"Market Monitor"-Frank Cochrane, President,
Investment Timing
Nightly Business Report, 12/3/1999 21:33
Consultants PAUL KANGAS: My guest markets monitor
this week is Frank Cochrane, president of Investment
Timing Consultants, an advisory firm based in
Farmington Hills, Michigan and welcome back, Frank.
FRANK COCHRANE, PRESIDENT, INVESTMENT
TIMING CONSULTANTS: Great to be here, Paul.
Thanks a lot. KANGAS: What, if anything, in that
November unemployment report was so good as to
cause a rally the likes of which we saw on Wall Street
today? COCHRANE: Paul, I think the fact just that the
number came out, everybody, it was a relief rally.
Everybody was real happy to get it over with and
nothing I could materially see, the wage component was
something that was somewhat subdued, so people, I
think, were happy with that. KANGAS: So it was the lack
of negatives rather than a whole lot of positives?
COCHRANE: Yes, and again, just the fact that the
number is out and it's another air of uncertainty that's
up. In fact, the Fed may, you know, the thinking now is
the Fed won't do anything in December. It may not now
in February. KANGAS: But let's take a look at the
condition of this market from a technical basis. What do
you think there? COCHRANE: It's horrendous.
Short-term, I think the risk here is unbelievable.
Extremely high in the NASDAQ, in the Dow. KANGAS:
How much risk? COCHRANE: Ten percent, 8 to, say, 12
percent, in that neck of the woods. KANGAS: That's no
fun. COCHRANE: No, it's no fun, and as people found
out last August and so on. I would not be a buyer here. If
anything, I would sell on the strength. It's extremely
weak. The utility chart looks terrible, although people
don't like to use the D.J. Utility Chart, I think it's fantastic.
It tells you the direction of where interest rates are
going. The transportations are not confirming. The
internals of the market are horrendous, new highs and
new lows today. Look at those today. Every day. And the
market is moving up on a negative tick every day. So I
would be extremely cautious here. However, longer term
the market should go a lot higher after this little
downturn is over. KANGAS: Ten percent, you say, at
worst, and then you have a shopping list to buy things
on that 10 percent correction. COCHRANE: Yes, I do.
KANGAS: What do you buy? What do you buy?
COCHRANE: I think you stick with technology. There's
basically four things that should drive this market higher.
Number one is the recent banking reform. Number two is
the productivity gains that we've seen technology has
provided. KANGAS: OK. COCHRANE: Number three is
the effect of the, not, there's not a tightness of labor,
really. There is here in the United States, but you look at
Mexico, China, Japan, that type of thing - KANGAS:
That's a good point. COCHRANE: - there's, that can be
shipped overseas. And finally, Greenspan talked with
respect to the infancy of the technology, that's
something that he said is basically five years. We've got
another 20 years to go there. So stick with technology
once this downturn's over. KANGAS: You have a couple
of issue-specific, I know you deal mostly in mutual funds
and you like high tech funds now. But how about a
couple of individual stocks you like particularly.
COCHRANE: Well, what I would do is, for example,
@home, Excite@home is a great stock. Vodafone
(NYSE:VOD) is a stock that I would buy. Compaq
(NYSE:CPQ)I love.
It hasn't gone anywhere but it's been on a major
consolidation. Dell (NASDAQ:DELL) is a great company,
Microsoft (NASDAQ:MSFT), Cisco (NASDAQ:CSCO).
And again, buy them on weakness. However, I wouldn't
buy them at these levels. KANGAS: OK, when you were
last with us as the market monitor on the first of April you
liked Haliburton Schlumberge Global Marine Smith
International and those stocks, indeed, have moved up
well above those levels, some 35, 40 percent. Are you
taking money off the table? COCHRANE: Yes, I would, I
would sell on the strength. Again, look at the price of oil.
That, I don't think, is going to be exceeded much more.
KANGAS: OK. And it was one of the few groups, oil
service groups, that was down in today's market. So
maybe they knew you were going to say that. Anyway,
you also recommended that Japan OTC Equity Fund, it
was below 8 and it's now 12. It's up 50 percent. Will you
take some profits there? COCHRANE: That market has
just started to move. KANGAS: OK. COCHRANE: A low
of 10,000, right around 18. It's going a lot higher. Hold
onto that. KANGAS: And you like two of the weak stocks
in the Dow, Kodak (NYSE:EK) and Philip Morris
(NYSE:MO). They're both well down although you
recommended Kodak at 63. It's about 60 now and not
bad. But do we get rid of it? COCHRANE: It had a good
run. Sell on a strength there. That's what I would do.
KANGAS: And Rite Aid (NYSE:RAD). You said don't buy
it, but if it gets down really cheap, and it went to 4 1/2,
now 8, what do you do? Are you still with it?
COCHRANE: It's basically become an option now that
hasn't expired. I don't think the company is going to
expire. Yes, I would buy it selectively here. That's
obviously a high risk. KANGAS: OK. We have a market
monitor question tonight from viewer Dom Adrade of
Ambler, Pennsylvania. "Given the near term parity
between the Euro and the dollar, is this a good time to
buy stocks of European companies?" Interesting
question. COCHRANE: Yes, I would. I think, again, on
any weakness that we have in the market, I would do it.
My proxy would be using the European mutual funds or
closed-end funds, one or the other. KANGAS: In what
area? COCHRANE: Technology, primarily. KANGAS:
High tech? COCHRANE: Yeah. KANGAS: You're a
high-tech man all the way down the line. COCHRANE: I
think the NASDAQ has a lot further to go on the upside
after this little correction is over. KANGAS: OK. Very
good, Frank. Thanks so much for being with us again.
Great to see you. COCHRANE: Great to see you, Paul.
Thank you. KANGAS: My guest, Frank Cochrane,
president of Investment Timing Consultants. Nightly
Business Report transcripts are available on-line
post-broadcast. The program is transcribed by FDCH.
Updates may be posted at a later date. The views of our
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Business Report is not and should not be considered as
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