"Market Monitor"- Robert Morrow, Editor of the Institutional Advisory Service
Friday, July 18, 2008PAUL KANGAS: My guest market monitor this week is Robert Morrow, editor of the Institutional Advisory Service and publisher of the monthly market letter, "The High Tech Growth Forecaster." Bob welcome back to NIGHTLY BUSINESS REPORT.
ROBERT MORROW, EDITOR, INSTITUTIONAL ADVISORY SERVICE: Thank you very much, Paul.
KANGAS: Let's cut to the chase. Has the stock market finally put in a really good longer-term bottom?
MORROW: I think we're at the beginning of a bull market.
KANGAS: What convinces you?
MORROW: The main element is that my forecast in 2007 was for a 19 percent correction just short of a bear market. We had 18.7 earlier in the year. Then it went down 22 percent. I think that's it.
KANGAS: That's it. Is this the time to start bottom fishing in the beaten down financial stocks?
MORROW: I think so.
KANGAS: You would move in there. We'll see if you have any choices later. What market sectors would you avoid here Bob?
MORROW: I think the ones I would avoid would be consumer discretionary. I think I would avoid perhaps utilities. That would be the principle one.
KANGAS: OK. You're expecting interest rates to go higher?
MORROW: Exactly.
KANGAS: OK and consumer staples or discretionary, why don't you like that?
MORROW: They depend on spending. I think that's at a low ebb right now. Eventually these sectors will rotate and that will come back into favor I'm sure.
KANGAS: On your last visit with us over two years ago, far too long, you did give our viewers four recommendations to buy. Let's see how they've done since then. Look at, that Energy Select (XLE) up 55.3 percent. Utilities (XLU), which you don't like right now, but they've done well, up 19.4 percent. You had two other recommendations, I think you had the Gold Trust (GLD), look at that, up nearly double there. And Consumer Staples (XLP), which you don't like now, but you did then, and they've done well. I think all of this says one thing, the beauty of long-term Investing is excellent.
MORROW: I think some.
KANGAS: How about some new recommendations for our viewers, Bob?
MORROW: The first recommendation I have is for the Financial Sector, the (XLF). I think it's time to buy it. It may be bottom fishing, but I think it's at the bottom.
KANGAS: So these are going to come back?
MORROW: I think so.
KANGAS: This is a diversified way to hold them in.
MORROW: You're holding 40 stocks. You're not dependent on any way.
KANGAS: OK. Number two chase?
MORROW: The Technology Sector, (XLK). There you get a broad exposure to many technology stocks.
KANGAS: And you know about technology. You are an electrical engineer and have about 38 patents I understand.
MORROW: That's correct.
KANGAS: How about a third choice?
MORROW: Broadcom, (BRCM).
KANGAS: Individual common stock.
MORROW: Right, BRCM would be Broadcom. They're in semiconductors, and this will march ahead with any response in the technology sector.
KANGAS: Now let's get to Intel. They had good earnings out recently.
MORROW: Yes, they did. I liked them even before that came out. INTC, I think they'll participate in the technology rally.
KANGAS: Any more about Intel? I know a lot of people follow it?
MORROW: They're so diversified in so many areas of technology, you can hardly look at anything, computers, they're very predominant.
KANGAS: OK. Let's have another choice.
MORROW: The National Semiconductor would be my next choice, (NSM).
KANGAS: OK. Why do you like that particular issue?
MORROW: Again, I think Semiconductors are going to be one of the principle participants in this technology rally.
KANGAS: OK. You really are hot on high-tech.
MORROW: Yes, I am.
KANGAS: How about one more?
MORROW: One more would be one I personally own, SSO, which is the Ultra S&P 500 ProShare, not for the feint of heart. It moves twice as fast as the S&P 500 on the up side and down side. But it would be a way the participate in a bull market.
KANGAS: In a broad bull market.
MORROW: Broad bull market.
KANGAS: It's way down. It's depressed. That's probably what you like about it at this stage.
MORROW: I do like that.
KANGAS: Do you personally own any of the securities mentioned or have any disclosure to make?
MORROW: Just the SSO.
KANGAS: That's the only one you personally have?
MORROW: Absolutely.
KANGAS: Thank you for being with us once again, great to see you.
MORROW: Thanks, Paul.
KANGAS: My guest, Robert Morrow of the high tech growth Forecaster.
