(Greenspan) gave those words of reassurance. Today will set the tone, and, on balance, tomorrow should be positive. |
(This) week is going to give us a lot of important information about the start of the third quarter, |
(This) week is time for two steps forward, |
[Financials and consumer non-cyclical stocks also interest Johnson.] You look at a company like, say, Washington Mutual, in my judgment a great company, and it's a value play. Remember, investors in this market are looking for low price/earnings ratios and some dividend yield, ... Same thing consumer non-cyclical companies like Pepsi and Safeway I think are good investments in this environment. |
[Hugh Johnson, chief investment officer at First Albany, suggested that fear -- as much as fundamentals -- is driving the market to levels once considered out of reach.] It's a vicious circle, ... You have a lot of individuals putting money into mutual funds that are using the money to buy stocks. You're simply afraid to be out of the market. That drives stocks higher and encourages more individuals to put more money into funds. |
[Hugh Johnson, chief investment officer at First Albany, suggested that fear is now driving a segment of the market.] It's a vicious circle, ... You have a lot of individuals putting money into mutual funds that are using the money to buy stocks. You're simply afraid to be out of the market. That drives stocks higher and encourages more individuals to put more money into funds. |
[That can be done, but it can be frustrating.] The world doesn't wait for you to go through your research, ... You're sitting there doing your research and while you twiddle your thumbs, Rome is burning. |
[They] face each other across the road like mad old duchesses in party clothes. |
[Which doesn't mean it's time to liquidate all positions in large caps.] There are reasons why large cap companies have done better, ... What's very intriguing is, that's changing. |
[Which summer?] The most exciting period in U.S. stock market history was the summer of 1929, ... It was the summer, and nobody went on vacation. Many books have been written about how exciting it was. |
A 25-basis point rise is built into the markets. What's not built in, and there's a chance this could happen, is that they might shift the balance of risks to favor inflation, which would mean that rates will rise more aggressively next year. |
A company like Sunoco, we know their earnings will be better, but how much better? ... As a portfolio manager, that question stops you. |
A lot of traders will be circling like vultures, to find the companies that are the target of tax selling. |
After seeing these reports, it's likely the Fed will...raise rates at the measured pace the market is used to. |
Almost every quarter I can remember people have come up with reasons to explain away earnings gains. The truth is that earnings are doing better, and the hope is that, because earnings are improving, companies will begin to hire and spend money on technology. |