"Market Monitor"-Daniel Seiver, Editor of "The PAD System Report"
Friday, April 17, 2009PAUL KANGAS: My guest "Market Monitor" this week is Daniel Seiver, editor and publisher of the investment newsletter entitled "The PAD System Report" and Dan, welcome back to NIGHTLY BUSINESS REPORT.
DANIEL SEIVER, EDITOR & PUBLISHER, THE PAD SYSTEM REPORT: Great to be back, Paul.
KANGAS: It's been all too long since you were with us last. You have been in several different locations across the country, and now you're a lecturer in finance at San Diego State University. It's good to have you back.
SEIVER: It's great to be back.
KANGAS: How have you weathered this recent bear market?
SEIVER: Well, we were very negative on the market in 2007, holding lots of cash and that was a good call for us, but we did get back in, in 2008 and by the end of 2008 we saw cheap stocks and were fully invested.
KANGAS: You got in a little bit too early, though, right?
SEIVER: We were fully invested now. With hindsight we should have gotten fully invested in early March. We were already fully invested but we were happy to buy some even cheaper stocks and we want to hold them for three to five years.
KANGAS: Tell our viewers what the P-A-D acronym stands for.
SEIVER: Well it stands for patience is the P, Discipline is the D and those are the two main traits that an individual investor needs, I think, to really profit in the stock market.
KANGAS: That's a great name.
SEIVER: Yeah. You need the patience to hold on for years, which is where I think you make your money and you need the discipline to be able to stay long at times like this when the news is really terrible.
KANGAS: It sounds like you're turning a little bit bullish on stocks. What do you think about bonds?
SEIVER: We're actually very negative on Treasury bonds. I really think Treasury bond yields are going to go much higher in the next few years even if the Fed manages to withdraw some of that liquidity. The problem is when the economy recovers and bonds are no longer a safe haven, I think their yields have to go significantly higher.
KANGAS: Since you have turned rather bullish on stocks, what kind of stocks are you buying now?
SEIVER: Well, we like growth stocks. We like good growth at a reasonable price and I've got six stocks for you, three conservative growth stocks and three a little more aggressive and we like them all and I own shares in all these, so I'm backing this up with my own money. I can give you all six now.
KANGAS: All right, go right ahead, number one.
SEIVER: Number one is Johnson & Johnson (JNJ). That's a household name. Everybody knows them. They've got a good, long-term growth record. They are cheap. We picked them up in the high 40's. They're not much about that now. I think that's a good three to five year holding for conservative investors.
KANGAS: JNJ.
SEIVER: JNJ. KANGAS: OK, number two.
SEIVER: Number two is Sigma-Aldrich, ticker is SIAL, not as well known but very conservatively managed, strong balance sheet, good growth record. They're in the life sciences supply. They have chemicals for everybody. If we do more science spending, they're going to do very, very well.
KANGAS: Number three conservative choice.
SEIVER: Number three conservative is CR Bard. That's BCR is the ticker symbol. They're in medical supplies and they've got a tremendous growth record. Again, very strong balance sheet and that's an excellent choice. You can sleep with that one easily.
KANGAS: Let's get into the more speculative crowd here now.
SEIVER: OK. We've got three that -- there is more volatility here, more risk but a lot of potential gain. First one is alternative energy. First Solar, FSLR. They're a leader in thin-film solar. I think alternative energy will be huge over the next five to 10 years. They will profit enormously.
KANGAS: Number two in this category.
SEIVER: Second is Ormat. You probably haven't heard of that one. Ticker symbol is ORA listed on the New York Stock Exchange. They're in geothermal, which is another great alternative energy play. Again they have tremendous prospects over the long run.
KANGAS: And your final choice.
SEIVER: Final choice is a special favorite of mine, robotic surgery. In particular, lots of us baby boomers are going to need more and more surgery as we get older. ISRG, Intuitive Surgical is a leader in robotic surgery. These guys have great upside potential.
KANGAS: Dan, you said you own all of these stocks. Do you have any other disclosure to make about them?
SEIVER: No. It's just that I love them all.
KANGAS: OK. Unfortunately, our time has run out but I want to thank you for coming back to see us. We'll do it again.
SEIVER: OK. Thank you, Paul.
KANGAS: My guest, Dan Seiver of the"PAD System Report."
