"Street Critique"-Hilary Kramer, Market Strategist & Author of Ahead of the Curve."
Wednesday, November 21, 2007PAUL KANGAS: My "street critique" guest tonight says when it comes to this volatile and nasty down market, something's got to give, sooner rather than later. She's Hilary Kramer, market strategist and author of Ahead of the Curve." Hilary, welcome back to NIGHTLY BUSINESS REPORT. Great to see you.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you, Paul.
KANGAS: Just about everyone I talk to is disgusted with this market. It has really been ugly. What are you seeing here?
KRAMER: Oh, this market is tricky. It's nasty and it's pretty evil. There's no one on Wall Street who is in the equity markets who is sleeping these days. I mean certainly It has been that case in the fixed income market but it has really, really taken down. The smartest money has been fooled.
KANGAS: OK. So what do we do in this scenario? Is it time to buy yet or just wait for it to bottom out and pay a little more?
KRAMER: See, I believe that we're bottoming out right now. We're right there. And this is the turning point. It's the turning point when everyone says it's absolutely the ugliest. It can't come back. There are all these economic pressures -- the markets, the dollar, the price of oil. But then we will see it turn around because the U.S. economy is resilient, is strong and is one of the best in the world.
KANGAS: So you see a year-end rally on its way, correct?
KRAMER: Absolutely. And the other reason, really, Paul, is that the Fed isn't going to let us have a bad Christmas. The Federal Reserve will make sure that we're all at least somewhat happier, that we end on a good note and that would mean a rate cut.
KANGAS: All right. Hilary, you brought some stock picks along for our viewers, and your first one is from the financials, which are highly depressed. Do you think that sector is ready for the bottom fishing now?
KRAMER: OK, let me tell what you it's about. To me it's Goldman Sachs, GS. That's the stock that's going to race up ahead if the rates are cut by the Fed. Plus Goldman Sachs has the best (INAUDIBLE) right. They got the best traders, the best analysts, the best bankers on Wall Street. So Goldman Sachs at $209, it's good for at least 20 points if there's a rate cut or the market turns around because everyone is going to race into Goldman.
KANGAS: Another selection.
KRAMER: Apple Computer, Apple. Apple is absolutely positioned beautifully because it's going to be the present of choice for Christmas this year, the iPods, the iPhones. We are going to see Apple come back and go up to $200 range.
KANGAS: Good old AAPL. That's the symbol and it's at the top of the active list quite regularly. Also, I understand you've got one that is linked to a cut in interest rates. Tell us about that.
KRAMER: That's right, Jacobs Engineering, JEC. Again, I got for best of breed. Of all the infrastructure companies, these are the companies, engineering, construction, they're out there building the bridges, building schools with government contracts and Jacobs Engineering has the best backlog. They have the most amazing management team and JEC is positioned to really rise. They're all depressed right now because when rate cuts come in, that means that you can have these contracts come through.
KANGAS: Quickly now, one last pick, small cap.
KRAMER: Yeah this is a small cap. VYYO (VYYO), under $5 is absolutely a buy. These small caps have been cut in half. This is a company that helps cable companies and telecom companies improve and expand broadband and again, it's just been thrown in the garbage and companies like VYYO are positioned to enter 2008 to just come racing back ahead, especially the ones that have good technology.
KANGAS: Hilary, do you own or are you in short position in any of the stocks?
KRAMER: I am long on Goldman Sachs and Jacobs Engineers, JEC.
KANGAS: Hilary, great to see you again. We'll see you once more, December 12. Happy Thanksgiving.
KRAMER: To you too and thank you, Paul.
KANGAS: My guest, Hilary Kramer, author of "Ahead of the Curve."
