In a tough market, consider takeover candidates

The Ticker

March 30, 2001|By JULIUS WESTHEIMER

"CONSIDER takeover candidates when investing in this increasingly difficult market," says Charles LaLoggia, editor of Superstock Investor. "Buy stocks selling below their asset values and not dependent on a rising market.

"Also, be sure the stocks have fallen significantly from their highs and are largely dismissed by Wall Street analysts. Examples: Alliance Capital Management Holding LP, American States Water Co., Houghton Mifflin Co., Midway Games Inc. and Performance Group Co."

BONDS OVER STOCKS: Expecting an immediate stock market rally? "There is no quick fix for this market where the wreckage is everywhere," says Stuart Schweitzer, investment strategist. "For now, consider long-term bonds - interest rates should fall - and also forest, paper, chemical, diversified manufacturing and media sectors, which will benefit when the economy picks up."

GLIMMER OF HOPE? "Despite the market's unhappy reaction to the Fed's recent rate reduction, history shows that lower rates eventually bring higher stock prices. A study shows that the S&P 500 has been higher 250 trading days (roughly a year) after the start of all but one Fed easing cycle since 1960." (The Outlook)

WALL STREET WATCH: "Major support has been broken in the Dow Jones average, and the teeth of the bear are upon us - looking for a bottom." (Smart Money)

"Alan Greenspan does have the ability to alter interest rates, but when he waves his wand and interest rates fall, there is typically a lag time of six to nine months before business improves." (Cabot Market Letter)

"The market is not overpriced. I'm not bearish about stocks at this level, but I'm not excited either. Stocks are still a long-term hold." (Jeremy Siegel, finance professor, Wharton School)

"Stocks still are not cheap." (Warren Buffett)

"If there's anything we learned recently, it's diversification, diversification, diversification. Not just in stocks and bonds, but certainly in subsectors as they pertain to the Old Economy and New Economy." (Dail St. Clair, money manager, in Black Enterprise, April)

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