NBR transcript w/Kaminsky and ASND rec
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GHARIB: Well the Dow is only 30 points away from hitting a new record high.
And joining us now to talk about what's next for the markets is Gary
Kaminsky. He is managing director of the private banking group at Cowen &
Company, the Wall Street investment firm. Nice to have you with us, Gary.
GARY KAMINSKY, MANAGING DIRECTOR, COWEN & CO: Good
evening.
GHARIB: What is it going to take to get this market to go higher, to hit that
record?
KAMINSKY: Well, clearly today people should be reminded that it's all about
interest rates. And as soon as the long bond broke that 6 percent level which
had been sort of a nervous level, money came back in. And the blue chips in
the stocks went higher. And it should be a very clear reminder that this is
market driven by interest rates.
GHARIB: And that was the interesting, the bond rallied up a full point getting
that yield below 6 percent, as you were saying. So there's all this talk then that
the Federal Reserve when it meets a week from today, won't be raising interest
rates. Do you agree with that?
KAMINSKY: Well, I think a week ago there seemed to be a lot of, a lot of
attitudes that this was a certain move up. In a matter of a week this certain
move up has now shifted to, hey, maybe they're going wait for the May
employment data before you see another move. And there's been sort of a
relief rally on that stand point.
GHARIB: Do you see any dangers in this market? What makes you nervous?
KAMINSKY: Well, the valuations are high. And they've been high for, for
many years now in terms of historical P/Es. But I think you have to be nervous
when you think of the overall valuation parameters, historical. But history is just
that, it's history. We're in a different era now. And clearly today's another
example of the money that just continues to come in.
GHARIB: All right, so we're in this different era. How are you playing this
market? What are you doing with your clients' money?
KAMINSKY: Well, we are, we are paid to be investors. I'm not an asset
allocator. I am paid to invest in stocks. And that's what we do. And what we
really try to do is focus on stocks, not the market. We're not, we're not market
sector players. What we're trying to do is find companies that have unique
situations. And that they will then, Wall Street will eventually pick up on. And
the valuations will move accordingly.
GHARIB: All right. So what are some of the stocks that you like right now?
KAMINSKY: We've been in a lot of the same stocks as boring as it sounds
for many years. And those are still the stocks we own, whether it's Bank of
Boston (NYSE:BKB), Computer Associates (NYSE:CA). In terms of blue
chips names, there are, there are a whole slew of more aggressive stocks that
we own. Some of those include Synetic (NASDAQ:SNTC), Globalstar
(NASDAQ:GSTRF), Ascend Communications (NASDAQ:ASND). There is
a selection process which is making sure that you, when you invest in more
aggressive stocks that you make sure that the amount that you put in them is, is
relative to the overall portfolio.
GHARIB: Gary, what do you think about Microsoft (NASDAQ:MSFT)? A lot
of news going about Microsoft. The stock is at 85 now. Are you a buyer or a
seller of this stock?
KAMINSKY: Well, Microsoft is one of those stocks that has a very high
valuation. In fact, the company will tell you the same thing. The valuation is high.
But it is a leader and is a company that has obviously been a great signal in this
bull market. In terms of the news today, Microsoft which is 20 percent,
approximately 20 percent off its recent high, there'll be a relief rally. There's
been nervousness about Windows98. And that will certainly make people feel
that it's time to get back in. As far as...
GHARIB: Are we going to have
KAMINSKY: as far as, as far as my position
GHARIB: we're going to have to leave it there.
KAMINSKY: we would be holders.
GHARIB: You'd be holders. Thank you so much.
KAMINSKY: You got it, Susie.
GHARIB: Glad you're with us on NIGHTLY BUSINESS REPORT. And
we've been speaking with Gary Kaminsky. He is the managing director of
Cowen & Company.
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