Profiting in Volatile Markets

05/13/2008 12:00 am EST


Joe Battipaglia

Market Strategist-Private Client Group, Stifel Nicolaus

Paul Kangas, co-anchor and financial commentator for PBS’s Nightly Business Report, moderated a panel of experts dedicated to helping investors navigate the current volatile market environment.

Jon Markman, editor of Strategic Advantage and Daily Advantage, gave attendees a selection of recommendations for Brazil, a country he currently finds very attractive. Brazil is self-sustaining, producing 80% of its own energy, and has attained great success with utilizing ethanol derived from sugar cane, instead of the foodstock corn.

Additionally, Markman sees potential as a result of the country’s production of other commodities, as well as the potential of its large swelling middle class.

Tobin Smith, editor of ChangeWave Investing and ChangeWave MicroCap Investor, told investors that while the US is not declining, the rapid rise of the rest of the world makes global investing the place to be. He shared several ideas to capitalize on these opportunities, primarily in the energy and alternative energy arenas.

Jim Stack, editor of InvesTech Market Analyst, presented his mostly-upbeat macro view of the economy and market, yet warning investors of looming pitfalls, including growing consumer debt, as well as the continuing housing crisis. Yet, Stack sees the bearish consumer confidence and sentiment and current recession talk as potential contrarian indicators of buying opportunities.

He suggested that investors pursue a top-down strategy until the markets give a clear bullish signal.

Louis Navellier, editor of Blue Chip Growth, Quantum Growth, Emerging Growth and Global Growth, urged attendees—during these volatile times—to put the bulk of their money into conservative, blue-chip companies that pay dividends. He sees a major style shift on Wall Street in the near future, from value to growth stocks.

Navellier also shared his views on global investing, and like Markman, he prefers Brazil over India and China right now.

Joe Battipaglia, market strategist-Private Client Group, Stifel Nicolaus, who was bullish in the 1990s, is sounding caution for the remainder of this year. Battipaglia cites the narrow leadership, as well as the weak economy, as the culprits that are creating an environment in which making money is tough.

On the bright side, he still likes large-cap growth, technology, consumer staples, media, and health care. Internationally speaking, Battipaglia recommends that investors avoid China, India, and Russia, but is favorable toward Brazil, Germany, and Korea.

Michael Murphy, editor of New World Investor, admitted a cautiously bullish stance, telling attendees that the 1440 mark on the Standard & Poor’s 500 is the benchmark to watch. Murphy expects that level to be an important test, and if it breaches that support, the S&P could see a healthy leap forward in early 2009.

As for sectors, Murphy currently feels that the video, health care, and wireless communication segments are attractive.

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