"Street Critique"-Hilary Kramer, Chief Market Strategist at Greentech Research
Wednesday, November 26, 2008PAUL KANGAS: Tonight`s "Street Critique" guest says in one way, individual investors have a leg up on institutional investors in a market like this. She`s Hilary Kramer, chief market strategist at Greentech Research and author of "Ahead of the Curve". And Hilary, welcome back to NBR.
HILARY KRAMER, CHIEF MARKET STRATEGIST, GREENTECH RESEARCH: Thank you, Paul. Thank you for having me tonight.
KANGAS: Before we get to your assertion, we now have four consecutive trading sessions on the up side which added a total of 1174 points or 15 percent to the Dow. Is this rally sustainable?
KRAMER: Paul, I wish it were sustainable. I wish the Dow and the S&P would go all the way back where they were beginning of the year, but it`s not possible, because what`s happened is, our Federal government has thrown $1 trillion at banks so banks can still exist, but it hasn`t trickled down to the consumer. We as consumers still have a lot less money, concerns about unemployment, decreases in our home value prices and that is what translates into lower stock prices ultimately.
KANGAS: Too many uncertainties, as simple as that I guess and the market doesn`t like that. Which sectors are you watch that might change your mind?
KRAMER: I`m looking at are some of the retail sectors, consumer discretionary and I`m concerned about those. I think after the holidays, we may actually see a few bankruptcies in some specific names. Companies are going to do the best they can to make it through, but slash prices too much and just don`t have enough revenue.
KANGAS: Now let`s get back to your thoughts on individual investors. Do you think they can beat the Wall Street pros when it comes to stock picking in this market. Why is that?
KRAMER: Absolutely. Well first of all, the institutional investor has just been spun around and doesn`t even know which direction to go in. The market starts going up and they start all going back up again and it`s all about technicals and over sold and everything anyone`s ever known has just been thrown out. So when it comes to an individual investor, the individual investor has such a leg up because an individual investor they can take a look at the stores, take a look at restaurants, leisure, casinos, gaming, hotels and make a decision. Are there people buying? Are there people in the parking lot? What`s really going out there? Wall Street doesn`t know any more. Wall Street, all the rules have changed.
KANGAS: OK. Fair enough. You mean analysts don`t do things like that. They just stay in their offices and look at charts?
KRAMER: Well, they`ve been doing that for the last few months because everything is chaotic. There`s also been a tremendous number of layoffs and those that used to manage portfolios aren`t doing so any more and so there`s been a disconnect with reality. They used to call it channel checking, checking the stores, but a lot of analysts these days are staring at the screen in wonderment.
KANGAS: So you`re saying there`s no substitute for doing your homework when it comes to bottom fishing in this market, get out there.
KRAMER: That`s absolutely right.
KANGAS: Get out there and kick the tires, right?
KRAMER: Right. And what you see where you see a lot of people, it was very obvious, McDonalds was doing a great, great business in this market and look how it`s reflected into the stock price in a good positive way.
KANGAS: Very interesting observation Hilary and I want to thank you for sharing your insights with us once again.
KRAMER: Thank you, Paul, thank you for having me.
KANGAS: My guest, Hilary Kramer, author of "Ahead of the Curve."
