What's the Next Mega-Trend?

09/06/2007 12:00 am EST

Focus: MARKETS

Tobin Smith

Founder and Chief Research Analyst, NBT Equity Group

The gurus of ChangeWave – Tobin Smith, Michael Shulman, and Bryan Perry–came together to give investors their favorite investment ideas, stemming from their collective forecasts of coming mega-trends.

The ChangeWave team searches for catalysts that will produce transformations, or waves of change that have potential for short-term trading as well as long-term investing gains. And the gurus feel the recent troubles in the financial markets are great buying opportunities in what they call a “correction, not a bear market.”

Tobin Smith, Editor, ChangeWave Investing, and ChangeWave MicroCap Investor,
 told attendees that Apple’s (AAPL)move to cut prices on its iPhones, followed by the company’s offer to give prior iPhone buyers a $100 credit, was pure genius. So much so, that he now thinks the stock is going to $225/share. Smith also likes Terra Nitrogen (TNH), Anadigics (ANAD), and Immersion Corp. (IMMR).

Bryan Perry, Editor, The 25% Cash Machine and ChangeWave Tactical Trader,, looks for highly diversified companies that pay great dividends. And right now, he believes the Fed will lower interest rates, supporting some of the closed-end funds and convertibles that are trading at discounts. Editor's note: The Federal Reserve lowered rates by ½% in its meeting on Tuesday, September 18.

Some of his picks include: Advent Claymore Enhanced Growth & Income Fund (LCM), Evergreen Global Dividend Opportunity Fund (EOD), H&Q Healthcare Investors (HQH), NASDAQ Premium Income (QQQX), and Golar LNG, Ltd. (GLNG).

Michael Shulman, Editor of ChangeWave Biotech Investor and ChangeWave Shorts, told attendees that the home builders have not yet begun to “feel the pain.” He expects prices to continue falling for at least six quarters and recommends that investors participate in the short side of the market by buying puts on Centex (CTX), DR Horton (DHI), Pulte (PHM), and Hovnanian (HOV). He cautioned that, in his opinion, individual investors should never short stocks; instead, utilize put options to participate in the downside of a stock. And lastly, Shulman shared some of his biotech favorites with attendees:Amylin Pharma (AMLN), Prana Bio Ltd. (PRAN), Nutracea (NTRZ), and then warned them to stay away from Amgen (AMGN).

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