he was looking for a job. He got a break when a former professor referred him to representatives of William Paley, the imposing long-time chairman of CBS. Paley hired Colvin to help him write his memoirs.
A native of Vermillion, S.D, Colvin had hit the big time in New York, the media capital of the world. The job lasted for three years and it paved the way for him to join Fortune as a researcher.
"It was a sheer accident," said Colvin, a friendly journalist, during an hour-long interview in his comfortably cluttered Fortune office, 15 floors above midtown Manhattan.
As it turned out, Colvin never left Fortune and he is approaching his 24th anniversary at the magazine. In 1995, he rose to his current position of editorial director. He is a frequent speaker at the magazine's conferences as well as a commentator on the radio and TV. Along the way, he obtained an MBA from New York University's Stern School of Business.
-- posted by mdorsey
» SteveT - 6-21-02
It is a new season and according to Lou an appropriate theme song might be, It is Summertime and the living is sleazy. Friday was the longest day of the year and the market is in a downbeat mood closing at a new low for the year.Brian Rogers says it has been a difficult time but there is reason for optimism. Brian said sentiment is negative but the economic news is positive and earnings comparisons are getting easier. Rogers thinks by late summer or early autumn investors should begin to feel better about the future for stocks. He sees little downside risk but thinks there is a good chance we will be in a side ways market for a long time. A stock Rogers likes is Merck (MRK) saying he has been long and wrong. Adding it should be a real good value a year or two out.
John Kim is a growth at reasonable prices investor but does not think we will see much growth in the near future. John believes the market is suffering from irrational pessimism. The economic and stock market fundamentals could not be better but people are focusing on bad news. Until they see signs of improvement in things like terrorist threats and corporate malfeasance they will continue to be pessimists. Patience will be the key. Kim thinks the bottom is near but says there could be some downside risks. Stocks he likes now are Worthington Industries (WOR), Freddie Mac (FRE) and Fannie Mae (FNM). He is avoiding stocks without earnings or having ultra high valuation, a couple examples are Caterpillar (CAT) and Deere & Company (DE).
Barbara Marcin thinks the market is still dealing with the unwinding of the investment and spending bubble that started in 1998 through early 2000. After this correction she likes many stocks. Marcin likes some of the strongest players in Telecom; AT&T Wireless (AWE), Nextel (NXTL). She also likes AT&T (T) Honeywell (HON), Merck (MRK), AOL Time Warner (AOL), and Disney (DIS). Barbara would sell stocks that have performed well and are now at high levels of valuation and look to invest the proceeds in better values. Areas to take profits could be in the Defense and Housing sectors.
Lou then introduced Thyra Zerhusen manager of the ABN AMRO/Talon Mid Cap Fund. Thyra took over the fund in 1999 and has had an annualized return of 16%. She looks for good top line growth and Companies that are focused. She does a great deal of travel talking to top management. She also pays close attention to the balance sheet, in particular looking at debt as a percentage of market cap. Finally she tries to buy when they are good values. The fund has been avoiding banks and energy but has about a 40% exposure to tech. A long time top holding has been Unisys (UIS). She also holds Andrew Corp (ANDW), Edwards Lifesciences (EW). Zerhusen defines Mid Cap as $1-10 Billion market cap and thinks that area has many advantages. They are under researched vs. large caps and have better liquidity than small caps along with more experienced management than smaller companies. An example is Wallace Computer (WCS).
Brian asked is there were fewer scandals in Mid caps than Large Caps. She was not sure saying they do happen, that is why she looks at balance sheets so closely. John asked her sell discipline. The inverse of the buy strategy. When buying she looks for growth and at valuation. Her most common sells are due to reaching fair value or a takeover. Barbara said one of her favorite stocks is Reader's Digest (RDA) and asked for her outlook. Thyra gave a quick review of the business plan, restructuring news, and fundamentals. It is selling at less than 1X revenue, usually an attractive entry point.
Lou asked what she is selling. One she is trimming her position in is Boston Scientific (BSX). Another tip Zerhusen shared, when doing research spend as much time looking at the downside as the upside. Her market outlook for the foreseeable future is flat. A perfect environment for a stock picker.
Next week special guest will be Peter Lynch Vice Chairman Fidelity Management & Research Company.
-- posted by SteveT
» Kirk - Re: Re: Watch Rukeyser
In response to message posted by CatBird:What I get from Lou's show is there is a World full of different opinoins and often they are wrong. That if you believe in the US Economy and stock market, then you invest for the long term and ignore the day to day noise.
I think his bearish guest, Doug Cliggott, said it best. Here is what Steve wrote:
http://www.suite101.com/discussion.cfm/i...
Lou asked if you are so bearish why 50% stocks. Doug admitted he could be wrong, saying no one can look around corners. A zero weighting makes no sense, as there are some interesting opportunities.
Even his pannelists seem to have different styles where some are trend chasers and others are contrarians. I wish he kept long term records on his site on how the panelest picks do over many years... say a summary of each year's results so we can see how they do over many years. It seems the new show with Forbes is promising to keep track of this on a web site so perhaps we'll have to make a new discussion thread for that show.
-- posted by Kirk
» smile_1 - Re: 6-21-02
In response to message posted by SteveT:Thanks Steve, great recap as usual.
I missed the show, but caught your summary.
Looks like the PBS version has its work cut out for them, will be interesting to see who gets the best guests...
PL, great guest next week
-- posted by smile_1
» SteveT - 6-28-02
The events that have been on investor's minds this week were on Lou's too. WorldCom and Zerox could have been from the George Orwell classic "1984". Lou said nothing like a bull market to bring out the crooks and a bear market to start catching them.Marty Zweig says his indicators are pretty good, interest rates are down and there is much pessimism. The problem is accounting. Marty said he has never seen it this bad but knows it was bad in the 1920s and early 30s. Right now this accounting issue is killing confidence. Valuation is also a problem but earnings should begin to improve. Marty is hoping the P/Es will come down less than earnings go up. This should lead to a moderate rise in the market. Zweig says we may have seen a double bottom, last September and this week. Confidence is never high at bottoms and when we see higher profits that could start a new bull market.
Liz Ann Sonders quoted Burton Malkiel "Investing is an act of faith". Right now fundamentals look good but the market is not paying attention. We need time and more good news than bad to turn fear into greed says Liz Ann. It is to late to sell and it is difficult to time the bottom so she is buying more than selling. From a sentiment standpoint she is a contrarian and would buy Freddie Mac (FRE), Target (TGT), and Lockheed Martin (LMT).
Ed Brown could not make it to the studio due to transportation problems. He did send Lou a list of stocks he would buy, Pfizer (PFE) and Kohl's (KSS). Brown would sell volatile semiconductors such as Altera (ALTR), Xilinx (XLNX), and Atmel (ATML). Ed thinks market demand will be weak and recovery time long.
Lou introduced Hall of Fame investor Peter Lynch Vice Chairman Fidelity Management & Research Company. Peter said buying a good stock never has been and never will be a bad move. A couple of his basic rules of investing are, know what you own and why you own it. He goes on to say you should be able to explain it to an eleven year old in two minutes or less. The trust issue is a problem and it will take time to work out. These kind of things have happened before and they will happen again. The answer is to punish those responsible. Right now investors have three choices. 1. Money market yielding a taxable 1.7%. 2. 10 year treasuries yielding a taxable 4.7%. 3. Equities, over the next 10 years Lynch is confident stocks will do better than 4.7%. After that it is a question of allocation. Peter says that is a personal decision. He does not like set rules for allocation based on age but thinks we all need to decide how much risk we take. He went on to say stocks are not lottery tickets most companies will earn more in ten years than they do today and that is why stocks go up. Since World War II corporate profits have gone up 40 fold and the stock market has gone up 40 fold. Lynch said the biggest mistake is not to look at the balance sheet. It is impossible to go bankrupt if you have no debt. Peter said some of his biggest mistakes managing money was to sell good companies to soon. Lou asked when do you sell. Lynch said first you have to look at why you bought it. If it is a cyclical company and it is down hang in there and wait for it to come back. If a growth company you have to figure out how long the ?story? is and follow it. Lou asked if the recent problems with National security and accounting change the way we should pick stocks. Not at all, buy good companies that grow and understand what they do. If they do well the stock will do well no matter what the market does. Lou said no one has a batting average of 1.000 and asked how often he hits clinker. Lynch said if you bat .500 and your winners are 2 X or 3X they will more than off set the 20 or 30% loses you are going to have. Lynch said the economy looks good but he never tries to forecast the economy but looks back at the economy and never bets against the power of the American economy.
Marty asked if he saw a parallel between the current U.S. situation and that of Japan. Not at all Japan has wasted 12 years in recession by not cutting taxes but raising them instead and companies in Japan have not cut costs. Their banking system is weak while ours is strong. Liz Ann said when Lynch started the typical holding period for Mutual Funds was about 17 years now it is 2 is this a mistake. Peter advised this approach. Ask yourself what do I want and when. From that determine if you are aggressive or not. Then pick a mix of different classes of value, growth, and foreign that suits your needs and stick with it. Over time they tend to even out performance wise. When adding money maybe add to the ones that are down. Avoid getting whipsawed chasing performance.
Lou asked if this market reminds Peter of any we have seen in the past. Lynch mentioned 1990, 1981-2, and 1973-4. They all have something in common with today, they were scary. We recovered from them and we will this time too. Lynch then caught me a little off guard when Lou asked his views on Government surpluses and deficit spending. Lynch said deficits are terrific and act as a cushion. Deficits put money into the economy and surpluses take more money out of the economy than the Government needs. Since WWII we have had nine recessions and we got out of every one of them, the system works. Lynch closed with this advice. Look at children, they don't know who Alan Greenspan is, they don't know the shape of the yield curve. They are optimistic that we will be fine the next 30 or 40 years.
Next week Ed Hyman, economist ISI group.
-- posted by SteveT
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