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To: advocatedevil who wrote (1319)	7/20/2002 5:11:35 PM
From: Return to Sender	Read Replies (2) \| Respond to of 13403

Bear on BusinessWeek; Time to Buy Stocks? By Haitham Haddadin biz.yahoo.com NEW YORK (Reuters) - There's a Big Bad Bear on the cover of the latest BusinessWeek magazine, which some on Wall Street believe is a sign to buy stocks. The idea may sound irrelevant as the market plumbs new depths by the day. But contrarian pundits, judging by a so-called "Magazine Cover Indicator," argue the time is nearing for the fast-sinking stock market to reach bottom as shares fall to their lowest level in five years. ADVERTISEMENT That's because BusinessWeek in 1979 ran a now-legendary cover with the title, "The Death of Equities," lamenting the sorry state on Wall Street after a decade of declining stock prices, including the severe 1973-74 bear market. That cover preceded the start of Wall Street's longest running bull market that began in 1982. The cover of BusinessWeek's July 29 issue, which some subscribers received on Friday, features a ferocious grizzly and the McGraw-Hill Cos. (NYSE:MHP - News) magazine describes Wall Street's woes. When more mainstream publications catch wind of the ill times on Wall Street, it would probably be a good time to jump into the market with both feet, argue the pundits. "I just opened my copy of BusinessWeek, THE ANGRY MARKET," said Alan Ackerman, strategist at Fahnestock & Co, reading aloud the capitalized words superimposed on the grizzly's picture. "There appear to be more bears on Wall Street than in Yellowstone Park." "The frequency of magazine covers featuring bears may in fact signal nearing the bottom of this downdraft market," he said. "Many use magazine covers as a contrarian index." DEATH OF EQUITIES The 1979 BusinessWeek magazine cover preceded the greatest bull market in the history of financial markets, as the blue-chip Dow Jones industrial average (CBOT:^DJI - News) went from below 1,000 points then to a high above 11,722 by January 2000, before the implosion of the equities bubble in the last two years. This time, the cover came as the Dow lost 7.8 percent for the week, finishing at 8,019. "From a contrarian perspective, this is a positive sign because popular media often simply reflect the current mood of the consensus," Banc of America Securities' strategist Tom McManus told clients in a note. "Look closely to see if you can find a bear pictured on the cover of a 'mainstream media' magazine like Time or Newsweek .. that would be even more significant," he wrote. McManus told Reuters, "If there's a bear on the cover of People, buy with both hands." The BusinessWeek editors are aware of how famous their cover has become but said they saw little link between a bear on the cover and a market rebound. "There's not much question that we are in a grizzly bear market, but we did not have this cover to signal a rebound," Mark Morrison, BusinessWeek's managing director, told Reuters. "There are always people on Wall Street that use magazine covers as big contrarian indicators, but I don't think they work that way." The current bear market, which began after stocks hit a high in March 200O, has been the most severe in a generation. The news of the equities rout has indeed moved in recent weeks to the front page of major newspapers. "The public has lost faith in market, but I'm getting more bullish," Will Muggia, manager of the Touchstone Emerging Growth Fund, said. "There have been 7 weeks in a row of equity mutual fund redemptions, which is a sign of capitulation selling. Historically, massive redemptions have been a contrarian signal." McManus pointed to another contrarian gauge. According to Investor's Intelligence, bearish investment newsletter writers now outnumber the bulls for the first time since September. Fahnestock's Ackerman, a veteran of several bear markets, pointed to the content of media publications as another indicator of a looming bottom for stocks. "There was a story in the Wall Street Journal about individual investors learning how to short the market," said Ackerman, referring to the practice of selling borrowed shares in the hopes of pocketing a profit by buying them later at a lower price. "Individual investors account for only 2 percent of all short positions, so this may be a sign that we are getting near the end," Ackerman told Reuters. --Additional reporting by Brendan Intindola, Chelsea Emery. Long term plays I am considering? I'm working on that now AD. What I have done now is added your selections to my own as potential long term stocks. I think we want to stay away from anything defense oriented because they have already had their run. In fact LMT fell virtually all week long proving it was a good short. It's a rare opportunity that we are presented with now. Although I do not believe we have been hit by actual capitulation I do believe it is near. What I want to do is look at both individual stocks and the most highly profiled index they are associated with to make the best possible selections.

To: advocatedevil who wrote (1319)	7/20/2002 5:48:36 PM
From: Return to Sender	Read Replies (2) \| Respond to of 13403

Take a look at ED. I think this may be one of the better utility stocks. A 6% dividend and a good chance for capital appreciation longer term. biz.yahoo.com Generally speaking, the stocks of companies with steady earnings and dividends tend to be less volatile than their fancy high-tech counterparts. Boring old utilities may be the quintessential safeties, since they rarely miss their earnings targets and thus rarely get pummeled. And here's something to chew on: According to research headed up by Merrill Lynch chief U.S. strategist Richard Bernstein, the S&P Utilities Index has actually outperformed the Nasdaq since its inception in 1971. That's right: The tortoise is beating the hare, just as Aesop said. "One might question whether it was rational for investors to flock to the Nasdaq and that market's volatility when they could have received similar returns from utility stocks and slept better at night!" Bernstein wrote Tuesday. With this in mind (and with the Nasdaq some 68% off its all-time high), we thought it would be a good idea to use our stock screening tool to search for low-risk safety stocks. But first we needed to come up with the best way to measure risk. Money managers often use a gauge called beta, a coefficient expressing how much a stock has moved in relation to a benchmark — usually the Standard & Poor's 500 — in the past. While this measure is certainly useful, it's based on historical performance, and thus might have little bearing on the future. Past is merely prologue, after all. biz.yahoo.com RtS