Street Critique - Hilary Kramer, Chief Market Strategist at GreenTech Research
Wednesday, February 11, 2009PAUL KANGAS: Tonight's Street Critique guest says the stock market is still a treacherous place. She's Hilary Kramer, Chief Market Strategist at GreenTech Research and author of "Ahead of the Curve." Hilary, good to see you again. Welcome.
HILARY KRAMER, CHIEF MARKET STRATEGIST, GREEN TECH RESEARCH: Thank you. Nice to be here, Paul.
KANGAS: You call the market treacherous. What kind of condition would bring that about?
KRAMER: Well, there's a lot of things going on in this stock market because you have investors continuously jumping back in, thinking the bottom has arrived, just to turn around and find out we're going to hit a new bottom. There are a lot of sellers in this market...big institutions, pension funds, endowments. Every individual investor should be careful before jumping in.
KANGAS: Let me give you a theoretical question. You're an investor who has lost 50% of your portfolio value. Do you sell, rotate into other stocks, or just hold on?
KRAMER: First of all, it's not theoretical. Most investors have lost close to, if not more than 50% on their portfolio. My answer there is if you don't need the money for ten years or more, stay with it. Stay the course. Don't try to chase performances. You know, China is doing well. Don't jump in there because it's up 23%. But, if you need that money, don't continue to wait and think it can't get much worse because it always gets much worse if you hold on...because you think it can't be any worse that it is.
KANGAS: Is there anywhere to make money now?
KRAMER: Well, you have to be very careful in the stock market. I find that the way I make money on the long side buying stocks is I go in and out of undervalued, real stalwart companies, you know, the Intels, Microsoft. You know, I'll do that on a day the market is down. I'll buy a little bit. I'll sell it withing 24 or 48 hours, otherwise you have to be careful.
KANGAS: Less than a minute. What sectors should be avoided? Quickly.
KRAMER: Be very careful on the online education, for-profit education areas. This is the most frothy right now. Everyone things that this is where the money should be, but in actuality there's almost a subprime lending problem brewing there. Be careful of the commercial. That's an area that the stock is $4. Don't think o fit that way. Also, big retail. I'm very ware about a company like Sears, for example.
KANGAS: Will the stimulus have a positive impact? Will it work?
KRAMER: Even though it has some pork in it, it has many programs for both the employed and unemployed to make life easier. I'm very, very happy to see the progress that was made today.
KANGAS: It will take a little time to work, but you think it will work?
KRAMER: Absolutely. Over time.
KANGAS: Hilary, great to see you again. Thanks for being with us.
KRAMER: Thank you, Paul. Thank you for having me.
KANGAS: My guest, Hilary Kramer, Chief Market Strategist at GreenTech Research.
