Prudential's Ralph Acampora (Transcript of
Interview)
New York, Dec. 28 (Bloomberg) -- The following is a transcript of a Bloomberg
interview with Ralph Acampora, director of technical research at Prudential
Securities. The reporter is Dean Shepherd.
SHEPHERD: RALPH ACAMPORA JOINS US NOW FROM PRUDENTIAL
SECURITY OFFICES IN DOWNTOWN MANHATTAN. GOOD MORNING,
RALPH.
ACAMPORA: GOOD MORNING, DEAN.
SHEPHERD: YOUR ANALYSTS ARE CUTTING ESTIMATES ON I.B.M. AND
DELL. HOW DO THEY LOOK NOW
ACAMPORA: THEY HAVE BEEN LOOKING HEAVY FOR SOME TIME. I
WAS CONCERNED WHEN I.B.M. BROKE THE LEVEL OF 86 OR 87. THAT,
FOR ME, WAS A MAJOR BREAKDOWN IN PRICE. UNFORTUNATELY I
THINK THAT I.B.M. CAN GO LOWER.
SHEPHERD: DOES THAT TAR THE ENTIRE SECTOR WITH THE SAME
BRUSH?
ACAMPORA: I THINK IT LAYS WEIGHT ON THE SECTOR AND IT MAY
SPILL OVER TO OTHER AREAS SIMILAR TO I.B.M. I DON'T THINK WE
HAVE SEEN THE END OF THE WEAKNESS IN SOME OF THE TECH
NAMES.
SHEPHERD: LET ME ASK YOU ABOUT THE BROADER MARKET. HAS
THE ACTION OVER THE LAST FEW SESSIONS GIVEN YOU A CLEARER
SENSE OF WHERE WE'RE HEADED SHORT TERM?
ACAMPORA: YEAH, I THINK IT REALLY HAS. IT WAS A CLEAR
INDICATION, ESPECIALLY YESTERDAY WHEN YOU SAW SOME OF THE
STRENGTH COMING BACK INTO THE DEEP CYCLICALS, LIKE PAPERS,
ALUMINUMS, STOCKS LIKE THAT, CATERPILLAR TRACTOR, FINANCIALS,
I THINK IT IS A DEFINITIVE SHIFT THAT STARTED FROM THE NEW
ECONOMY INTO THE OLD ECONOMY, WHICH ARE THE NAMES I
MENTIONED.
SHEPHERD: SO THE OLD ECONOMY WILL CONTINUE TO LEAD THE
WAY INTO THE NEW YEAR?
ACAMPORA: YEAH, I THINK SO AND IT WILL HAVE A POSITIVE IMPACT
ON SOME OF THE AVERAGES LIKE THE DOW JONES INDUSTRIAL
AVERAGE.
SHEPHERD: WHAT KIND OF LEGS DO YOU THINK THAT IS LIKELY TO
HAVE IN THE OLD ECONOMY STOCKS?
ACAMPORA: WELL THAT'S A WONDERFUL QUESTION. IF I FELT LIKE
TECHNOLOGY HAS BOTTOMED, I WOULD SAY I DON'T THINK IT WOULD
LAST LONG, I DON'T THINK THAT TECHNOLOGY HAS BOTTOMED.
SHEPHERD: SO IT IS A VERY SPLIT MARKET?
ACAMPORA: ABSOLUTELY. AND THERE IS A THING THAT WE
TECHNICIANS LOOK AT, WHICH IS THE BREADTH OF THE MARKET, THE
NUMBER OF STOCKS THAT GO UP AND DOWN, THAT HAS BEEN
BOTTOMING OUT SINCE MARCH, THAT IS AN INDICATION THAT YOU'RE
GOING BACK TO THE OLD NAMES.
SHEPHERD: IS THERE ANYTHING IN TECH AND THE SO-CALLED NEW
ECONOMY STOCKS, IS THERE ANYTHING IN THERE THAT LOOKS LIKE
IT IS TRULY BOTTOMED AND REPRESENTING A SCREAMING BUY?
ACAMPORA: I HAVE TWO I LIKE. ONE IS UNISYS AND THE SECOND
ONE IS QUALCOMM. SO THOSE TWO I LIKE IN PARTICULAR.
SHEPHERD: WHY DO YOU LIKE THEM?
ACAMPORA: THEY LOOK LIKE THEY BOTTOMED MONTHS AGO, AND
ANY KIND OF WEAKNESS, THEY DONE MAKE NEW LOWS.
SHEPHERD: HOW DEPENDENT -- I MEAN WE HAVE TALKED SO MUCH
ABOUT HOW THE MARKETS HAVE BEEN REACTING TO ANY -- EVEN A
HINT OF WHAT THE FED IS LIKELY TO DO. HOW MUCH DOES THAT
CONCERN YOU THAT THE MARKET SEEMS TO BE HANGING ON EVERY
WORD AND TRYING TO READ ALMOST TOO MUCH, IT SEEMS, INTO
WHAT THE FED IS DOING AND LIKELY TO DO.
ACAMPORA: WELL, I HAVE TO TELL YOU EVERY YEAR AT THIS TIME,
DEAN, I WRITE WHAT I CALL A FIELDER'S FORECAST, I HAVE TO GO
OUT 12 MONTHS AND PREDICT WHAT THE NEW YEAR WILL BE LIKE. I
CAN GO OUT 12 MONTHS THIS TIME. I CAN GO OUT SEVERAL MONTHS.
THE PROBLEM IS BASED ON WHAT YOU SAID, WHAT WILL THE FED
DO, WILL THE FED BE ACCOMMODATING, AND I'M NOT TALKING ABOUT
A SIMPLE 25-BASIS POINT DECLINE, I THINK THAT ALAN GREENSPAN
HAS TO REALLY FOLLOW THROUGH. THE FED IS VERY IMPORTANT TO
ME AND THE STOCK MARKET.
SHEPHERD: SO YOU THINK THAT THE MARKET IS ALREADY PRICING IN
A 50-BASIS POINT CUT IN JANUARY?
ACAMPORA: I DON'T KNOW. BUT 25-BASIS POINT IS PROBABLY BAKED
INTO THE PIE ALREADY.
SHEPHERD: A LOT OF FOLKS SAY THAT THEY EXPECT IT TO COME
BEFORE THE MEETING. IS THAT A NECESSITY?
ACAMPORA: I SURE HOPE SO. YES, IT IS A NECESSITY.
SHEPHERD: SO IF WE GET 25 IN JANUARY, HOW MUCH MORE DO WE
NEED FROM THE FED TO KEEP THIS THING ALIVE?
ACAMPORA: I'M NOT AN ECONOMIST, BUT I WOULD LIKE TO SEE
SEVERAL MORE OF THOSE. I THINK THAT WE NEED THEM.
SHEPHERD: PRIMARILY YOU WOULD FOCUS ON THE PAPERS AND
CHEMICALS?
ACAMPORA: YOU KNOW, THE UTILITIES MAKING NEW HIGHS LOOK
GOOD, DRUG STOCKS ARE DOING WELL, FINANCIALS LIKE REGIONAL
BANKS ARE DOING EXTREMELY WELL. THERE ARE A LOT OF GOOD
THINGS TO BUY, BUT UNFORTUNATELY THEY'RE NOT THE NAMES THAT
PEOPLE WANT TO HEAR, I TALK ABOUT PHILIP MORRIS AND WASTE
MANAGEMENT, KIND OF NOT SEXY ENOUGH.
SHEPHERD: WHO WOULD HAVE THOUGHT THAT PHILIP MORRIS
WOULD BE THE LEADER OF ALL FOR THE YEAR 2000.
ACAMPORA: THAT'S WHERE IT IS GOING. I THINK THAT'S AN INDICATION
OF WHAT THE NEW YEAR WILL BE LIKE.
SHEPHERD: ARE INVESTORS GOING TO HAVE A TROUBLE BEING
WEANED FROM TECH AND GOING INTO PAPER AND TOBACCO?
ACAMPORA: I'LL TELL YOU, I WAS AT A CLINE'S OFFICE LAST
WEEKEND AND I SAY THAT I.B.M. MAY GO LOWER, HE SAID, THANK
YOU VERY MUCH, GET OUT OF MY OFFICE. THEY DON'T WANT TO
HEAR THAT.
SHEPHERD: YOU WERE HAVING SOME DIFFICULTY CONVINCING YOUR
CLIENTS.
ACAMPORA: YES, THEY FEEL ADAMANT THAT TECHIE IS THE WAY TO
GO AND I'M SAYING TO BE SELECTIVE.
SHEPHERD: AND YOU WILL HAVE TO WAIT FOR THOSE TO COME TO
YOU IT SOUNDS LIKE.
ACAMPORA: WHY BE THE HERO, I WOULD RATHER BE THE CABOOSE
COMING INTO THOSE STOCKS.
SHEPHERD: LET'S LOOK AT SOME OF THE STOCKS THAT YOU
RECOMMENDED FOR US ON THE FIRST OF NOVEMBER. AT THE TIME
YOU LIKED MICROSOFT, YOU LIKED CHUBB, YOU LIKED FOREST LABS.
CHUBB IS THE LOAN GAINER, UP 7% NOT BAD, MICROSOFT IS DOWN
25%, AND FOREST LABS IS DOWN 6%. IS MICROSOFT STILL GOOD?
ACAMPORA: NOT REALLY. IT DIED SOMEWHERE IN THE LOW $70'S, I
WOULD PUT THAT IN THE SAME CATEGORY AS DELL AND I.B.M. JUST
NEED MORE TIME.
SHEPHERD: WHAT ABOUT CHUBB, WOULD YOU LIKE TO ADD TO YOUR
POSITION IN THAT ONE?
ACAMPORA: YEAH, I LIKE THE INSURANCE GROUP. CHUBB IS OK.
MAYBE AMERICAN INTERNATIONAL GROUP IS OK. A.I.G.
SHEPHERD: THESE HAVE ATTRACTED SO MUCH MONEY OF LATE
THAT IT MAY BE TIME TO LIGHTEN UP?
ACAMPORA: I THINK IF YOU NEEDED A NEW PLACE THAT MAYBE
MIGHT NOT BE THE AREA TO GO TO, BUT IF YOU OWNED THEM, I
DON'T THINK YOU WOULD SELL THEM NECESSARILY.
SHEPHERD: LET'S LOOK AT THE CURRENT PICKS, WE HAVE
AUTOMATIC DATA PROCESSING, A.D.P., ALLIED WASTE, A.W., IS THE
SYMBOL THERE. THERE IS AUTOMATIC DATA PROCESSING, WHICH
HAS TAKEN POLITIC OF A HAIR CUT, AND ALSO ON YOUR LIST IS UNION
PACIFIC, AND TRIBUNE CO. UNION PACIFIC IS OUT WITH A PROFIT
WARNING THIS MORNING, DO YOU STILL LIKE IT GOING FORWARD?
ACAMPORA: YES, THEY DISCOUNTED A LOT OF THE NEGATIVES AND
THEY REPRESENT THE OLD ECONOMY.
SHEPHERD: ALLIED WASTE, THE SAME STORY THERE?
ACAMPORA: YES, I THINK SO. AS I MENTIONED EARLIER, I WAS
LOOKING AT POLLUTION STOCK AND CHEMICALS, AND I MENTIONED
PUBLISHING, BUT THEY'RE STARTING TO FIRM UP A LITTLE BIT.
SHEPHERD: AND THE TRIBUNE COMPANY IS ESSENTIAL TO THE
ECONOMY IF WE'RE TALKING ABOUT ADVERTISING DOLLARS.
ACAMPORA: YES. THEY'VE COME DOWN AND SEEM TO BE
STABILIZING AND THAT PARTICULAR COMPONENT LOOKS LIKE IT IS
MOVING HIGHER.
SHEPHERD: RALPH ACOMPORA, THANK YOU VERY MUCH. HAPPY
NEW YEAR TO YOU.
***END OF TRANSCRIPT***
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