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

Top 733. Dec 29, 2003 12:59 PM

» Kirk - December 12, 2003 Stock Picks

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December 12, 2003 Stock Picks

Guest Host:
Tyler Mathisen
Special Guest:
Jim Norris, Partner & Co-Manager, Cooke & Bieler
1. Haemonetics Corporation (HAE)
2. Big Lots (BLI)
3. Steelcase Corporation (SCS)

Panelists:
Mary Farrell, Chief Investment Strategist, UBS Wealth Management
1. Schlumberger (SLB)
2. Estee Lauder (EL)
3. Pfizer (PFE)

Frank Gannon, Portfolio Manager, SunAmerica
1. Burlington Resources (BR)
2. Goldman Sachs (GS)
3. Carnival Corporation (CCL)

Brian Rogers, Portfolio Manager, T. Rowe Price Group
1. Viacom (VIA)
2. Marsh & McLennan (MMC)
3. E. I. DuPont De Nemours (DD)

-- posted by Kirk

Top 734. Dec 29, 2003 1:00 PM

» Kirk - 12/19/03 Stock Picks

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December 19, 2003

Guest Host:
Bill Griffeth

Special Guest:
Michelle Clayman, Founder and Chief Investment Officer, New Amsterdam Partners
1. Analog Devices (ADI)
2. Barr Laboratories (BRL)
3. Corinthian Colleges (COCO)
4. Estee Lauder (EL)
5. Pulte Homes (PHM)

Panelists:
Ed Brown, President, Brown Capital Management
1. Panera Bread (PNRA)
2. Boston Scientific (BSX)
3. Kohl's Corporation (KSS)

Nick Sargen, Chief Investment Officer, Fort Washington Investment Advisors
1. General Electric (GE)
2. Masco (MAS)
3. Valero Energy (VLO)
4. McKesson (MCK)

Marty Zweig, Fund Manager, Zweig-DiMenna
1. Countrywide Credit (CFC)
2. Pulte Homes (PHM)
3. Centex (CTX)
4. Ryanair Holdings (RYAAY)
5. Amgen (AMGN)

-- posted by Kirk

Top 735. Dec 29, 2003 1:01 PM

» Kirk - December 5, 2003 Stock Picks

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December 5, 2003

Guest Host:
Maria Bartiromo

Special Guest:
Larry Auriana, Portfolio Manager, Federated Kaufmann Fund
1. Advanced Auto Parts (AAP)
2. Central European Media (CETV)
3. Dyax (DYAX)
4. Orthofix (OFIX)

Panelists:
Beth Dater, Private Investor
1. Accredo Health (ACDO)
2. Crown Holdings (CCK)
3. Westwood One (WON)

Kim Goodwin, Chief Investment Officer, State Street Research
1. Coach (COH)
2. Agilent Technologies (A)
3. Tom Brown (TBI)

-- posted by Kirk

Top 736. Dec 30, 2003 2:22 PM

» SteveT - Panelist Picks for 2004

Panelist Picks for 2004 (See disclosure information at end of stock picks)

p.s. The panelists that appeared in the year end show didn't give high, low, and close on the DOW & NASDAQ so I have included their picks here too. I hate to be redundant but it does add to the total package.

Rich Bernstein

DJIA NASDAQ High: 10600 2100 Low: 8650 1460 Close: 8650 1460

RTN Raytheon XON ExxonMobil CAG ConAgra ABT Abbott Labs 30 Year T-bond IGW
Ishares/Goldman Sachs Semiconductor ETF (Short Ishares)

Ed Brown

DJIA NASDAQ High: 11650 2290 Low: 10000 1855 Close: 11340 2210

KSS Kohl's Corporation BSX Boston Scientific PNRA Panera Bread Company EBAY
Ebay TXN Texas Instruments SDS Sungard Data Systems DKS Dick's Sporting Goods
SPLS Staples

Laslo Birinyi

DJIA NASDAQ High: 12300 2350 Low: 9800 1850 Close: 12300 2350

L Liberty Media SUNW Sun Microsystems CD Cendant WDC Western Digital WM
Washington Mutual THC Tenet Healthcare IPG Interpublic Group FRE Freddie Mac
CCE Coca-Cola Enterprises CFC CountryWide Financial

Frank Cappiello

DJIA NASDAQ High: 11340 2575 Low: 9575 1755 Close 10750 2234

ACGL Arch Capital AIG Amer International AVY Avery Dennison BAX Baxter
International CAH Cardinal Health CD Cendant HD Home Depot EWJ iShares Japan
PFE Pfizer SU Suncor

Beth Dater

DJIA NASDAQ High: 12560.72 2346.96 Low: 7750.25 1564.64 Close: 11587.04 2151.38

ACDO Accredo Health Systems DOX Amdoc Limited AMGN Amgen Incorporated CCK Crown
Holdings BEN Franklin Resources GYMB Gymboree Corporation JDAS JDA Software
Group PACR Pacer International PXD Pioneer Natural Resources WON Westwood One

Alison Deans

DJIA NASDAQ High: 11400 2100 Low: 9900 1900 Close: 10950 2050

TAPA Travelers SPLS Staples AFC Allmerica L Liberty Media MHK Mohawk Industries
SGP Schering Plough VIAB Viacom HPQ Hewlett Packard

Harvey Eisen

DJIA NASDAQ High: 12500 2825 Low: 8500 1750 Close: 11800 2475

GPX G.P. Strategies HLTH WebMD Corporation WTV Value Vision Media LEG Leggett &
Pratt IVX Ivax ONE Bank One TAP/A Travelers Property Casualty LVLT Level 3
Communications

Mary Farrell

DJIA NASDAQ High: 11500 2300 Low: 9800 1760 Close: 11200 2250

BAC Bank of America CSCO Cisco Systems INTC Intel Corporation KO Coca-Cola JPM
JP Morgan Chase PFE Pfizer PG Proctor & Gamble UNH United Health Group WMT
Wal-Mart Stores XOM ExxonMobilCorp

Tom Gallagher

DJIA NASDAQ High: 12000 2300 Low: 9500 1800 Close: 11111 2100

EDH5C 97 March '05 eurodollar call, strike 97 JYH5 March '05 yen future GCG5
February '05 gold future XLI Industrial Select Sector SPDR fund XLE Energy
Select Sector SPDR fund UTSI UTSI

Frank Gannon

DJIA NASDAQ High: 11700 2400 Low: 9900 1750 Close: 11300 2250

PVN Providian Financial Group QLGC Qlogic Corporation XRX Xerox Corporation TWX
Time Warner IPG Interpublic Group of Comp. NWAC Northwest Airlines Corp. GNTX
Gentex Corporation MRO Marathon Oil Corporation PFE Pfizer EDS Electronic Data
Systems

Kim Goodwin

DJIA NASDAQ High: 11130 2222 Low: 10005 1950 Close: 11130 2165

ESE Esco Technologies MTG MGIC Investment Corp. KMX CarMax TBI Tom Brown SNDX
SanDisk Corporation TSM Taiwan Semiconductor GMH GM Hughes Int'l Ind. HAR
Harman International Ind. FRX Forest Laboratories

Lou Holland

DJIA NASDAQ High: 12926 2369.58 Low: 9307 1481.09 Close: 11581 2172.25

KSS Kohls PFE Pfizer FHCC FirstHealth Group VIAB Viacom ACS Affiliated Computer
Serv. WTW Weight Watchers Int'l. WSH Willis Group CFC Countrywide Financial
AIG American International Group

Mike Holland

DJIA NASDAQ High: 12345 2345 Low: 9111 1776 Close: 12321 2321

XOM ExxonMobil DIA Dow Jones Industrials ETF OIH Oil Service ETF XLB S&P
Materials ETF XLI S&P Industrials ETF

John Kim

DJIA NASDAQ High: 12000 2500 Low: 9500 1750 Close: 11500 2400

HEW Hewlett Packard SRA Serono WFHC Womens First HC CSCO Cisco SCH Charles
Schwab SIRI Sirius Satellite Radio HIG Hartford Financial

Gretchen Lash

DJIA NASDAQ High: 11650 2280 Low: 11650 1875 Close: 985 2250

FDO Family Dollar Stores LOW Lowe's Companies UVN Univision Communications FNM
Fannie Mae TEVA Teva Pharmaceutical Ind. HPQ Hewlett Packard Company MQT
Motorola ERTS Electronic Arts EMZ GEMZ DISH Echostar Communications

Barbara Marcin

DJIA NASDAQ High: 12000 2370 Low: 9380 1600 Close: 11800 2170

CD Cendant AES AES Corporation EP El Paso HON Honeywell L Liberty Media FE
First Energy DOW Dow Chemical WYE Wyeth SIRI Sirius Satellite XMSR XMSR

Roger McNamee

DJIA NASDAQ High: 11582.21 2428.98 Low: 10341.26 987.38 Close: 11375.39 2271

STX Seagate CSCO Cisco BOBJ Business Objects INTU Intuit FLEX Flextronics MOT
Motorola

Brian Rogers

DJIA NASDAQ High: 12000 2300 Low: 9600 1600 Close: 11850 2200

BMY Bristol Meyers IFF International Flavors MMC Mash & McLennan NWL Newell
Rubbermaid Q Qwest RTN Raytheon UNM Unum WIN Winn Dixie WYE Wyeth VIA.B Viacom

Nick Sargen

DJIA NASDAQ High: 12350 2600 Low: 9400 1600 Close: 11500 2300

GE General Electric MAS Masco CSC Computer Science Corp. VLO Valero CMCSK
Comcast MCK McKesson WTI West Texas Intermediate

Liz Ann Sonders

DJIA NASDAQ High: 12300 2500 Low: 9800 1850 Close: 11500 2300

HNI HON Industries CVH Coventry Health Care CTXS Citrix Systems ASPT Aspect
Communications PPP Pogo Producing MON Monsanto PTRY Pantry DGII DIGI
International F Ford PRU Prudential Financial

Bob Stovall

DJIA NASDAQ High: 11355.5 2305 Low: 9915.25 1865 Close: 10872.5 2195

BA Boeing JNJ Johnson & Johnson KRB MBNA MOT Motorola MRK Merck NG Nova Gold
NUE Nucor Corporation TSG Sabre Holdings "A" SSL Sasol UNH Unitedhealth Group

Marty Zweig

DJIA NASDAQ High: 10875 Low: 8625 (Panelist has no Close: 9325 prediction)

1 year t-note 1.625 January '05 (50 weighting) Gold bullion future - 1 year (50
weighting)

Rich Bernstein

Company Banking Personal/ ML 1 ML officer or director Name Relationship Family
Ownership an officer or director Ownership of company

(Yes/No) (Yes/No) (Yes/No) (Yes/No)

ABT Yes No Yes No RTN Yes No Yes No XOM Yes No No No CAG Yes No Yes No

Laszlo Birinyi - The panelist personally owns the following stocks: SUNW, WM
and CFC. Additionally, the panelist owns through his firms managed accounts
the following stocks: L, SUNW, CD, WM and CFC. Birinyi Associates does not
have any investment banking relationships with any company.

Ed Brown - The panelist's firm owns all of these stocks on behalf of clients.

Frank Cappiello - McCullough, Andrews & Cappiello owns these stocks in client
accounts and the panelist owns some of these stocks personally.

Beth Dater - The panelist failed to provide the requested disclosure.

Harvey Eisen - The panelist failed to provide the requested disclosure.

Alison Deans - The panelist owns of the stocks recommended.

Mary Farrell - Bank of America - UBS AG, its affiliates or subsidiaries has
acted as manager/co-manager in the underwriting or placement of securities of
this company or one of its affiliates within the past 12 months. UBS AG, its
affiliates or subsidiaries has acted as manager/co-manager in the underwriting
or placement of securities of this company or one of its affiliates within the
past three years. Within the past 12 months, UBS AG, its affiliates or
subsidiaries has received compensation for investment banking services from
this company.

- Cisco Systems 0 UBS Securities LLC makes a market in the securities and/or
ADRs of this company. The analyst covering this company, a member of his or
her team, or one of their household members has a long common stock position in
this company. Within the past 12 months, UBS AG, its affiliates or
subsidiaries has received compensation for investment banking services from
this company.

- Intel Corp - UBS Securities LLC makes a market in the securities and/or ADRs
of this company

- Coca-Cola - UBS AG, its affiliates or subsidiaries expect to receive or
intend to seek compensation for investment banking services from this company
within the next three months. Within the past 12 months, UBS AG, its
affiliates or subsidiaries has received compensation for investment banking
services from this company.

- JP Morgan Chase - UBS AG, its affiliates or subsidiaries has acted as
manager/co-manager in the underwriting or placement of securities of this
company or one of its affiliates within the past 12 months. Within the past
three years, UBS AG, its affiliates or subsidiaries has received compensation
for investment banking services from this company. UBS AG, its affiliates or
subsidiaries has acted as manager/co-manager in the underwriting or placement
of s curities of this company or one of its affiliates within the past three
years.

- Pfizer - UBS AG, its affiliates or subsidiaries beneficially owned 1 or more
of a class of this company`s common equity securities as of last month`s end
(or the prior month`s end if this report is dated less than 10 days after the
most recent month`s end). Within the past 12 months, UBS AG, its affiliates or
subsidiaries has received compensation for investment banking services from
this company.

- Proctor & Gamble -UBS AG, its affiliates or subsidiaries has acted as
manager/co-manager in the underwriting or placement of securities of this
company or one of its affiliates within the past five years.

- United Health Group - UBS AG, its affiliates or subsidiaries has acted as
manager/co-manager in the underwriting or placement of securities of this
company or one of its affiliates within the past 12 months. Within the past 12
months, UBS AG, its affi iates or subsidiaries has received compensation for
investment banking services from this company.

- Wal-Mart Stores - No Disclosures

- ExxonMobil Corp - No Disclosures

Tom Gallagher - I don't own any of these securities directly. I own UTStarcom
through a Wilshire index fund.

Kim Goodwin - The panelist owns all of the stocks through holdings in State
Street Research.

Frank Gannon - The panelist failed to provide the requested disclosure.

Lou Holland - The panelist owns all of the stocks he recommended.

Mike Holland - The Panelist owns ExxonMobil in his fund.

John Kim - The Panelist owns all of the stocks the recommended.

Gretchen Lash

Barbara Marcin - The panelist owns all of these picks directly or through
Gabelli Asset Management, which she owns.

Roger McNamee - The panelist owns all of the stocks except Motorola.

Nick Sargen - The stocks mentioned by the panelist are in portfolios held by
Fort Washington Investment Advisors. The firm, however, is not shorting oil -
this is simply a forecast.

Brian Rogers The panelist has a significant investment in the Price Equity
Income Fund which holds each of the companies mentioned.

Liz Ann Sonders - Schwab has received compensation from Ford and Prudential for
participating in investment banking services (fixed income offerings) in the
past 12 months and expects to receive compensation for fixed income offerings
from Ford in the next three months.

Bob Stovall - Wood Asset Management clients and/or the panelist owns all 10 of
these stocks.

Marty Zweig - The panelist does not own gold bullion but does own the 1 year
t-bond.

-- posted by SteveT

Top 737. Jan 4, 2004 7:11 AM

» SteveT - 1-2-04

We start 2004 with Sue Herera sitting in for Lou and she indicated Lou is expected to make a full recovery. Sue reviewed some of the major events of 2003 which I am sure you have already heard. She did spend some time on commodity prices rising in 03 saying Platinum bodes well for a continuing recovery in manufacturing. She finished speculating if the weak Dollar and higher oil prices would be worrisome for inflation down the road?

Mike Holland says 03 was a great year after three bad ones. If you look back at what people were saying a year ago about the economy and markets, we did get to an over sold condition. Now is a pivotal time, will it be to a bear or upward with this new bull? Mike thinks it is more likely the bull will prevail in 04. The ISM numbers release Friday morning were strong, profit momentum is increasing, inflation is low. In this environment it is hard to imagine stocks doing poorly. Holland sees strength in China and India and they will be consuming more energy and are starting to import oil. For that reason he like Exxon Mobil (XOM) and Schlumberger (SLB).

Liz ann Sonders thinks things still look terrific. She does not think there is too much optimism. She believe many individual investors are still skeptical. Some are worrying about inflation and rising rates. Sonders think 2004 could be a year where earnings acceleration could top stock price increases. She thinks economic growth and earnings are still under stated. We could end 04 with better valuations than we started with. Liz Ann is favorable on energy too and likes Pogo Producing (PPP). She also likes Ford (F), HON Industries (HNI), and Monsanto (MON).

Frank Cappiello says the economy looks terrific and he is very bullish. He believes the FED will start raising rates by summer, then the elections come around. The market has a Bush victory priced in along with Republicans maintaining control of Congress. He says if the Dollar continues to weaken the FED is going to have to move quicker to preserve the integrity of the Dollar. He said a weak Dollar is a very bad thing. Frank recommends staying with this market but did say in his life he has never seen so much speculation in such a short period of time. There are 200 IPOs ready to go. Stocks Cappiello likes are Baxter International (BAX) and I-Shares of Japan (EWJ).

Sue then introduced special guest Abby Joseph Cohen. Abby thinks 2004 will be less interesting than 2003. She expects profit growth and stocks to end higher, by years end the S&P 500 target is 1250 and the DOW at 11,800. Profit growth was rapid the second half of 03 and that should decelerate in 2004. She said the FED will be less friendly but it will take a long time for then to get "ugly". Abby expects 2004 GDP to be around 4% and profit growth in the low double digits. She went on to say the five and ten year bonds are now assuming the FED will begin tightening in May or June. That is already priced into the market. She don't think the increases will be dramatic since there are no signs of inflation. She mentioned a term called "snugging" could come into play. Perhaps this year or next we could see very small increases in short term rates to reflect what was already built into the bond market.

Mike asked Abby for advice to new investors on how to handle volatile markets. She said it is good when investors are a little nervous, they think about what could go wrong. They also need to think about fundamentals. Over long periods of time what drives stock prices is the economy. The U.S. economy is extraordinarily competitive in the world. Our outlook is good, we have a strong banking system, and great productivity. She advises balance, diversification, and a true sense of risk tolerance. Liz Ann asked Abby to contrast Asia and Europe economies with the U.S. The U.S. has moved away from a competitive trade model where we try to produce everything as cheaply as China or India. We have moved to comparative trade model where we try to use our most precious resources of people and capital to produce high value added products and services. She believes out trade deficit will improve as the economies of Europe improve. Frank said commodity prices have gone off the charts and asked if Alan Greenspan will act sooner vs. later due to commodity prices. She doesn't think the FED will be overly responsive to rising commodity prices. One reason is rising commodity prices indicate demand is increasing. Also some of the increase is due to the weak Dollar, if you adjust for that the rise is not nearly so dramatic.

Next weeks special guest will be Hersh Cohen manager Smith Barney Appreciation Fund.

-- posted by SteveT

Asset Allocation Review for 2003

Top 738. Jan 4, 2004 10:38 AM

» Kirk - Re: 1-2-04

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In response to message posted by SteveT:

On cue for asset allocation and a balanced portfolio to smooth portfolio returns in up and down markets, I just updated my asset allocation article:

Exerpts:

The benefit of an asset allocation between stocks and bonds is the two asset classes tend to counter balance each other with the bonds having an effect of smoothing out the fluctuations in your total portfolio value.

Long term, 20 years or more, 100% equities has always offered the best overall returns but you pay a high price in volatility. If you are young and have far more than 25 years until retirement, then a portfolio between 100% stocks and 80:20 probably makes the most sense. Once you are within 25 years of your desired retirement date, then it makes great sense to increase your allocation to bonds in your asset allocation. This will smooth out the fluctuations so you can have a more stable portfolio when you retire.

In the article, I compare portfolios of all stocks, all bonds and three mixed portfolios.

2003 in Review

The DJIA finished 2003 up 25%
The NASDAQ finished 2003 up 50%.
VFINX (Vanguard's S&P500 Index Fund) finished 2003 up 28.5%
VTSMX (Vanguard Total Stock Market Index Fund) finished 2003 up 31.35%
VFIIX, (Vanguard GNMA Fund) finished 2003 up 2.49%
VBMFX (Vanguard Total Bond Fund) finished 2003 up 3.97%
Kirk's Newsletter Stock Portfolio finished 2003 up 76.7% (and it has 30% in fixed income!)

-- posted by Kirk

Top 739. Jan 10, 2004 7:17 AM

» SteveT - 1-9-04

Ron Insana served as guest host while Lou continues to mend. Ron reviewed one of the Wall Street Bromides "The January Barometer" Over the past fifty years or so as the month of January goes so goes the year, most of the time. Also as the first five trading days of January goes so goes January, most of the time. The first five trading days of the new year had nice gains but the sixth day saw a pull back, mostly due to the jobs report. We'll have to wait three weeks to see how the Superbowl indicator turns out. The four year Presidential election cycle and Hemline indicators also I am sure will be watched closely as the year unfolds.

John Kim believes the bull is alive and well and will continue into 2004. He is not expecting it to be as strong as it was in 2003. He sees no reason for it not to be a good year as Capital spending is starting to take off and inventories are improving. He does think the consumer and housing will slow. John likes the financial sector including Charles Schwab (SCH), Hartford Financial (HIG), and Hewitt Associates (HEW).

Barbara Marcin says the prevailing trend is positive. The consumer is still strong, Profits and corporate spending are picking up, and we have plenty of stimulus. She is expecting high single digit stock market returns for the next several years. Marcin looks to buy stocks that will be able to improve earnings the next three years. Some she expects will be able to do so are Dow Chemical (DOW), Honeywell (HON), and Ingersoll-Rand (IR).

Rich Bernstein still continues to be cautious about 2004. His maim worry is, will the profit cycle decelerate? In 2003 the comparisons were very easy, that will not be the case in 2004. Saying there is always opportunity on Wall Street Rich is keen on the consumer staples, energy, and defense. Stocks he likes are ConAgra (CAG), Exxon Mobil (XOM), and Raytheon (RTN).

Ron then introduced special guest Hersh Cohen, Co-Manager Smith Barney Appreciation Fund. Hersh has a Ph.D. in behavioral sciences and believes psychology is a driver in the markets but mostly at the extremes. We had a big extreme on the upside in 1999 and got the other side of the coin in March 2003. The rest of the time earnings and interest rates move markets. He thinks now is one of the in-between times. Many individuals are nervous about the market, he doesn't see much chasing the hot funds, he does see people buying funds with good long term consistent records. Cohen believes the NASDAQ is being driven by professionals, along with hedge funds and some pure speculation. Hersh believes as people begin doing their tax returns and see the benefits of dividends that companies with a history of increasing dividends should be more attractive.

Rich asked how to know if a dividend is secure and will continue to be paid. Look for a solid balance sheet and free cash flow. Also look at the company debt rating and the history of the dividend. Barbara asked if there is any good values in financials now. His biggest holding is Berkshire Hathaway (BRKa), he also is now buying St. Paul Companies (SPC). John asked about the outlook for Pharmaceuticals in 2004. After a few weak years many are good values now. He isn't sure what the catalyst will be yet. As always he looks for great companies with solid balance sheets and the ability to raise dividends. A couple he likes are Pfizer (PFE) and Johnson & Johnson (JNJ).

Ron asked if the news of Eliot Spitzer was considering bringing an action against drug companies for restraint of trade a concern. Hersh can't see another headline doing much damage, saying the drug companies are the whipping boy for many politicians. He believes this Country is better off having a profitable drug industry. Ron then asked how much influence the elections would have on the markets. One thing that could spook the markets is if one of the candidates that wants to reverse the tax cuts gets traction. Another concern all though a slight one is, the Dollar continues to weaken against China & Japan and they stop buying our treasuries. He thinks that is remote and interest rates will remain benign. A terrible terrorist attack on U.S. soil would probably affect the markets now more than a year ago. The 10-year Treasury quickly getting to a 5% yield would be a negative also. For now the trends are positive, the economy looks good and job growth should begin in the Spring.

Next weeks special guest will be John Montgomery President and manager Bridgeway Funds. The panel will be Alison Deans, Mary Farrell, and Frank Gannon.

-- posted by SteveT

Top 740. Jan 17, 2004 6:45 AM

» SteveT - 1-16-04

Maria Bartiromo filled in for Lou, reporting on the cold snap engulfing the Northeast, the price of oil, retail sales, and the can of worms opened by former Treasury Secretary Paul O'Neill. Hopefully over the next few weeks positive earnings will dominate the headlines. Other news of the week was bank mergers and a deal in the Fastow case. Trials are soon to begin for Martha Stewart and a host of others in the Enron and WorldCom collapses.

Alison Deans says most investors are encouraged by the actions of the SEC and prosecutors in dealing with scandals. The reality is the abuses are behind us and the loses weren't all that great to most investors. The market is going up and people want to get in. The economy is in recovery and she expects the market to be up 10%-12% in 2004. Deans expects fiscal stimulus to continue up until the election, low interest rates should continue as well. Overseas economies are starting to recover and the weak Dollar should help exporters. Alison expects a weak employment picture to dampen inflation. Corporations are starting to spend and do some hiring and this should increase merger and acquisition activity and drive the market higher. Alison looks for new stock ideas with a value bias. She looks for laggards and a low P/E plus potential for something to change the earnings momentum. She is avoiding Utilities. Deans used to work at Bank One and likes that merger, thinking the benefits advertised are understated. She also likes Alcoa (AA), Liberty Media (L), and Allmerica Financial (AFC).

Frank Gannon thinks the market will do a little better than 10%-12% this year. He believes market performance should be in line with earnings growth and we have yet to see peak earnings in this cycle. Frank thinks the economic expansion is durable and sustainable and that is what will drive earnings growth. He is looking at sectors that will benefit from the economic turn around, Industrials and some select technology. Gannon likes Hewlett Packard (HPQ), Tyco International (TYC), and Verizon (VZ).

Mary Farrell says investors can benefit in many ways in this type of market. The first thing to do is review your portfolio she advised. Her inclination now would to become more defensive after a good year. She likes Consumer staples and Health care sectors with emphasis on dividends. Farrell believes earnings should grow about 15% this year and the over all market should gain 10% at a minimum. Stocks she likes are Colgate Palmolive (CL), McDonalds (MCD), and Wachovia Corp. (WB).

Maria then asked each panelist what potential red flag could crop up and change their forecasts for the economy and markets. For Alison it is a faster than anticipated job growth that could fuel inflation and the Dollar decline continuing. Frank is worried higher oil prices will slow the economy. Mary worries about a disorderly decline in the Dollar and trade deficits along with Federal Budget deficits getting out of hand.

Maria then introduced John Montgomery, President Bridgeway Funds. John uses purely a quantitative approach, using a computer model devised as a student. He doesn't make site visits or read Wall Street analyst reports. He is a bottoms up stock picker looking at numbers and statistics. Right now the Telecommunication sector looks good to him. He also is holding sina.com (SINA) the Chinese Internet company. He bought it at $1.00-$1.50, it is around $47 now and looks fully valued but he hasn't sold any yet. He is and has been selling Home Builders and interest rate sensitive stocks. His model does not have an interest rate variable, but if you step back and look on aggregate the rate sensitive stocks are among those he is selling.

Alison asked if he looks at a sector and then picks names from that list or looks only at names. Montgomery looks just at names, one at a time. He does do some top down analysis for risk management to avoid getting to heavily in one sector, cost management, and tax management. Right now Telecom looks good and his top holding is Nextel (NXTL) he also likes Ford (F). Frank asked for advice for the individual investor in today's environment. Don't chase hot stocks or funds. Look to be diversified and at the long term. Mary asked him to define Ultra small cap and asked if he sold automatically if the stock gained enough to no longer fit that definition. John defined Ultra small cap as the smallest 10% of the NYSE. Currently that is around $200 Million, it did get as low as $75 Million. (by not addressing the sell discipline can we assume he lets his winners run?)

Next weeks special guest will be Doug Cliggott, President B&P Research. The panel will be Beth Dater, Harvey Eisen, and Kim Goodwin.

-- posted by SteveT

Top 741. Jan 18, 2004 8:06 AM

» pbradford6 - Re: 1-16-04

In response to message posted by SteveT:

Steve, thanks for your weekly posts. I am wondering if Lou himself will ever return. Back surgery is very difficult when you are young and much more so when you're older.

I hope he'll be healthy enough to return.

-- posted by pbradford6