"Street Critique"-Hilary Kramer, Market Strategist & Author of "Ahead of the Curve"
Wednesday, January 23, 2008PAUL KANGAS: We have seen a massive tech wreck over the last couple of weeks. Tonight's "Street Critique" guest says the selling has been particularly brutal for technology firms, with the NASDAQ down 12.7 percent since the start of the year. She's Hilary Kramer, market strategist and author of "Ahead of the Curve" and Hilary, welcome to NBR.
HILARY KRAMER, AUTHOR, "AHEAD OF THE CURVE": Thank you, Paul.
KANGAS: The late afternoon turn around today the $64 million question is have we seen a bottom?
KRAMER: Yes, Paul. I believe we have seen the bottom and we are going to now see a bull come back into Wall Street. We have formed a bottom and the reason we know that is that we finally had real buyers come in today. But we know it even more so because of what I saw this morning and yesterday, which is real fear. Fear took over and it over powered greed. Greed for so long was fueling the market, including as it was going down people buying into it.
KANGAS: Huh-uh.
KRAMER: But once that pessimism, a rational pessimism took over and the last of us capitulated because that's what Wall Street waits for. They wait for the very very last person who's holding onto their stock to give up and to sell and that's when the Street turns around and surprises you.
KANGAS: OK so a bottom we have seen. We might test it a couple of times, wouldn't you agree?
KRAMER: Absolutely. We may be testing and we'll be testing certain sectors.
KANGAS: Will the current state of the economy support stock prices at this level?
KRAMER: I believe that it will, because what's happened is that the stock market has been going down, assuming that there will be a recession, there will be maybe inflation that matches that. But we have already been in that situation. So, well the stock market is run by earnings, so that's what determines stock prices.
KANGAS: OK.
KRAMER: So we should see second or third quarter earnings come back up and that will even help stocks go higher.
KANGAS: Where do you see value among the tech group?
KRAMER: That's a great question, Paul. What I have been looking at are the solar technology companies. In particular there's a company called Sunpower. The ticker symbol is SPWR and it is off 50 percent from its high which was only a few weeks ago. Now Sunpower is reporting before the bell tomorrow and we could see Sunpower have some great guidance. If they say that there's a lot of demand out there for their solar modules and if that's the case, the whole solar sector may rise.
KANGAS: What else shines in your mind?
KRAMER: OK another solar stock, a different one called First Solar (FSLR) and it's a different technology, thin film technology, very efficient form of solar. And First Solar is also off 45 percent since December. It's unbelievable what has happened to these stocks because of momentum buyers became momentum sellers and shorters. So if Sunpower goes up, we will see First Solar go up.
KANGAS: Very briefly one more. We have less than a minute.
KRAMER: I would like to talk about Apple (AAPL). This is very important, because as we know, Apple was $202 just recently and it closed today at $139 and it tested $126. I may go back into Apple. But what happened there is Steve Jobs is very conservative in giving guidance. But the key is, they are going to make inroads into the PCs because they can convert iPod users into desk top users and lap top users.
KANGAS: OK. Hilary, do you own any of the stocks mentioned?
KRAMER: Yes, I own First Solar and Sunpower. I do intend to buy tomorrow morning if the earnings come out strong.
KANGAS: Thanks for being with us once again. We'll see you soon.
KRAMER: Thank you, Paul.
KANGAS: My guest Hilary Kramer, author of "Ahead of the Curve."
