Hit That Mute Button

May 25, 2001
Gary Kaltbaum

I
have to tell you
— sometimes I get so Â incensed by the stuff
I see on Wall Street that I just want to heave.
First off, how
anyone continues to give any credence to most analysts‘
recommendations is an absolute amazement.
It is bad enough
that, for the most part, their
calls have led investors astray.
My rant today is
about an analyst call but mostly it is about the media, of
course, namely the
donutheads on CNBC. Â

Tom Costello (ye
of CNBC and the Nasdaq
trading site) announced
on several occasions today that a Prudential call on Semiconductors would have a
major
impact today. Yes,
a major

impact! The three names upgraded were
(
AMAT |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating) and
(
TER |
Quote |
Chart |
News |
PowerRating).Â
After watching how
the stocks opened, I
would hate to see what a minor
impact would look like. So,
my first point is
that the CNBC ratings–grabbers
are still at work trying to suck you in and get you excited.
I will let you
decide why.

Then, I
get into the second part of the problem.
Why wouldn’t Mr.
Costello talk about
Prudential’s last couple of calls on these stocks?
It’s not like he
couldn’t find them. I
easily was able to obtain two
out of three
— and it is not a pretty picture:

AMAT	2/16/00	Put out a “STRONG BUY”	$82.50
Â	11/14/00	Lowered to “ACCUMULATE”	$41.44
Â	TODAY	Raised to “STRONG BUY”	$54.42
Â	Â	Â	Â
KLAC	6/28/00	Put out a “STRONG BUY”	$61.88
Â	12/13/00	Lowered to “ACCUMULATE”	$30.44
Â	TODAY	Raised to “STRONG BUY”	$57.02

The numbers speak for themselves.
Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

To be fair, Pru
has made some excellent calls in the past and I love what they have done with
their research department lately. This writing is not to
blast them. It
has been a tortuous market for the fundamental side over the past year.
My problem is the
tens of thousands of investors who watch and listen to CNBC continue to get
selective information that could bury your wallet.
Every stock that is
mentioned comes along with how high it has gone up over the past five
weeks and not
the fact that they are down 75% in the past
nine months.
The shame is there
are some great people on CNBC like Bill Griffith and Sue Herrera who don’t feel
the necessity to tout, but just to report. My continued
advice…mute button! If
you must listen — a
big grain of salt.

The market continues to pull in its horns. For the
intermediate-term trader, it
is time to look at definable support levels which the major indices broke out of
recently. I
would not be excited if they violated these numbers. DOW
11,000 is a gimme… S&P
500 at around 1270 and a Nasdaq 2200.