Tom, what are we to make of this stock market? Will it go anywhere until the Iraq situation is resolved and the economic recovery seems certain?
Well, today we saw investors taking a cautious stance ahead of Secretary of State Powell’s expected speech to the U.N. tomorrow morning. We do believe that the prospect of war is putting a cloud over the stock market, and greater clarity of what lies ahead will be important for creating sustained upward momentum. Q: With consumer confidence down, are the consumer-discretionary stocks you cover still a good place to be? A: We believe that there are still a good number of attractive stocks in our coverage area. Among our favorite stocks in the sector are Wal-Mart, Quiksilver (ZQK ), and Applebee’s (APPB ). Q: Can you give reasons for your stock picks? A: We expect that Wal-Mart will benefit from consumers’ continued price-sensitivity, whereby growing amounts of consumer spending will increasingly move from fuller-priced retailers to those who offer goods at more attractive prices. With Applebee’s, we see a long-term demographic shift taking place, where consumers will be spending more of
