Overheard On The Street
Here’s what they’re saying at mid-day:
Paul Rabbitt, President, RabbittAnalytics:
“All of the major indexes are oversold.
The Fed has already acted vigorously and probably will ease again March
20. Technology has become a value
sector relative to its pricing over the past five years, Sentiment is the most
bearish in two years (a contrarian buy-signal).
Our sector allocation is 10% cash, 10% bonds, and 80% equities.
This is no time to raise cash. Our
worst case scenario is the possibility of some near-term sloppiness lasting up
to a few more months. Investors are
reacting to the immediate declines in earnings while ignoring the significant
rate cuts implemented by the Fed and the potential stimulus from
tax-refunds.”
Frank Gretz, Market Analyst, Shields
& Company: “Don’t
worry . . . be invested. That seems to be
the strange new credo.
While anything is better than ‘buy the dips,’ this lack of fear is
not good.
They say investor sentiment goes through three phases.
The first, which we’ve seen a lot of, is outright complacency.
The second, and the one we seem in now, is concern.
In the concern phase the news has turned bad, losses are mounting and
investors are, well, concerned.
The last phase is the fear phase and it’s in the fear phase that
bottoms are made.
The difference between the concern phase and the fear phase may sound
semantic but it’s very real.
In the concern phase investors are worried, but not worried enough to
sell.
In the fear phase they’re worried, and they sell.
Remember, it’s not the buying, it’s the selling that makes
bottoms.”
John Roque, Vice President, Arnhold and
S. Bleichroeder: “The New York Times profiled a promient Wall Street
Internet analyst, the 180 degree direction change of his stock picks, and the
impending lawsuit by an investor who alleges the analyst kept a buy rating on a
stock because the analyst’s firm was negotiating a transaction involving the
company. Paul Macrae Montgomery, of Universal Economics and the father of the
magazine cover contrary indicator, couldn’t have dreamed it up any better. The
fact that The New York Times chose to put this story on the front page
tells us that Nasdaq has got to be making a low.”