Joe 'The Bull' Battipaglia says 'BULL' - [ moshimoshi Paul]
ohayougozaimasu Paul-san
As promised here is the latest from Joe Battipaglia of Gruntal & co.
konichiha!
Source:NBR Aug.25,98
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The Bullish Outlook From Joe Battipaglia
SUSIE GHARIB: Well, the mood on Wall Street is still nervous, even though the Dow's back up over the 8600 mark. But our guest this evening is unwavering in his bullish outlook for stocks and is looking for a huge rally ahead. Joining me now is Joe Battipaglia. He is chief investment strategist at Gruntal and Company. Hi, Joe. Nice to have you.
JOSEPH BATTIPAGLIA, CHIEF INVESTMENT STRATEGIST, GRUNTAL & CO: Do I look nervous to you?
GHARIB: No, you don't look nervous at all and you never look nervous. And you're talking about a huge rally.
BATTIPAGLIA: Right.
GHARIB: Why and how soon?
BATTIPAGLIA: Well, basically to have a bear market you need a recession or a credit crisis in the United States. Neither condition exists. What's going on in Asia is a banking crisis localized to Asia. Most of the damage has already been done. So I see positives coming, not negatives, and if you're looking for a correction, it's already occurred with some of the Dow stocks down 10 percent, but the NASDAQ down 25 or 30 percent. And I think the big rally's going to be from the small to the big this time around.
GHARIB: What about Russia? That's been a big worry the last couple of days.
BATTIPAGLIA: Since when has Russia taken center stage financially? The country's just trying to find its way out of a command economy to an economic model like our own. They need help in doing it. The Germans and the United States will work together to support that effort so that they will not default on a short-term basis. The dollar is the substitute currency in the black market there, so I wouldn't put too much particular importance on what's happening in Russia right now.
GHARIB: All right, but when we talked to a lot of the strategists who are bear market oriented, whether you're talking to technicians or whether you're talking to fundamental people. They're pointing to advance decline line deterioration, deterioration in a lot of these large cap stocks, talk about a global recession. And they're saying that this whole Asia thing, the worst isn't over yet. How do you argue against that and still be so positive?
BATTIPAGLIA: Well, there are two separate answers to this and that is the technicals always look bad before the next leg up. We saw that in '96 when we had the correction based upon fears about the economy. We saw it in '97 when we were worried about irrational exuberance. Well now we're worried about Asia. The second part of that is, can we get a recession from what's going on overseas? I look at it from the other perspective. So long as the world's largest economy, and then the one that's second to it-Europe, continue to grow the way they've been growing, and the evidence supports growth, the rest of the world benefits from that. Meanwhile, the trouble in those foreign markets allows those products that are produced there to be bought more cheaply here. Pushes commodity prices down, which is a positive wealth effect on the industrialized world.
GHARIB: All right. I see your point. You make a very convincing argument. We do not see a wave of buying going on, on Wall Street. At least the last couple of days. And you're saying that there's going to be a rally ahead. How soon are we going to see that? And what kind of targets are you seeing on the Dow?
BATTIPAGLIA: Well, we've seen a wave of buying. And that was interrupted, unfortunately, last week. We had very good strength going into mid-week, and then the president on Thursday did what he had to do relative to terrorism. Where the Lewinsky matter comes into this is how people look at the president and what he does when he has to act presidentially. He's doing the right things, but he's got this baggage going along with it. I say on that issue that let's wait till the report comes to Congress from Kenneth Starr. Then we can deal with facts. The market is not going to deal with rumor. They must deal with facts.
So for all intents and purposes, we are going to get that rally going. And we've seen the beginnings of it in the last two weeks.
GHARIB: All right. We just have 30 seconds left, and I just want to alert our viewers that you are saying your allocations for growth-oriented investors, 95 percent ...
BATTIPAGLIA: Well, let's make it 100, ...
GHARIB: ... in stocks.
BATTIPAGLIA: ... amongst friends.
GHARIB: 100 percent in stocks.
BATTIPAGLIA: Right.
GHARIB: What are you buying? What do you like right now?
BATTIPAGLIA: Want to be in the financials. Technology. Transportations. I love the pharmaceutical sector. The growth part of the consumer. And we're so big on the small stocks that we put out a report highlighting 16 special situations for the future.
GHARIB: Just name one or two stocks, quickly. We have just a few seconds left.
BATTIPAGLIA: Throw out IBM (NYSE:IBM), Texas Instruments (NYSE:TXN), Union Pacific (NYSE:UNP), Boeing. How's that.
GHARIB: OK. That's enough to get us started.
BATTIPAGLIA: OK.
GHARIB: Thank you very much. Always a pleasure. Joe Battipaglia. We have been speaking with him from Gruntal & Company.
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