While we're at it, SUNW also got a mention from the Nightly Business Report Market Monitor as follows. Don't worry, I pasted this in from an e-mailed wire story.
--QS
PAUL KANGAS: My guest market monitor this week is Frank Cochrane, the President of Investment Timing Consultants, an investment advisory firm based in Farmington Hills, Michigan. Good to see you again, Frank.
FRANK COCHRANE, PRESIDENT, INVESTMENT TIMING CONSULTANTS: Great to be here, Paul. Thank you.
KANGAS: The market looked a little healthier this week than it has been. Do you think we've seen the worst? Are we through the bottom?
COCHRANE: Well, I don't know if we're through the bottom. I would say on this move we had a retest on the NASDAQ, the NASDAQ Comp 100 on Wednesday. I think that that was successful and we've got to move higher and go above 3,800, 4,000 and so on and we'll see if we can do that.
KANGAS: And good news, a slowing down in the economy as far as retail sales were concerned in April and today's Producer Price Index down 3/10. Inflation fears being alleviated a little bit, would you say?
COCHRANE: Well, they're abating somewhat. Tuesday's numbers will obviously tell the picture on the CPI. However, I think that as we go out over the course of the next 60 days the numbers will show a slowing in the economy and this will cause the Fed to, I guess, stop doing the rate rises.
KANGAS: What are they going to do next week, do you think, a half point or quarter point?
COCHRANE: They might confuse everybody and go 3/8 of a point.
KANGAS: How about that?
COCHRANE: That would be different. I would say half point is in the cards and certainly Fed funds futures look that way.
KANGAS: Well, you really have done a turnabout from your last visit with a market monitor appearance on December 3rd last year. The Dow was 11,300 and you were extremely bearish. You said don't touch high tech. But when the market comes down you would be all high tech. You missed the big crunch down in March and April.
COCHRANE: Well, we certainly missed part of it, not all of it.
KANGAS: All right, well, the stocks you said were on your shopping list last December were @home (NASDAQ:ATHM), Vodafone (NYSE:VOD), Compaq (NYSE:CPQ), Dell Computer (NASDAQ:DELL), Microsoft (NASDAQ:MSFT) and Cisco (NASDAQ:CSCO) and the only one that's higher than it was then is Cisco. Are those still on your shopping list or have you bought them already?
COCHRANE: Yes. No, we would have bought them already. The way, as you know, that we participate in the market, our clients do, is through mutual funds.
KANGAS: Right.
COCHRANE: So we are right now completing invested in high tech funds as we think that over the course of the next six to 12 months we think that part of the market will perform, outperform the S&P, the Dow and most other averages.
KANGAS: So now you've turned very bullish?
COCHRANE: Yes.
KANGAS: Asset allocation 100 percent in stocks with the emphasis on technology?
COCHRANE: Yes. There's been such a huge change in the sentiment. Now you can't give stock away almost.
KANGAS: Right.
COCHRANE: I mean just go with the quality stocks, the ones that have earnings, the Sun Microsystems (NASDAQ:SUNW). Microsoft (NASDAQ:MSFT) here, I think, is a steal. I mean yes, it may take some time to work its way out, but this stock breakup value is probably $135 a share. Applied Materials (NASDAQ:AMAT), Intel (NASDAQ:INTC), there is, there's a plethora of stocks out there that one can buy and I think hold and do very well under this market.
KANGAS: If you think interest rates are topping out, wouldn't the utility sector be attractive? After all, the Dow Utility Index came very close just yesterday to making a record high.
COCHRANE: And I think that that's telling us the future direction of interest rates which are either stabilized to going lower as we go into the latter part of this year. Again, the Fed will do their thing over the course of the next couple of months, maybe as much as 100 basis points including this next move. However, we're closer to the end of rate rises than the beginning. The market will get wind of that, gain strength on that, and we should have a barn burner end of the year.
KANGAS: And you're still very much enamored of high tech stocks?
COCHRANE: Yes, I am because that's where the profits are, that's where the revenues are, that's where the growth is and we've just begun the growth phase.
KANGAS: Anything outside of that, maybe a little stock here or a little stock there just for some variety?
COCHRANE: Well, not a little stock, but I would love General Electric (NYSE:GE), General Motors (NYSE:GM). How about Unum Provident (NYSE:UND), a disability insurance company?
KANGAS: A big insurance company.
COCHRANE: That stock was at $60. It's now at $18. The book value on it is around $22 a share. They make a lot of money and that stock should do well. So a special situation I would say, that one.
KANGAS: You like some of the fallen angels.
COCHRANE: All of the fallen angels and at this stage of the game most of the stocks out there are, you know, fit that bill.
KANGAS: But high tech is where it's going to be.
COCHRANE: Absolutely, yes, Paul.
KANGAS: And your favorite in that area? I know you do it through mutual funds, but the standout stock?
COCHRANE: I would say Applied Materials or Cisco, one of those two stocks.
KANGAS: Despite that very negative "Baron's" article last week?
COCHRANE: Yes, but they've been bearish on a lot of things for some time now so...
KANGAS: There we go. Very bullish in the high techs, Frank, a real turnabout, and I hope you're as right this time as you were last time.
COCHRANE: Thank you, Paul.
KANGAS: My guest, Frank Cochrane, President of Investment Timing Consultants. |
