Transcript from interview with Green on NBR tonite.
Market Monitor: Peter Greeen-"Green On Money Mkt.
Letter"
JEFF YASTINE: Our guest market monitor this week is Peter Green, editor of
the Green on Money Market Letter, based in Cinnaminson, New Jersey, and he
joins us from our New York studios. Peter thanks for joining us.
PETER GREEN, EDITOR OF THE GREEN ON MONEY MARKET
LETTER: My pleasure.
YASTINE: When you were last with us in July last year, you said that the Dow
you thought would get to about 9200, of course and it's only just approached the
8000 -- got a little over the 8000 mark, and has had trouble staying above that
level. What do you think now, where is the Dow headed?
GREEN: I think it'll test the new highs around 8200 and then go down. I think this
Asian problem is really going to be the story in the first quarter. It's very, very,
problems- problems abound over there. The currency, they've just rolled over the
Korean bank loans. But that means now that they're going to go through the loan
portfolios and a lot of companies are going to have loans called. And it's just
going to be all kinds of problems. Unemployment into buildings, a real mess.
YASTINE: We've already seen, in regards to the U.S. markets, a lot of pre-
announcements of earnings warnings. You don't think that the U.S. market has
already pretty much discounted a lot of the bad news that's expected out of Asia
in the coming months?
GREEN: No, because I don't think anybody knows how much bad news is
coming out in Asia. I think they'll keep containing it in Korea right now because
you could have a worldwide sell off, a panic, in the stock markets around the
world if two or three or four countries went down at the same time. So if they
can stagger them, it's better for everybody.
YASTINE: Now as far as the U.S. domestic economy, we have the Purchasing
Managers Index Report out today that showed inflation remains low. You're still
fairly bullish at least as far as the U.S. economy goes?
GREEN: Yes, I think for stocks that aren't involved in exporting to Asia, they've
got a good chance of doing quite well. It's going to be a stock pickers market.
YASTINE: Well when you were last with us, you mentioned four stocks. Lucent
Technologies (NYSE:LU), you recommended it at 78. It's at 79, a little over 79
now. Sunbeam (NYSE:SOC) was about 38 then, it's 41 1/2 now. LSI Logic
(NYSE:LSI) was about 35 then, 21 1/2 now. And 3Com (NASDAQ:COMS) 54
then, 36 now. What do we do with those?
GREEN: Well Sunbeam's been up to 50 and pulled back. 3Com we did very well
on, I made about 70 percent. We bought it in November at 49 and sold it at 48,
which turned out to be a pretty good move because it's down around 34. I think
the tech stocks. This is an industry with built in obsolescence. And it's, it's since
July that some of these stocks haven't done very well. And probably after the
first quarter, they'll start moving up again. In fact, they may start before that
because there's been a lot of tax selling.
YASTINE: Which of these technology stocks do you like at this point?
GREEN: I like Ascend Communications (NASDAQ:ASND). That's my favorite.
YASTINE: And why is that?
GREEN: Well they've just come out. First of all they were offered $35 by Lucent
Technology recently. They turned it down and said that they wanted $40. And
now Northern Telecom (NYSE:NT) is involved too I'm told in the bidding. So that
here's this company that's being offered $35 and is asking for $40. Note that it
closed today about 25 7/8 I believe.
YASTINE: Why do you think the market just hasn't reacted, that sort of buy out
offer?
GREEN: Well I think because there has been tax selling.
YASTINE: And also, any other stocks that you like here?
GREEN: Yes, I like Cliffs Drilling (NYSE:CDG). I like LSI Logic in the
technology area. And Seagate (NYSE:SEG) and Silicon Graphics (NYSE:SGI)
could turn around. But you want to wait for them to move. You've got to wait for
them to move. Don't jump in tomorrow. Wait til they move. I know you get
bored.
YASTINE: Now when do you, when do you wait for a stock like Cliffs Drilling to
move? It ...
GREEN: Well that started to move. That's come down from 80 to about 43 or 44.
Now it's moving up. That's one that's starting to move right now.
YASTINE: I got you. Also back about in 1996 rather, you liked gold. Do you like
gold at all now? Or do you stay out of it? Or do you get back in?
GREEN: No, I don't, I said to you the last time that I've given up on gold. It's
addictive, it was that or the Betty Ford Clinic and I haven't changed my mind.
YASTINE: A bonds at this point?
GREEN: Well bonds they may go down a little bit. But I don't like them that
much. I've been neutral on them.
YASTINE: All right. We will end it there then. Peter, thank you very much.
GREEN: Thank you.
YASTINE: That's Peter Green, editor of the "Green On Money Market Letter."
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