Pat Fitzgibbons on AOL's MarketTalk, Oct. 10, 2000

Patrick M. Fitzgibbons chatted on AOL MarketTalk Tuesday, Oct. 10, 2000 at 12:30 p.m. EDT. AOL's MarketTalk is produced by Sage Online (Keyword: Markettalk).

Comment: Live from New York, NY, please welcome Pat Fitzgibbons, senior markets editor, TheStreet.com.. Pat can answer questions about the markets and investing. Pat does NOT offer individual stock commentaries or recommendations. Visit Keyword: TheStreet.

PFitzgibbo: Good afternoon everybody. Pretty lousy feel to the market today, but let's see if we can make some sense of it all.

Question: Are there any sectors left that have any room for growth? Especially with the interest rates so high?

PFitzgibbo: Oh sure. But, what you really have to be careful about here is finding the most beat-up sectors and identifying the real values within those sectors.

PFitzgibbo: For example, does anyone really think some of these big-tech names should be so depressed? I'm not sure I buy it!

Question: Do you feel that the market is close to a point of capitulation and if so will the traditional fourth-quarter rally occur this year?

PFitzgibbo: Identifying the bottom of this market is a very dangerous thing. That said, though, I think that a lot of the problems that might depress earnings this quarter (euro, oil, etc.) are unique and could improve during the fourth quarter.

Question: Do you think the market has been running on smoke and mirrors lately, like DELL and INTC getting hammered, it's not like they're going bankrupt?

PFitzgibbo: I'm not sure I get the "smoke-and-mirrors" analogy. I still think that a lot of these beaten-down companies have strong business models and will improve when all of this slop starts to clear out.

Question: Do you feel that electric utility stocks have been getting a boost from their Internet-related and technology investments?

PFitzgibbo: Certainly, the effects of the Internet have been felt in many other subsidiary business and sectors.

PFitzgibbo: I think there will also be some more spread as the Internet expands its reach and, inevitably changes going forward.

Question: My portfolio is about 70% bonds and 30% stocks and mutual funds. I am 69 years old. Recently several of my individual bonds have come due. Should I put them back in bonds or go into more stocks or funds?

PFitzgibbo: That sounds like a lot of bonds, but in this market, with the level of uncertainty that's out there, you might want to reinvest that money right back into bonds.

PFitzgibbo: I'm not an investment adviser, and you certainly want to make your own decisions, but bonds are certainly a safer haven right now.

Question: Why do you think the market took such a negative veiw of the AOL/Time Warner merger?

PFitzgibbo: I think that one of the concerns about that merger -- and indeed with many big mergers -- is that investors are unclear what each one of the businesses actually brings to the other.

PFitzgibbo: I think people thought it was an awfully big stretch for AOL. However, I think that the merger will be a good thing for both companies down the road and will serve as a positive for the shareholders.

Question: Did you anticipate how badly the higher interest rates would cut into future corporate profits?

PFitzgibbo: I don't know that anyone really saw this quarter's rash of earnings warnings coming (which may explain the lousy tone of the market). However, interest rates are always a concern for investors and always need to be considered in making stock picks.

Question: How do you see the Nasdaq for the remainder of the year?

PFitzgibbo: The Nasdaq is feeling pretty crummy right now. However, I think the fourth quarter will be a better quarter once the election gets over with and people can focus more on the market's strong fundamentals.

Question: 50K to invest today -- 5-10 years -- where?

PFitzgibbo: Well, I can't give you individual stock picks, but I think there are a few questions you need to ask yourself with this investment.

PFitzgibbo: Are you looking for high-growth potential (high risk) or are you looking for more stability (low risk)? I'd recommend taking a look at TheStreet.com and seeing some of our Investing Basics that can handle a lot of these kinds of questions.

Comment: Thank you for joining us today Pat! We have been speaking with Pat Fitzgibbons, senior markets editor, TheStreet.com. Visit Keyword: TheStreet.

SageCrystl: We appreciate your insights today Pat.

PFitzgibbo: Thanks very much for the time today and I'll see you on TheStreet.com!