"Street Critique"-Hilary Kramer, Personal Finance Editor at AOL
Wednesday, September 19, 2007PAUL KANGAS: Tonight's "Street Critique" guest says don't fight the Fed. Instead, make money on the upswing. She's Hilary Kramer, personal finance editor at AOL and author of new book entitled "Ahead of the Curve" and Hilary, welcome back to NBR.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you Paul.
KANGAS: What did you make of yesterday's Fed action and more importantly, does it change your investment strategy?
KRAMER: It sure does. A Fed rate cut, that is fuel for the stock market to go up long term, but we still have excesses in the market but we have a stock market that is moving. It's moving into these high growth stocks and you want to respect that action.
KANGAS: So in a recent visit you said cash was king and that's all changed now.
KRAMER: Yes, it's changed and it's changed for the short term. That's really that you have to watch the movement of the market. Don't fight the Fed, don't fight the tape, again, respect the market. And right now the market is going to go up and money's moving in. Now it's not moving into the money centers and financials which it usually does Paul. It's moving into high growth stocks.
KANGAS: So you favor buying into the strength on this Fed upswing, but can't that be a little tricky for smaller investors? How do they know when to get out?
KRAMER: It's very -- it's very dangerous and it's really something that you just want to dabble in or you have to understand you're taking a risk with these stocks because they're not stocks that are holding your portfolio for the long term. There are stocks that you have to be careful, to set a price target and get out and not be greedy.
KANGAS: You brought some examples of stocks you think will participate in this upswing. Let's go to your first pick.
KRAMER: OK, Baidu, BIDU, this is a $275 stock. It's a Chinese company, the Internet search engine company of China, 177 percent profit and earnings have grown and I'm telling you this is a company that is going to go to 300. There's all sorts of institutions going in there.
KANGAS: And it is a big cap growth issue.
KRAMER: That's absolutely right. They all are.
KANGAS: Now your next stock is also a play on China.
KRAMER: China Medical, you can't go wrong with this one because it's two growth areas. You have the growth area of biotech combined with China, a company that is branching out, growing with earnings and China Medical (CMED). We're going to see that one continue to go up at $41. I have a target of $50 there.
KANGAS: OK, another choice is First Solar, right?
KRAMER: Yes, First Solar, (FSLR). I own First Solar, I've bought into First Solar at $100. This is a stock, Paul, where four firms on Wall Street in the last week have come out with price targets, Goldman Sachs, $125, Bank of America, $140. And you got real money, it's real volume, not just short covering that's going into First Solar.
KANGAS: We just have a minute left. Everyone knows your final pick let's have a look at it on the chart, Google (GOOG).
KRAMER: Google. OK, Google at $545. This is stock that stalled out a little bit with earnings in the last earnings report. But now again, big institutional money, Wall Street's behind it. Everyone is looking to put money to work and to see their stocks up on September 30th so Google is finally going to go up there and hit $600.
KANGAS: All momentum plays, correct?
KRAMER: All of them. You want to make sure you get out.
KANGAS: OK, Hilary, do you own any of the stocks you've mentioned or other disclosures to make?
KRAMER: Yes. First Solar and Google.
KANGAS: Great see you again and congratulations on your new book.
KRAMER: Thank you Paul.
KANGAS: My guest, Hilary Kramer, personal finance editor of AOL and author of "Ahead of the Curve."
