RealMoney Radio: Not Fun in the Summertime
Aaron Task welcomed William Gabrielski, research analyst at TheStreet.com and co-author of the Breakout Stocks and Stocks Under Ten newsletters, to Jim Cramer's "RealMoney" radio show Tuesday. Task, co-executive editor of TheStreet.com, is filling in for Cramer this week.
Task asked Gabrielski how he was dealing with the current market environment.
It hasn't been easy, Gabrielski said. In general, the key to speculating is finding companies that are profitable, because then you have a downside valuation target. Investors can then value the company on something, he said.
For example Sirius Satellite Radio (SIRI) is not profitable, Gabrielski said."So subscriber growth is not a good valuation model?" Task asked. It's a good data point in an up market, but you have to adjust your strategy in a sour market, Gabrielski said. Regarding the notion that momentum might shift to the bigger-cap stocks as the Fed tightens interest rates, Task asked Gabrielski if he was concerned about a shift. Although the shift hasn't occurred yet, people have been seeing the shift starting, Gabrielski said. But when you make that argument of a shift, you are talking about relative performance, he said. "It really comes down to stock selection," Gabrielski said, adding that he believes that one can outperform the market by changing strategies and not following any strict guidelines. When Task asked about Palm (PALM), which reports its numbers Thursday, Gabrielski said he is optimistic about the company. It opened strong today, Gabrielski said, adding that he is confident that Palm's market share will remain steady. Although there has been a lot of bearish talk about the company, it hasn't shown up in Palm's numbers, he said. Gabrielski believes that the company will report some of the best guidance that the market has seen for its August quarter and for 2007.
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