WSW: Louis Rukeyser's Wall Street Summary & Discussion $treet

» Happy - Re: Re: Re: 1-24-03

-- posted by Happy

» Roger_Babson - Re: Re: 1-24-03

Kirk writes: "We could go much lower than 640 or never hit it and the 750 or so level might have been the bottom... we don't know."

Kirk, my still-bullish pal, the 600s for the SPX is a reasonable target for the March-April low, followed by a rally back to or slightly above the July-October '02 lows in the summer, and then we go down again into the 400s by the end of the year or early '04.

But that you're still holding out hope for a bottom here strongly suggests that we're not near the bottom. When you cry, "Uncle Roger!!!", then we can begin to look at the long side. But you're determined not to give up the bubble-headed mentality, so the bear has a lot more mauling left to do. You've got to accept that, until you're broke, the bear market continues.

SOS!!!

-- posted by Roger_Babson

» SteveT - 1-31-03

Nick Sargen sees the market flat with a great deal of volatility due to war concerns. On the profits and economic front the picture has been mixed. Ideally any war would be short followed by lower gold and oil prices. Nick would not alter his strategy because of future war concerns. He thinks gold has had a good run and would not buy it now. Sargen sees a post war advance in the U.S. Dollar followed by a couple year down trend. Stocks he likes now are Pfizer (PFE) Barclays and France Telecom (FTE).

Kim Goodwin believes we are in recovery but is concerned about business spending. So far this quarter 62% of earnings have been ahead of expectations. The problem is future guidance has been weak and that is what the market has been reacting to. Kim is buying but is ready to book profits when stocks reach her sell targets. Goodwin likes Darden Restaurants (DRI) and Fox Entertainment (FOX) saying they both could rise 25% over the next year. Novartis AG (NVS) she is watch and hoping to buy it cheaper if they attempt to buy Roche.

Frank Gannon is looking for the market to do better when we reach the transition period from recovery to expansion. When this happens corporate earnings will follow through. He is buying in areas that will do well in an economic turn around like financials. A couple stocks he has been buying are American Express (AXP) and Amgen (AMGN). Gannon would sell energy stocks due to the run up in oil prices and added risks.

Lou then introduced special guest Mario Gabelli, Chairman Gabelli Funds. Mario is known as a value stock picker and now believes the over all market to be about in the middle of its intrinsic value range. Now He is getting back to basics and buying Utilities that are regulated and pay dividends. He also likes the media area and is looking for companies that are take over targets. He predicted within 90 days new FCC regulations to facilitate media consolidation. He would sell companies that have to compete against China particularly small manufactures. Gabelli doesn’t think the market will surge when the Iraq situation is resolved.

Nick wanted to know what companies would benefit from a higher Euro a year from now. He mentioned a few specific companies like Proctor & Gamble and American Express but said the Movie Industry, as a whole would benefit. Kim wanted to know if in the media area he would buy the targets or the acquirers. The targets in most cases. He mentioned possible targets as Pulitzer, Liberty Corp and Young broadcasting. Frank asked his opinion on Large Cap stocks since Mario specializes in small Caps. He doesn’t mind them but pays close attention to fundamentals.

Lou finished by asking about the President’s dividends tax cut proposal and if it would pass and how it might affect his stock selection. Mario is in favor of it because it is fair and makes sense. He said the Republican control the White House, Senate, and House. If they can walk a straight line it should pass.

Next week special guest Carl Seiden, Drug stock analyst JP Morgan.

-- posted by SteveT

» Kirk - List of Gabelli Funds

Mario seems to have a fund for every occasion. I'd love to see Mario Gabelli defend his high expense ratios and large number of funds in a debate with John Bogle.

Profile - ASAF Gabelli Small-Cap Val X (GXSVX)
Category Small Value
Fees & Expenses
Total Expense Ratio 2.40%
Max 12b1 Fee 0.75%
Max Front End Sales Charge 0%
Max Deferred Sales Charge 6%
Lead Manager: Mario J. Gabelli
Manager Since: 11-Sep-00

<img src=http://pvcharts.quicken.com/images/chart... width=470 height=250>

I like Mario Gabelli as a TV personality and his small cap value fund has beaten the Vanguard index fund for small cap.... but I think his best skills are selling Mario J. Gabelli which gets his name on 50+ mutual funds. I'd much rather pick a fund manager who only manages a few funds... unless you can find a Gabelli fund from that long list that has low annual expenses and performs as well as the leaders.

That one fund with over 3% annual expenses AND a front-end load... is designed to sell to suckers. I can't imagine anyone in their right mind that understands how mutual funds work would decide to buy that fund without a commissioned salesman to aid in the decision.

-- posted by Kirk

» SteveT - 2-7-03

Lou Holland thinks we very well may test the October 2002 lows but after Iraq is resolved we could do well for a couple years. He pointed out in the early 1990s a similar scenario played out in that manor. Holland thinks after a three-year bear market valuations are improved enough for some nice returns short term. After that we may see an extended period of 6-8% market returns. Lou is concerned about inflation triggered by an ever-increasing money supply. Holland does favor small and middle-sized companies. Some of his current top picks would be Zebra Technologies (ZBRA), International Speedway (ISCA), CDW Computer (CDWC), Best Buy (BBY), and Treasure Inflation Protected Securities. These equities are growing faster than the broad market and trading at favorable PEG ratios. The TIPS will do well if his prediction of inflation comes to pass. He would sell over valued tech stocks that have not grown earnings, many of them on the NASDAQ.

Alison Deans is worried about the next 6-9 months. Later this year things could begin to improve. She sees much positive news on the economy but worries business and consumers spending will become stagnant. The war Alison fears will have private investors to scarred to buy stocks and it is hard to imagine the market going up if few are buying. Still Deans would buy some beaten down stocks like J P Morgan (JPM) Sovereign Bancorp (SOV), Home Depot (HD), and General Mills (GIS). Alison would avoid Utilities and Grocery stores.

Gretchen Lash is glad to hear differing opinions, as she is quite bullish. The wide economic picture is improving and once the war is over the market should take off. People need to remember war is not an economic event. Lash would buy companies exposed to the economy in the advertising industry like FOX Entertainment (FOX). She also likes Oracle (ORCL), and Sallie Mae (SLM). Gretchen would sell the former “safe haven” stocks thinking they are over valued. A couple examples would be Coca Cola (KO) and Gillette (G).

Before introducing special guest Carl Seiden, Drug stock analyst JP Morgan. Lou reviewed Seiden’s top current drug picks. They are.

Drug        Condition                  Company
Zetia       Cholesterol             Schering Plough/Merck
Inspra      Hypertension            Pharmacia/Pfizer
Flumist     Flu                     Medimmunel/Wyeth
Cialis      Erectile Dysfunction    ICOS/Eli Lilly
Abilify     Schizophrenia           Otsuka/Bristol Myers Squibb
Cymbalta    Depression              Eli Lilly

Lou Holland brought up the growing number of people going to Canada for Prescriptions and wondered what will happen. Carl said it is illegal but the FDA ignores it. The reason drugs are cheaper in other counties is price controls. If a Medicare drug plan passes it should ease the problem. Alison asked about the potential for a merger involving Bristol Myers. It is there but many things have to line up for a merger. Cost savings and for defensive reasons are the two most common. Gretchen followed up by asking about the many mergers over the past 15 years and several have not gone smooth. She wondered if Pfizer and Pharmacia would work out any better. Yes it probably will. Most mergers have been two struggling companies clinging together to try to survive. This merger is more of an offensive merger. Pfizer is buying some nice products and getting some growth plus a little cost saving.

Lou asked about the deal between Johnson & Johnson (JNJ) and Scios (SCIO). Seiden said he didn’t know either company well enough to comment. Generally Large Global companies do look at acquiring Bio Tech companies as another form of research and development along with added growth.

Next week a special on “Investing for Income”. Lou will have a panel of experts on Tax-Free and Taxable bonds as well as Real Estate.

-- posted by SteveT

» SteveT - 2-14-03

Fuss for now likes corporate bonds and some International bonds saying both will yield higher than treasuries and Corporates are seeing improved credit ratings. Dan thinks over the next year corporate bonds will out perform stocks but after that inflation will increase and be unfriendly for bonds. Stocks still have high valuations so they have little room to move up. Fuss predicts as earnings improve stocks should begin to out perform bonds. Fuss said despite what the FED economic forecast tells them short-term rates will stand pat due to political reasons. Dan does like Corporates over treasuries because he sees higher budget deficits and increased supply of treasuries. The Currency exchange is a wildcard in his view.

Alexandra Lebenthal specializes in Municipal bonds and acknowledges by years end tax-free bonds may not be the only investment with tax-free income. If the dividends tax proposal passes munis may have to offer a more competitive yield by some 10 to 25 basis points. States and Cities historically have had budget deficits, in fact last year was a record year for issuances of muni bonds and this year should be on par. She thinks as States increase income taxes to address their budget short falls munis become more attractive. Lebenthal does favor a couple types of bonds now. Those worried about defaults can buy insured bonds and give up very little yield in return for safety. She also likes tobacco bonds, they are more risky as they are linked to the number of future smokers. Tobacco bonds are issued as a result of the settlement with various States a few years ago. Some are yielding 7% tax-free.

Jon Litt says to remember A REIT is a stock not a bond. Likes them for several reasons; you get income and the chance for capital appreciation. Current REIT average yield is about 7% plus the coupon is improving by about 5% annually. REITs should do better than bonds in an inflationary environment. They are a very good diversification tool with little correlation between stocks or bonds. Litt thinks there is little chance REIT corporate structure will change if the dividend tax repeal passes, saying some 50%-80% of REITs are in tax deferred accounts. Jon did recommend after a disclaimer General Growth Properties (GGP) and Boston Properties (BXP). Lou asked if the good REIT returns of late might be a result of the post bubble period. Litt thought perhaps in residential but not commercial. Low rates may have encouraged people to over pay for homes but not so in commercial. As rates go up REIT earnings should improve to offset.

Next week Lou is taking the week off . Bill Griffeth will guest host. Special guest will be Martin Sosnoff of Atalanta/Sosnoff Capital.

-- posted by SteveT

» Wendell - Re: 2-14-03

-- posted by Wendell

» SteveT - Re: Re: 2-14-03

Wendell, I am going out on a limb and going to say, yes. They last time Lou took time off he had a CNBC stand in.

-- posted by SteveT

» Kirk - Martin Sosonoff: 2/21/03 WSW Special Guest

G & Thread,
Saw Martin Sosonoff on Rukheyser last night. He is bullish on big cap tech. He mentioned cisco, msft, Taiwan Semi. He said ceos will be just as shocked when the big orders start rolling in(sometime in this year) as they were when orders fell off the table. A boom of sorts without the old multiples though. He talked about tech selling at 2X the average PE. His one specific recommendation was Echostar. Anyone here follow this one. Mike

Saturday, Feb 22, 2003 11:34 AM ET
To: michael97123 who wrote (8726)
From: Kirk

I believe he also said HPQ and IBM are what he calls "value technology companies" or something like that. The idea being is they are already at low price/sales multiples, pay a dividend and have loads of upside potential.

Disclaimer: I own both so my ears might hear what I want to hear.

-- posted by Kirk

» pat_sullivan - Re: Martin Sosonoff: 2/21/03 WSW Special Guest

Martin Sosonoff was certainly one of Lou's more interesting guests, with a lot of good insights. I don't own either IBM or HP but I thought his comments on the value those stocks was probably correct especially if you agree with his assessment on tech leading us out of our current situation.

Never thought of Echostar, but will take a look at it now. I hope SteveT gives a summary and comments.

Pat S

-- posted by pat_sullivan