While you may be thinking the stock market's fallen off a cliff, it's really only a couple of percentage points off its highs. There could be a lot more downside, and while the Dow has some support at 12,000, what if that doesn't hold? That's when the real pain begins and what you should be prepared for. You're really going to have to avoid most of the hotly debated names because they've proven themselves unworthy of your hard-earned cash.When I warned you that the trouble in the financial and housing sectors would pressure the stock market, I underestimated how quickly the pain would begin. Then, I threw out 10 names I was considering buying if they showed signs of either bottoming or some good old-fashioned panic -- neither has happened yet, so I'm still watching and waiting.
In particular, Apple (NASDAQ: AAPL) and Intel (NASDAQ: INTC) really disappoint me. I haven't been an Apple fan ever since its stock became too pricey, but the muted reaction to Macworld really proves my point that expectations were too high. And Intel -- well, thanks to its pathetic excuse for a quarter, it's forced the Semiconductor HOLDRs (AMEX: SMH) to take out some hugely important multi-year support, which tells me to avoid all the semiconductor stocks. Just say no to potential buys like NVIDIA (NASDAQ: NVDA), Broadcom (NASDAQ: BRCM), Texas Instruments (NYSE: TXN) and Altera (NASDAQ: ALTR).
And Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) -- even though I'm starting to get interested at these prices, their recent deals mean those stocks still don't deserve my money just yet. Neither do their compatriots Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS), Bear Stearns (NYSE: BSC) or Lehman Brothers (NYSE: LEH).
Investors: I'm sorry these market leaders have let you down, but there are better-managed companies out there. Here are some I'm looking at scaling into on weakness, but remember, this is not the time for speculation -- it's the time for preservation, so I urge you to be extremely cautious.
Focus on the fastest-growing, best-performing agriculture leaders like Monsanto (NYSE: MON), Agrium (NYSE: AGU), Potash Corp. (NYSE: POT) and my absolute favorite, Mosaic (NYSE: MOS), which just reported stellar earnings. They all have beautifully uptrending earnings estimates and stock charts.
If you're looking for well-run internet companies, Google (NASDAQ: GOOG), Amazon.com (NASDAQ: AMZN) and Priceline.com (NASDAQ: PCLN) are my three favorites; through no fault of their own, these stocks are now on sale, especially as compared to their growth rates.
Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund. DISCLOSURE: Timothy Sykes holds no positions in any stocks mentioned.
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Reader Comments (Page 1 of 1)
1-16-2008 @ 7:57PM
Burt Iverson said...
Your opinion on whether or not BAC will lower its dividend???