Participants on April 1 included host Brenda Buttner, Gary B. Smith, Dave Kansas, Cory Johnson, Jonathan Hoenig, Aaron Task and guest Thomas Madden. The transcript is unedited, and phonetic spellings are indicated with (ph).

BRENDA BUTTNER, HOST:

Up next, information you need to make your own decisions in the stock market. Did you get run over by the tech wreck this week?

A couple of Wall Street heavy hitters make cautious comments, and the

Nasdaq

heads south in a big way. How can you take advantage of moves like that? And what happens on Monday morning? We'll give you the "Word on TheStreet."

Also, you're paying more for gas. How about profiting from those higher prices? Wait until you hear what the "Chartman" has to say about two of the oil giants.

All that, plus "Predictions" you can't afford to miss. But first, the headlines with

Fox News Live

.

BUTTNER:

Hi, everyone. I'm Brenda Buttner. And you are connected to "TheStreet.com."

And a special welcome to our new viewers on Channel 37 in San Diego. We're glad to have you.

And we're here to help level the playing field on Wall Street. Pretty tough game there next week. Tech stocks badly beaten, although there was a bit of a bounce back on Friday. The question is, is the worst over?

Let's get the "Word on TheStreet."

With us from

TheStreet.com

Web site, Editor-in-Chief Dave Kansas, Editor-at-Large Cory Johnson. Joining from Washington, D.C., columnist and resident "Chartman" Gary B. Smith. And in Chicago, contributor Jonathan Hoenig, who also runs

Capitalistpig Asset Management

.

Also here, Thomas Madden. He's the chief investment officer at

Federated Investors

, which manages about $125 billion in assets.

First topic, tech stocks suffer after some bearish comments from a couple of Wall Street big shots, the Nasdaq hit hard losing 390 points, which is about an 8% drop.

Dave, you know, it seems like the one thing that you can count on in this market is its volatility. Looking forward, we had a little bit of a bounce back on Friday, but tech stocks were badly, badly hammered. What happens? Easy question.

(LAUGHTER)

DAVE KANSAS, EDITOR-IN-CHIEF, THESTREET.COM WEB SITE:

What happens? It's always easy to look ahead.

One thing I want to do is look back, first, though. The Nasdaq composite is up about 80% over the last 12 months. So even though we've had a lot of tension the last week, still a pretty good run for the last 12 months.

I think we're going to see a lot more volatility, especially in smaller technology names. Some of the bigger names, I think people are going to start trying to gravitate toward big names like

Cisco Systems

,

Dell

, trying to find some safety. But the smaller names, I think that game is really going to be difficult for the next several weeks.

BUTTNER:

All right, Tom, what are you buying now?

THOMAS MADDEN, CHIEF INVESTMENT OFFICER, FEDERATED INVESTORS:

Well, my sense is that we had excessive valuation, that we needed some kind of a correction. We've had four of these in the last two years. And what we're doing with a lot of cash flow from our clients is nibbling away at the

Oracles

and Ciscos on weakness.

Our trader said on Thursday that he bought $10 million worth of tech stocks for $9.2 million. So I think the bid will likely be there next week.

BUTTNER:

We've actually had four of these in the last two months I think...

MADDEN:

It feels like it sometimes, right?

BUTTNER:

... Yeah, absolutely. Cory, is this just skittish investors looking for an excuse to sell off? I mean, basically, it was some comments by some market gurus that started this whole thing.

CORY JOHNSON, EDITOR-AT-LARGE, THESTREET.COM WEB SITE:

Right. Well, you know, every year around this time, usually it's about four weeks from now, but at the end of April every year for the last four years running we've seen big selloffs in tech stocks.

You know, the summer is a slow time for tech stocks. Europe takes the summer off. A lot of spending happens in tech. A lot of spending doesn't happen in the summertime.

I don't know if we're going to come back in the next few weeks. But like I said, everyone in the last four years, we've seen a big selloff at the end of April. Maybe it's just come a little early this year.

BUTTNER:

OK, but we...

JONATHAN HOENIG, CAPITALISTPIG ASSET MANAGEMENT:

Is there any fear left in this marketplace at all? That's what is interesting about the tech selloff.

BUTTNER:

Weren't you afraid this week?

HOENIG:

Well, I've been afraid for a long time, Brenda. But I mean...

MADDEN:

Totally common.

GARY B. SMITH, "CHARTMAN":

Dave, Dave, you saw fear the other day, didn't you?

HOENIG:

I didn't see the...

SMITH:

When the Nasdaq was down 286?

HOENIG:

... You didn't see it in the option volatilities. You don't see it in buying in the options market...

BUTTNER:

I don't know. A lot of people see it...

HOENIG:

... I mean, you would have seen it on the front page of the newspapers.

BUTTNER:

... in their portfolios, Jonathan. I mean, if you're an average investor, you got hurt this week.

MADDEN:

Well, let me...

HOENIG:

You think it hurt this week, Brenda? There's more downside of the Nasdaq coming.

BUTTNER:

You think so? How far?

HOENIG:

Absolutely.

SMITH:

He's stealing my thunder.

(LAUGHTER)

BUTTNER:

No, no, no, Gary...

SMITH:

He stole my notes.

BUTTNER:

... You get -- wait a minute. I hear that thunder right now. Get out your magic chart and tell me what's going to happen, Gary.

SMITH:

You have to wait for my "Prediction."

BUTTNER:

Oh, come on -- all right, all right.

HOENIG:

I'll steal some more of Gary's fun. I mean, from a professional perspective, you're looking for some real fear to enter in the marketplace. And you know, they call it the magazine cover indicator.

I was shocked at a time when so many individuals have a majority of their wealth in the stock market, 40% at some measures, you don't see it making front-page headlines in the major newspapers when the Nasdaq takes a 10%, 11% correction.

This should be front page news. And until it becomes front-page news, I think you're going to see more downside.

SMITH:

Jonathan, read

Barron's

tomorrow. It will be front-page news, no doubt.

BUTTNER:

Well, that's every week, right?

SMITH:

Every week.

MADDEN:

There's one other piece of it, though, which you've got to pay attention to. And that is that the fundamentals for these companies, in our view, have not changed at all.

You know, the earnings growth rates are still just as high as they were two weeks ago. And until there's some shift in those fundamentals, maybe the public is wiser than the institutional managers and it's going to continue.

BUTTNER:

Yes. Well, they have proven to be smarter than the pros for quite some time.

All right, next topic, online investing.

TheStreet.com

Web site conducted the biggest survey ever on the Web about online brokers. Some fascinating results.

Most important feature new online investors want is reliability, to know that the site you're using won't crash no matter how heavy the volume. The next thing that matters most, real-time quotes, then quick confirmation of orders.

Problem is, the survey suggests that most online brokers aren't really delivering. Gary B., you trade for a living. And you used to rely on online brokers. No more. Why is that?

SMITH:

Well, I'll tell you. I think the online brokers have actually created their own monster here, Brenda.

You know, you mentioned I used to trade online. And then fortunately through probably more luck than anything else, my account equity grew to such an extent that the broker became a key part of my trading. I could not rely on the broker not being available, my not being able to get out of positions.

And I think a lot of online traders are in that same boat. Their assets have grown such that saving a few dollars through their trades is nothing now. They need to get through. And that's when I think the live brokers are going to come back. You're going to see a renaissance in that area.

JOHNSON:

Gary, I hope that everyone is doing as well as you, Gary, but I kind of doubt it.

(LAUGHTER)

JOHNSON:

None of us could be possibly as smart as you.

SMITH:

People are doing better than me, though. That's the funny thing.

JOHNSON:

Yeah, yeah, I'm sure they're all doing better. You know, I think that people are a little ridiculous. I mean, every single broker stinks is basically what our survey said.

I think that people want a level of execution that you can't get in the professional markets...

HOENIG:

Or they make the mistake of waiting for the day of the move. You know, if you wait for the action to happen to try to call your broker or log into the site, you might have trouble logging in. But I think what a lot of people miss is placing orders beforehand. If you know you have a target-preference stock...

SMITH:

Whoa, whoa, whoa, their mistake is look, if you want to get through, what do you brokers say, oh, well you should have thought of that earlier? No...

HOENIG:

Gary, if you're not trading online, I mean, what happens if your broker doesn't answer the phone? I mean, that was the problem.

MADDEN:

Well, what brokers are going to make up for that, though. You've got to have...

SMITH:

Well, then you use a broker that's going to answer the phone.

HOENIG:

I know they take Gary's calls. We have no question about that.

SMITH:

They always take my calls.

BUTTNER:

All right, well, that's got to be the "Word on TheStreet." And if you want to find out more about our online broker survey, including who's first and who's worst, log onto

TheStreet.com

Web site, where you'll get an in-depth breakdown of the survey's results, all for free.

But up next, will the high cost of gasoline help to pump up the price of some stocks? Find out what the "Chartman" has to say when "TheStreet.com" returns.

BUTTNER:

Welcome back.

You hate to see those rising prices at the pump. But will they also fuel certain stocks? Let's ask the "Chartman."

Gary B. is a technical trader who works out of his home. Gary and his charts join us from Washington, D.C. And with us in San Francisco sitting in for Adam Lashinsky, columnist Aaron Task, who like Adam, actually tries to get the bottom line on the fundamentals behind a company.

Gary and Aaron do not own any of the stocks in this segment. Hi, guys.

SMITH:

Hey, Brenda, how are you doing?

AARON TASK, COLUMNIST:

Hey, Brenda.

BUTTNER:

Good, good. Sky high, that's where oil prices are. Bad news for consumers. But what about investors? Good news and bigger profits for oil stocks?

Gary, big oil driller

Halliburton

. That stock can't decide what it wants to do. The stock is all over the map. What do you say?

SMITH:

Brenda, you're becoming a technician. I can tell.

BUTTNER:

I am. Double top, any of those I can talk about, yes. Go ahead.

SMITH:

Well, I'll tell you, Halliburton is the quintessential manic-depressive stock. This is a stock we call it's just stuck in congestion, 35, 45, 35, 45. It keeps bouncing back and forth.

I really can't get excited about the three-letter stock of Halliburton right now. Of course, maybe it's a little bit better than a Nasdaq stock these days.

But I'll tell you what, I can get excited about Halliburton if it breaks through the congestion and moves about 45. Until then, I think it's a real snooze.

BUTTNER:

OK, Aaron, anything fundamentally that could push the stock above that level?

TASK:

Well, absolutely. Let's talk first about the major mergers that have gone on in the oil industry the last couple of years,

BP Amoco

,

ExxonMobil

. Now that those deals are done, those companies are going to start to be focusing instead of creating synergies in the new merger on actually doing business. And that's going to result in a lot of business, a lot of spending, that's going to go to companies like Halliburton.

Halliburton also did its own deal with

Dresser Industries

that's just recently been completed. That's helped Halliburton become more of a one-stop shop, also resulted in some cost savings for the company. They sold some Dresser assets and are using that money to pay down debt.

And finally, Halliburton has got a rosy earnings forecast. We're talking about 45% earnings growth over last year. And before you talk about, oh, easy comparisons, those earnings are supposed to go 68% next year.

BUTTNER:

All right, stock No. 2,

Chevron

. It's had a nice move of late, Gary. Where is it going next?

SMITH:

Well, it really has had a nice move like a lot of the Dow stocks. But here's the problem. Chevron is caught in a very large downtrend. It's fighting to get above that downtrend.

I`m almost ready to like Chevron. I want to love Chevron. I want to love the Dow stocks. But here's the problem. It hasn't broached that downtrend yet.

If Chevron can close solidly and stay in say the low nineties for a couple of days, I'm loving Chevron. Until then, it's kind of like Halliburton, I have to pass.

BUTTNER:

Aaron, Gary can't commit. That's his problem. We already know that...

TASK:

Right.

BUTTNER:

...He's almost ready to like this one. But what about you? This is not just a gas station on the corner. Chevron is doing a lot of work in oil fields as well.

TASK:

Oh, absolutely. I mean, they've got some great projects. This is what they do. They go out and get oil. They have some great projects in the former Soviet Union, in West Africa, and the Gulf of Mexico. And they're supposed to have some of the highest production increases in the industry this year.

Halliburton, excuse me, Chevron also trades at a discount to its main rivals. Part of that is because it got kicked out of the

Dow

. Part of that is because it didn't do its own major deal.

But its earnings are supposed to go 40% this year. And I think that's pretty impressive.

And if you like a little bit of New Economy with your Old Economy, Chevron is practically a dot-com. It's got an e-commerce venture with Oracle and a unit of

Wal-Mart

and its own e-commerce business for its exploration business.

BUTTNER:

Gary.

SMITH:

Aaron, Chevron.com?

TASK:

Chevron.com.

SMITH:

... aren't you stretching it a little bit?

(LAUGHTER)

TASK:

Well, that's just for people who just have to have some dot-com with their oil.

SMITH:

All right.

BUTTNER:

Almost all of us. All right, Gary and Aaron, thank you.

Up next, Home Depot has got what it takes to fix up your house. Can the stock help build your wealth too? Our guest says it can. "Stock Drill" is next on "TheStreet.com."

BUTTNER:

Welcome back. It's time for "Stock Drill."

Doing the drill, Thomas Madden, chief investment officer at Federated Investors. The two stocks on his list,

Home Depot

and

Ford Motor

. His firm invests in both.

And here to dig a little to see if those stocks really are buys for you, Gary B. Smith and Jonathan Hoenig. Gary B. has no positions in these stocks.

And Jonathan, well, thanks to a gift from grandma 15 years ago, you have a small stake in Ford, is that right?

HOENIG:

They're so small they're tiny, tiny.

SMITH:

$10 million, yeah.

(LAUGHTER)

HOENIG:

It wasn't that long ago.

BUTTNER:

OK, first

Home Depot

. Thomas, that stock is near a 52-week high. I mean, I love Home Depot. I spend my weekends there. But isn't the optimism about this stock already reflected in its price?

MADDEN:

Well, we really don't think so because they've got an opportunity, which they're acting on right now, to use the Internet and something called pro initiative to increase their share in the professional builder market. They currently have got something like 12% to 15% of that $80 billion market.

They've got fulfillment capacity. They've got a very vigorous approach so they're not going to get caught with cost overruns.

BUTTNER:

Right.

MADDEN:

We think they can really build a business more rapidly by using the Internet.

BUTTNER:

Right, and their financials are incredible as well.

MADDEN:

Very strong.

BUTTNER:

Gary, Home Depot got hammered earlier this year. But it's climbing back to old highs. you charted this one. What does the chart say about where it heads next?

SMITH:

Yeah, absolutely. Home Depot is like apple pie. You want to love it.

The only thing I would say, I agree with Tom. I don't know anything about the fundamentals. Let's just say he knows what he's talking about, and it's a great fundamental case.

The only thing I would tell viewers to do, if you want to go out and buy Home Depot on Monday, watch for a double top. I know it cratered a little bit on Friday as it tried to make its new 52-week high. I would just wait and see if it can burst through. Then I think have you have the green light.

HOENIG:

Tom, let's talk fundamentals. Let's talk fundamentals for a second here, Tom. New COO taking the helm there. How confident are you that the new management will be able to replicate the success of past management?

MADDEN:

Well, I think if you look at the overall record of this management, and as a customer, I have a sort of a personal view as well as a professional view. My sense is there is depth and breadth. And rigorous financial controls, that's really a key which keeps them in terms of return on invested capital making money. So I have confidence there.

BUTTNER:

OK, stock No. 2, Ford Motor. You're going to have to convince me on this one. It's mature, slow growing industry. And Ford is relatively expensive compared to other automakers. Why do you like it?

MADDEN:

Well, I think there are lots of reasons to like Ford. I think is, A, the second largest automobile company in the world. B, it's got the best brand portfolio of any company around. Maybe now it adds

Land Rover

to

Jaguar

and

Aston Martin

and

Volvo

.

HOENIG:

Tom, you think there's an M&A possibility here? We've seen a lot of consolidation in the automakers. And would

Ford

in your estimation be an acquirer or an acquiree?

MADDEN:

Well, I think they would be an acquirer. And of course, there's one other piece, which is their entry along with

GM

and

DaimlerChrysler

into this auto exchange which will have an IPO at some point in the next couple of years. And it don't think there's a dollar of that value in the current stock price.

This is a company which is basically trading at around eight times. It even has a dividend yield of about 4.5%. So...

BUTTNER:

What's that in those days? OK...

SMITH:

Tom, let me ask you a question. Did you just get into Ford, or have you held that for a while?

MADDEN:

We have held Ford for some period of time.

BUTTNER:

OK, Gary, get technical on us. Show us the chart.

SMITH:

Well, the reason I asked is that Tom had to ride it down a fair amount. I think now is really the time to buy. Or if I were Tom, if I could be so...

MADDEN:

Presumptuous.

SMITH:

...aggressive...

(LAUGHTER)

SMITH:

...I would say, more now as I am known to be, I think Ford is bursting up. I really like Ford right now, Tom, I'm with you.

MADDEN:

Super. Good.

BUTTNER:

OK, Thomas Madden from Federated Investors, thanks again for doing the drill.

But up next, the Nasdaq has been to the moon and back in the last few weeks. Where is it headed next? "Predictions" when we come back.

BUTTNER:

Welcome back.

So what's more exciting than the Final Four this weekend? How about

TheStreet.com's

own starting lineup? It's time for "Predictions."

OK, you know them by now, right? From TheStreet, Dave Kansas and Cory Johnson. In Washington, Gary B. Smith. And in Chicago, Jonathan Hoenig.

OK, Dave, you lead off. Let us know what's going to happen.

KANSAS:

Michigan State

. No, no, I'm sorry, I'm sorry. I really like the Nasdaq is going to put at a bottom. But it's going to stay above 4000. I think we're going to get a quick shot of that fear Jonathan was talking about, especially on Monday.

I think the newspapers over the weekend and Monday, the magazines are really going to start to sow this fear thing. And that's going to help the Nasdaq put in a bottom.

SMITH:

What kind of prediction is that?

BUTTNER:

Put it in the bottom, but how quickly to the top?

SMITH:

Stay above 4000 for how long?

KANSAS:

Well, until it gets to 6000, Gary, because I said it would go to 6000 before it goes to 4000. So of course, it has to stay above 4000 so it gets to 6000.

SMITH:

I thought you said 5000.

KANSAS:

No, 5000 was another prediction...

BUTTNER:

All right, Gary...

(CROSSTALK)

BUTTNER:

I'm sure he's writing them down. OK, Gary, you tell us what your great prediction is then, huh?

SMITH:

Here's a difference between an editor-in-chief and someone who really works for a living...

(CROSSTALK)

SMITH:

First of all, the Nasdaq, it's going to keep on ramping. But it's only going to go to 4800 this time. And then I think it's going to drop back down to 4000 and might keep going further.

HOENIG:

Where's the leadership there, Gary? Is it the familiar names? Is it the old tech? Where is the leadership? Is it spread out?

SMITH:

No, it's the Ciscos. It's the Oracles. It's the Dells. That kind of the stuff that makes up the Nasdaq. I mean, the big cap stuff. And then I think it drops. I think the party is over.

BUTTNER:

OK, and your time frame for this as well?

SMITH:

Oh, I've got to put a time frame...

BUTTNER:

Of course you do.

(LAUGHTER)

KANSAS:

I'm the editor-in-chief, don't you forget it.

SMITH:

...4800 by end of April. In fact, sooner. 4800 probably in the next two weeks...

BUTTNER:

OK.

SMITH:

...and then 4000 by end of May.

BUTTNER:

All right, Jonathan, go ahead.

HOENIG:

There's more fear here than we thought. A lot of people bearish on the Nasdaq. I think

Philip Morris

is going to be a huge out-performer this year. Did I say Philip Morris? Absolutely...

BUTTNER:

Philip Morris?

HOENIG:

...They're giving this stock away. Let me tell you, it yields 9%. It's almost like you can't afford not to buy Philip Morris.

BUTTNER:

It's at 21 right now. So where is it going?

HOENIG:

The stock is trading at 21. I think you could see it hit 50 before the end of the year.

JOHNSON:

Oh, come on. What, they're going to do a...

(CROSSTALK)

JOHNSON:

... I don't think so.

(CROSSTALK)

SMITH:

There's going to be a problem there.

HOENIG:

Listen, the market hates uncertainty. And once the question about litigation is up, listen, you're getting into the food business for free. It's almost as if you can't afford to buy now. It's yielding 9%, for Christ's sake, come on.

BUTTNER:

There we go...

JOHNSON:

That's...

BUTTNER:

... spoken like a value guy. OK, Cory, your turn.

JOHNSON:

... that's an old one. Well, you know, I'm Mr. West Coast, Mr. High-tech obscenely priced stocks. My high-tech stock here is

Kodak

. I think that Eastman Kodak is actually going to start to be seen as a technology company instead of the failing photography that it is. This thing has been just such a dog for so long.

I see there's high tech there. There's fiber optics there. There's patents galore. They have more scientists. Nobody is going to (INAUDIBLE)...

HOENIG:

What's the catalyst, what's the catalyst?

JOHNSON:

... It's going to start to move because there's nothing else moving the stock. I think that if you look at

JDS Uniphase

, if you look at

SCLI

(ph), they love Kodak. And they talk about Kodak as an important partner.

BUTTNER:

All right, we want...

SMITH:

All right, Cory, you should get together with Aaron and Chevron.com...

(LAUGHTER)

(CROSSTALK)

BUTTNER:

... OK, we -- sorry, guys. We want you to tell us what you think. Just go to

TheStreet.com

Web site and rate the "Predictions" on the TV page. And while you're at it, send us a question or a comment.

You`ll also find up-to-the-minute market information. And don't forget TheStreet.com's exclusive online broker survey will be there all week as well. Find out which online broker is first, which is worst, and which is best for your investing style.

See you again next weekend. And until then, invest wisely. Thanks for joining us.

END

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