Douglas Jimerson on NBR:
<<PAUL KANGAS: My market monitor guest this week is Douglas Jimerson, president of national investment advisors, a money management firm based in Potomac, Maryland. And Doug is also the editor of the "National Trend Lines Monthly Market Newsletter." Welcome back, Doug.
DOUGLAS JIMERSON, PRESIDENT, NATIONAL INVESTMENT ADVISORS: It's great to be back, Paul, thank you.
KANGAS: You have been sort of a reluctant bull, being a conservative investor, and your money under management is mostly in mutual funds. That's your main vehicle.
JIMERSON: That is correct.
KANGAS: But you haven't been a great proponent of the high tech whirlwind, have you?
JIMERSON: Well, not so much. Now, of course, when I was on in June I said we had taken some profits in Internet stocks like Amazon.
KANGAS: Yes, that's right.
JIMERSON: And I still feel that's the correct posture, that these stocks are putting in double tops.
KANGAS: OK. And your favorites back then were mostly natural resource issues like Mobil and Chevron, and, of course, Mobil is up nicely. Chevron is down a bit from where it was when you originally recommended it, but they're still hanging on. And as a matter of fact, our viewer question today centers around this very industry. And here is the question. It's been a disappointing year for oil companies but now that oil prices are up, when should investors see a rise in the values of these companies? And that question comes tonight from Joe Lantini of Brooklyn, New York. What say you?
JIMERSON: Well, here we have oil has nearly tripled in roughly the past year and the big oil companies have not had big moves and I think that they still have the potential here. So this is a buying time, it's still accumulate time for oil stocks. And other energy issues have done extremely well. The average energy mutual fund is up 20 percent to 50 percent this year. So it has been a good year in some other areas. But the big oil stocks I think have a move ahead of them.
KANGAS: What about Mobil? Do you think the Exxon takeover is going to occur?
JIMERSON: Well, I do.
KANGAS: Yeah?
JIMERSON: And so at this point you're really buying Exxon.
KANGAS: OK.
JIMERSON: But, again, this area has had a long-term basing which I think offers future potential.
KANGAS: So you still like the group?
JIMERSON: Yes, I do.
KANGAS: What about the market's health generally, especially from a technical standpoint?
JIMERSON: Well, from a technical standpoint, I can see a head and shoulders top in the Dow and the Dow has been in a trading range over the last six months. We probably are going to have some down side ahead because we've got the Y2K concerns, which have driven IBM down 15 percent since the end of June.
KANGAS: And do you think that that's overly done, these concerns?
JIMERSON: No, I don't and I think there's more of that to come. But the other major concern is the Fed and the Fed is likely to raise rates again. We've seen...
KANGAS: How soon?
JIMERSON: We've seen what I was expecting. Well, I think by February we would see an increase. But the market is going to be worried about that and we've had now three increases. That triggers the three steps and a stumble rule which is right more than two thirds of the time for forecasting a bear market decline.
KANGAS: So you're still biting your nails a bit, right, Doug?
JIMERSON: I'm concerned because I think a 20 percent plus decline is indicated by that kind of interest rate scenario.
KANGAS: OK. Your current strategy?
JIMERSON: Well, currently we're 50 percent in stocks we're 20 percent in bonds and 30 percent cash. I think that bonds really are not of great risk. The short-term rates could rise some more but as long as the Fed keeps a little bit ahead of the potential of inflation then the bond market should be OK. And again, primarily in stocks we're going with this defensive strategy. Now, obviously if somebody wanted to just play the trend in some stocks, they can do that. We believe that the trend is your friend, but we're getting near the end of the game for these stellar Internet players.
KANGAS: When you were last with us in June, Doug, you did say buy ConAgra (CAG) around 25. It's about 24 and a half. What do we do?
JIMERSON: I would say hold that or buy it because it's had a long-term base. This is the sort of thing we look for as technicians.
KANGAS: OK.
JIMERSON: Now, one other area that I think is important is to look at safety, other ways of securing your portfolio. We have information on that on our Web site at insuredassetallocation.com.
KANGAS: All right, that's part of your operation up there in Potomac?
JIMERSON: Yes, it is.
KANGAS: All right, Doug. So still kind of nervous, but still very much invested?
JIMERSON: Yes, sir.
KANGAS: Thanks very much.
JIMERSON: Thank you so much, Paul.
KANGAS: My guest, Doug Jimerson, president of National Investment Advisors.>>
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