"Street Critique"-Gene Marcial, "Inside Wall Street" Columnist at "BusinessWeek"
Wednesday, May 28, 2008PAUL KANGAS: Tonight's "Street Critique" guest is Gene Marcial. He's the "Inside Wall Street" columnist at "BusinessWeek" and author of "Gene Marcial's Seven Commandments of Stock Investing." Gene, welcome to NIGHTLY BUSINESS REPORT.
GENE MARCIAL, "INSIDE WALL STREET" COLUMNIST, BUSINESSWEEK: Thank you very much, Paul.
KANGAS: I know from reading your column over the years Gene that you often take a contrarian view of the markets. Tell me more about your investing philosophy.
MARCIAL: That's right. Main thing to do is don't follow the crowd. Go against the crowd and you'll be OK.
KANGAS: OK. Can you give our viewers a crash course of your seven commandments? Let's start with the first, buy panic, what do you mean by that?
MARCIAL: Well, panic can be a problem for investors, but it could be your friend. Don't panic is the real situation. Buy when everybody else is panicking.
KANGAS: Then you say, concentrate, don't diversify. That's a little different.
MARCIAL: Yes. Diversification is for the mutual funds and big institutions. For individual investors, they should just concentrate on a few stocks and don't follow.
KANGAS: And then you say buy the losers. That seems a little strange.
MARCIAL: I mean by this not the losers but fallen angels. When these angels fall, pick them up because they are real winners.
KANGAS: OK and then, forget timing, I thought timing was everything.
MARCIAL: Not in the stock market. If your timing is off you, lose your shirt.
KANGAS: OK. Then you say, follow the insider, do you mean insider trading here?
MARCIAL: No, no. The insiders meaning executives, corporate CEOs, they have all the information about their company so follow what they're doing.
KANGAS: Then you say, don't fear the unknown.
MARCIAL: That's right. Like foreign markets, they're full of opportunities. You study these unknowns and you'll find a lot of gems.
KANGAS: And your seventh commandment is, always invest for the long term.
MARCIAL: That's the best strategy. You should always -- don't flip stocks. Don't trade if you're not the real trader. Just stick with what you know.
KANGAS: Very interesting. With those seven rules in mind, can you give our viewers one or two names that meet your criteria?
MARCIAL: Yes. One of them would be Apple. You know, Apple has proven itself to be a very innovative company.
KANGAS: AAPL on the NASDAQ, right?
MARCIAL: AAPL, yes. It's a real growth company. And Steve Jobs, the CEO, has proven that they can come up with simple but innovative and sophisticated devices like the iPhone.
KANGAS: We have time for a second selection.
MARCIAL: Yes. I just wrote about Yahoo! today at "BusinessWeek" because, according to my sources who are very familiar with what's going on between Yahoo! and Microsoft, they say that a deal is imminent. The most likely scenario is, Microsoft will end up buying Yahoo!
KANGAS: Right, the symbol is YHOO on the NASDAQ, correct?
MARCIAL: That's right and according to people in the know, including the big stakeholders of Yahoo!, they have exerted their power on Yahoo! to convince them to do a deal. And that's very likely to happen very soon.
KANGAS: Likely to happen mostly with Microsoft, right? Not Google.
MARCIAL: Microsoft is -- the deal with Microsoft would be the most likely outcome. But Google, Google is in the wing.
KANGAS: Gene do you own these stocks personally or have any other discloses to make?
MARCIAL: No, I don't own any stock except McGraw Hill.
KANGAS: Because of the nature of your work.
MARCIAL: No conflicts of interest.
KANGAS: I want to thank you for being with us.
MARCIAL: Thank you very much, Paul.
KANGAS: My guest, Gene Marcial of "BusinessWeek" and author of "Gene Marcial's Seven Commandments of Stock Investing."
