Participants on April 29 included host Brenda Buttner, Herb Greenberg, Gary B. Smith, Jonathan Hoenig, George Mannes, Ben Holmes and guest Scott Bleier . The transcript is unedited, and phonetic spellings are indicated with (ph).

BRENDA BUTTNER, HOST:

Up next, information you need to make smart investing decisions.

Boy, talk about split personality. The

Nasdaq

just can`t make up its mind. Up big one day, down dramatically the next. The question to ask: Where is the bottom?

And late Friday, news that

Microsoft

may be cut in half. What happens to the stock and the market on Monday? Get the "Word on the Street."

Plus, is now the time for you to get in on IPOs that sizzled then fizzled? We'll ask the "Chartman."

Plus "Predictions" you can't afford to miss. But first, this.

BUTTNER:

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

A move to break up Microsoft adds more uncertainty to the stock market. Let's find out what to expect Monday with the "Word on the Street."

And with us from

TheStreet.com

, senior columnist Herb Greenberg, senior writer George Mannes. Joining us from Washington, our "Chartman" Gary B. Smith. And from Chicago,

TheStreet.com

columnist and money manager Jonathan Hoenig, the "Capitalist Pig" -- that's what he calls himself. That's not our nickname for him.

(LAUGHTER)

JONATHAN HOENIG, "CAPITALIST PIG":

I call myself proudly that, Brenda. Say it like you really mean it.

(CROSSTALK)

BUTTNER:

Scott Bleier, chief investment strategist at

Prime Charter Brokerage

here in New York.

Welcome everyone. First topic...

HOENIG:

Hey, Brenda.

BUTTNER:

... Microsoft under siege. After the bell Friday, the government formally asked a judge to break up the giant into two companies.

Herb, this is going to go into appeal. It will last for years. But will the impact on the stock and the market be immediate?

HERB GREENBERG, SENIOR COLUMNIST:

Wake me when it's over, Brenda. This is...

BUTTNER:

What are you talking about? This is a widely held stock. It's affected 80 million investors.

(CROSSTALK)

GREENBERG:

I think I just gave everybody -- what everybody thinks is this thing is boring the heck out of us at this point. Here's the reality...

BUTTNER:

Is a 50-point drop for you?

GREENBERG:

... it's already done that. Brenda, I don't this affects -- what happened on Friday is factored into the stock. I don't think it affects Microsoft. I don't think it affects the market.

The uncertainty is the only thing that will affect anything regarding this company. And that's going to go on for years. This is going to trade on earnings and anything else that comes along.

SCOTT BLEIER, PRIME CHARTER:

So does it go up Monday or not?

GREENBERG:

No, I don't think it -- I don't -- yeah, the uncertainty is gone. We know we`re going to do it.

BLEIER:

Microsoft is going lower. And I'll tell you why. Because if the stock goes lower, there will be a cry throughout the land to mutual fund money managers to congressmen to senators...

GREENBERG:

The conspiracy theory.

BLEIER:

... It's not the conspiracy theory. Bill Gates doesn't like this. Nobody likes this at Microsoft. The stock is going to work its way to 60 bucks. It's 70.

HOENIG:

Wait a minute, though. I want to ask a question, actually, to Gary. Gary, have you seen the gaps in the chart of Microsoft? And do have any indication that these gaps might be filled?

I mean, the stock is down, what, 40% to date? There are a lot of gaps to be still filled on the chart. What is your work telling you in that sense?

BUTTNER:

Gary.

GARY B. SMITH, "CHARTMAN," CONTRIBUTING EDITOR:

Well, I thought Microsoft when we talked about it a couple of weeks ago is working lower. But I'll be honest with you, after seeing the reaction after hours, I think it's just going to move sideways. I don't see it moving up or down.

BUTTNER:

It was up a bit after hours.

GEORGE MANNES, SENIOR WRITER:

As much as I hate to agree with Herb Greenberg...

(LAUGHTER)

HOLMES:

... I'm absolutely with him. I think this thing has been covered more than Monica Lewinsky's dress. So I don't think there is any surprise in the stock right now.

BUTTNER:

So this is not a buying opportunity?

HOLMES:

No, this is a hold, hold...

BUTTNER:

And if you hold it?

HOLMES:

... go-to-sleep opportunity for both Microsoft and the market.

HOENIG:

Read this book, people.

BUTTNER:

All right, moving on to the up-and-down Nasdaq.

Atlas Shrugged

? I knew you would like Ayn Rand. How did I know that?

HOENIG:

I'm sending it to everyone involved in the trial.

BUTTNER:

It finished strong last Thursday and Friday. So does that mean we've seen the bottom?

Since its high on March 10, a mere month-and-a-half ago, it's been mostly a bumpy ride down, bumpy because we've seen some strong rallies in that time, only to see those gains evaporate with an even stronger sell-off. Gary B., how does an investor spot the bottom in this bear market? I guess we're all "Chartmen" now because this is a very basic technical term.

SMITH:

Well, you know, last week, we were all so bearish on it. That should have marked the bottom right there.

BUTTNER:

Well, I think so, yes.

HOENIG:

And it may have.

SMITH:

Except for

Dave Kansas'

mom. I'll tell you what, I think we've put in a bottom.

BUTTNER:

You do?

SMITH:

I think that -- yeah. I think that...

HOENIG:

Gary, you're wrong.

BUTTNER:

Wait a minute, Jonathan...

SMITH:

... Just give me a second before you dump on me...

BUTTNER:

... hold on a minute. Go back and read your book. Gary, tell us -- finish your answer.

SMITH:

... You had a long down -- thank you. You had a long downtrend. The last couple of days, the Nasdaq near the end of the week spiked up.

The key point for me is when a stock or an index should go down and it should have gone down with that GDP and the government news and it didn't go down and it went up, that means the index is going to go up further. I think the bottom is done.

BUTTNER:

You've been very bearish, Gary. Are you buying now?

SMITH:

I have been. I am a bull. I am fully 100% back to being a bull right now.

MANNES:

I have spent the last few weeks talking to people saying, "Oh, this stock I own, it's had a ridiculously low price. I can't believe it, I'm buying it now." And then a week later, the stock is lower. I think it's really dangerous to call bottom right now, especially

Yahoo!

, for example, trading at 240 times 2001 earnings.

BUTTNER:

They're still very expensive stocks.

MANNES:

There's still room to go down.

BUTTNER:

Herb, you're usually a bear. Do you look for bottoms?

GREENBERG:

Not for bottoms. I look for interest rates. Interest rates are heading higher. The

Fed

is going to raise rates at some point.

HOENIG:

And Nasdaq cares.

GREENBERG:

And Nasdaq will care. When it happens is my guess.

BUTTNER:

All right, Jonathan...

(CROSSTALK)

HOENIG:

Gary, you mentioned we were here last week. We did a show that was preempted by, oh, Elian Gonzalez. And the reason we haven't seen the bottom in the Nasdaq is because if it was truly a bottom, our show would have not been pre-empted. It's true. It's true.

BUTTNER:

Well, what do you -- now Jonathan...

HOENIG:

My real fear in this marketplace. Not until people are truly scared.

SMITH:

No.

(CROSSTALK)

SMITH:

It's done. Are you talking your position. Are you short?

HOENIG:

Listen, Gary, everyone knows I've been short since mid-March. And I remain...

SMITH:

Well, you're talking your, I'm talking mine I guess... (CROSSTALK)

HOENIG:

I am absolutely talking my position, Gary.

BUTTNER:

Scott, are you buying now?

BLEIER:

We bought some stocks on the interday reversal that Gary alluded to. That kind of interday reversal just means you should buy the leadership stocks. You should buy the institutional favorite names.

This big correction, the Nasdaq crash, has taken out a lot of the marginal players...

BUTTNER:

Right.

BLEIER:

... the marginal stocks and the marginal players, even though a lot of big boys who felt they had to get into the game and are now out of the game very quickly, the bottom line is that the speculative mania has been squashed for now, even though stocks still go up 15 points at a clip.

But I think what we have to look forward to going forward for the rest of the summer is lessening volatility, not increasing volatility.

BUTTNER:

That would be ...

BLEIER:

And that will surprise Wall Street.

BUTTNER:

That would be a welcome change. All right, that's the last word from "Word on the Street" this week.

Scott Bleier, thanks. We'll see you and your stock picks in a couple of minutes.

But next, miss out on the

Palm

IPO? You haven't missed much. But could now be the best time to buy in? The "Chartman" is next.

BUTTNER:

Welcome back.

You know the story. A new stock comes out, it goes sky high. Check back in a few months though, and the stock is lower than the IPO price.

Don't touch it, or time to buy? Just ask the "Chartman."

Gary B. Smith trades for a living from his home using the charting method. Gary joins us from Washington. And filling in for Adam Lashinsky from Denver, Ben Holmes. Ben is the founder of

IpoPros.com

, a Web site that is all IPOs all the time.

Gary and Ben do not own any stocks in this segment.

Ben, first stock, Palm. It came out with so much hoopla last month. And after a huge spike out of the gate, it closed Friday at about 27, well below its IPO price at 38. Good buy now?

BEN HOLMES, IPOPROS.COM:

I like this stock. I've liked it from the beginning. And I think people need to step up and own the thing.

BUTTNER:

And why is that?

HOLMES:

Well, you've got to look at the story and just realize that Palm is all about basically growth. It's about the hottest sector of growth in the market right now.

The revenues are absolutely soaring. The profits, Q1 up 116& vs. the same period last year.

BUTTNER:

Right.

HOLMES:

Profits, up 66%. Wireless group is about the only excitement left in this market right now. You've got to own Palm.

BUTTNER:

So it's the best play in this market you're saying.

HOLMES:

I think it's great.

BUTTNER:

All right, Gary, it hurts even looking at this chart. Ouch.

SMITH:

You know, it really does. You know what, Brenda, this reminds me of? Remember this movie many years ago,

Weekend at Bernie's

where they had to pretend this corpse was alive for the whole weekend, these two kids?

Palm is Bernie. Palm is the dead corpse as far as I'm concerned.

BUTTNER:

Remind me not to go to the movies with you, Gary. All right, go ahead.

SMITH:

Well, it was a funny movie. But the Palm chart is not funny.

What you have is a stock in a steady, just beleaguering downtrend. It is showing zero signs of life.

Look, Ben might be right. Maybe it's the greatest darn stock since anything, since

IBM

,

AT&T

, Microsoft. But this thing is showing no signs of life.

I would say -- I would agree with Ben. Go out and buy it once it spiked up and breaks that downward trend line. Otherwise, I wouldn't touch it. Now it not the time.

BUTTNER:

Ben,

Somera Communications

. You like the looks of their numbers, of their bottom line. Why is that?

HOLMES:

Absolutely. Again, it's a super favored group.

Telecom

is incredibly in favor. Look at their revenues. Their revenues are growing.

Look at their profits. Their profits are growing every year. I can go back in the filings to '96 and I see profitability increasing every year.

They sell to the carriers. You've got to own these guys.

BUTTNER:

Gary, the stock is struggling. It's trying to go higher. But how's the chart look?

SMITH:

Right, well, you know, Ben has picked up Adam's line. It's great, the story is great, yadda, yadda, yadda.

But I'll tell you what, the chart stinks. It moved sideways for a while. But then like a lot of other four-letter stocks, it just got crushed in April.

Now as you allude to, Brenda, it tried to make a comeback to try to get above that resistance where it broke down. And it just got turned away.

So I would say, look, let's just say Ben is right. We'll give him the benefit of the doubt. At least wait until this stock makes another move and tries to break above resistance into, say, the $11.50, $12 range. Then maybe you have a good buy. Otherwise, again, like Palm, I would just avoid the stuff right now.

BUTTNER:

Ben, where do you see this going? I mean, what's your price target?

HOLMES:

Well, I'm not a chart guy. I mean, Gary has cups and saucers and hip rafters with eyebrows and all these things. It's a company that makes money. And they make more and more money every year, year after year.

Buy this stock and own it. You've got to own the companies that are leading the market. You have to.

SMITH:

But Ben, if it's such a compelling story -- why are people -- why is it a $9 stock?

HOLMES:

Timing. Timing, Gary.

SMITH:

Timing. That's my line. I'm the timing guy.

(LAUGHTER)

BUTTNER:

All right, Gary and Ben, thank you. And we'll see you both a little bit later.

Well, you like what you heard? You can get more IPO news and analysis at IpoPros.com, part of

TheStreet.com

network.

Up next,

Costco

can save you money. But can its stock help you make it? Find out when "TheStreet.com" returns.

BUTTNER:

Welcome back. Let's do "Stock Drill."

And our guest stock picker today, Scott Bleier, chief investment strategist at Prime Charter Brokerage. He says check out

Motorola

and Costco. Bleier doesn't own either stock, though clients of his brokerage firm may.

Here to put those stock picks to the test so they can decide if they are right for you, from

TheStreet.com

, Herb Greenberg and Gary B. Smith.

Thanks so much, Herb and Gary, for joining us.

Motorola, great wireless business. They're trimming the fat out of their chips. And basically they've been hit hard in this market.

BLEIER:

Actually, this is a stock we've been touting since $40. The bottom line is they've got their fingers in all the right pies: semiconductor, cellular and wireless, satellite -- some good, some bad -- and good management turnaround, selling relatively cheaply compared to other technology stocks. It is a sleep-well-at-night technology name.

GREENBERG:

Scott, I cannot disagree that this company has done a great job turning itself or attempting to turn itself around.

BLEIER:

50% earnings per share growth. Upward revisions.

GREENBERG:

Great. But there is that -- you mentioned satellites. And there is that thing called

Iridium

. The liabilities, potential liabilities, what, Scott, why doesn't that bother you? We're talking billions of dollars.

BLEIER:

Investors don't care about that.

GREENBERG:

Not until they have to. What happens if this comes back and bites?

BLEIER:

They're going to take a write-off. How many Wall Street firms...

GREENBERG:

... That's a big write-off. We're talking billions of dollars here.

BLEIER:

... Absolutely. But it doesn't matter. It doesn't matter in the minds of investors because we're looking at the future, not the past. The stock has laid there for a long time.

BUTTNER:

Gary, you...

BLEIER:

Five years, the stock did nothing. Only the last year it took off. It's still selling at a discount to the market, a discount to its peers. And this buy of

General Instruments

is huge.

BUTTNER:

Gary, you take a look at the chart. What does it say?

SMITH:

Well, it says that Scott must be the greatest sleeper of all time if he can sleep with this stock ...

(LAUGHTER)

(CROSSTALK)

BUTTNER:

Oh, my God.

SMITH:

First of all, the thing gapped down a few weeks ago. Then it's locked in a long-term down trend. It's tried to rally.

It's just -- this is a mess. I mean, Scott...

(LAUGHTER)

BUTTNER:

Tell us what you really think, Gary.

SMITH:

I mean, if you can sleep well with Motorola, I would be up all night with this stock.

BLEIER:

I have news for you. If you looked at the chart past three months, past a three-month chart...

SMITH:

Well...

BLEIER:

... you would see that $100 is a big number. It was where it was literally at the fourth quarter of last year. And as the stock rallied, it got ahead of itself like so many technologies have done, but a lot less out of itself, and here we are at 120 where we were in January. I think it can go back up to its old highs.

BUTTNER:

Discount retailer Costco where you can buy a package of toilet paper that will last you for 20 years. This retailer really is doing better than the rest of the sector. Why else do you like it?

BLEIER:

This is the

Wal-Mart

,

Home Depot

concept. This is the number three retailer in investors portfolio, mutual fund, money manager investors, selling at 15 times. Slim margins like most retailers, but a concept that has been brilliantly executed, a wonderful management team, continued growth, a good chart, Gary.

I mean, I know that in a rising interest rate environment, you'd want to sell a retailer. But...

BUTTNER:

Well, let's ask Gary to see that. Gary, I know you do the shopping in your house. What do you think of this chart?

SMITH:

Well, I didn't know about the toilet paper thing. I'll have to investigate that this week.

BLEIER:

You've never been there, then.

SMITH:

No, I've been to Costco. I love Costco.

And Scott's right. The chart is fine. Look, I've seen better charts. But I think if Costco can -- you know, it made a move out of resistance. I think if it can hold itself in the mid-fifties -- it started to slip a little back and forth last week. I think the chart is fine, and probably so is the stock.

GREENBERG:

You know, one question I have on Costco, and I'm a Costco fan. And they've done a great job, and they have some great initiatives.

But when I go to my regular supermarket now, they're giving me great discounts, sometimes $10 off, $20 off. I find I'm saving so much from these stores, that could affect people going to Costco.

BLEIER:

Your supermarket doesn't offer what Costco offers. And Costco is the American dream. Costco is the American way.

(LAUGHTER)

BLEIER:

You can go to your supermarket three times a week, and you'll go to Costco on the weekends...

BUTTNER:

All right, all right...

BLEIER:

... And you'll spend a lot more money in Costco than you will in your supermarket.

BUTTNER:

I feel we should be standing, Pledge of Allegiance here.

BLEIER:

God bless America.

(LAUGHTER)

BUTTNER:

Scott Bleier from Prime Charter Brokerage, thanks for being here today. We'll keep track of your stock picks.

And after this break, want to know where the Nasdaq will be in two weeks. You'll hear "Predictions" next.

BUTTNER:

Welcome back. What's up next? Our experts will tell you what they think as they lay it on the line with "Predictions."

Back with us from

TheStreet.com

Web site, Herb Greenberg. In Washington, Gary B. Smith. In Chicago, Jonathan Hoenig. And in Denver, Ben Holmes.

Herb, let`s get your prediction first.

GREENBERG:

Brenda, I believe when the Fed meets on May 16, they will take the full leap, and they will raise rates a full half a percentage point.

BUTTNER:

Go out on a limb here. The market already knows that it's going to do that.

GREENBERG:

No, but you know what? Some people still think it's going to be a small amount. And I think a half a percentage point is a big -- it's a psychological barrier of sorts. And I think you watch, people may actually react at least in the beginning negatively.

SMITH:

When is that meeting, Herb?

BUTTNER:

Jonathan, you've...

GREENBERG:

Pardon?

SMITH:

When does the Fed meet?

BUTTNER:

May 16.

GREENBERG:

May 16.

SMITH:

May 16.

BUTTNER:

Why, will you be watching that carefully, Gary?

SMITH:

Well, I need to know if it's going to impact my prediction.

(LAUGHTER)

BUTTNER:

Gary, well, tell us your prediction.

SMITH:

Well, I think -- I`ve been a bear for weeks. And I've been nailed for being a bear. People thought I was so pessimistic. But I was just pessimistic because the market was going down.

I think the back of the bear is broken. I don't know if it's broken permanently. But it is broken.

Last Thursday and Friday proved that to me. I think we go Nasdaq to 4200. After that, I don't know. But I think we get there within the next two weeks, which probably coincides with that Fed meeting.

BUTTNER:

So you have some long positions now? You were just short for weeks.

SMITH:

I was short for weeks. I am 100% long right now.

BUTTNER:

Wow. OK, that's an indicator. Jonathan.

HOENIG:

That's not saying much.

(LAUGHTER)

BUTTNER:

Now you.

SMITH:

Well, we'll see.

HOENIG:

I think -- you're right. Gary, you're right, we'll see.

You know what? Time to take the money and run on

Oracle

. No question here. I see lower prices for the stock, which is currently about 80 bucks a share.

SMITH:

Are you short Oracle?

HOENIG:

Well, to be honest, I am not short Oracle. But I will short it Monday morning.

BUTTNER:

How much -- now this is one of those blue chip techs. Why don't you like it?

HOENIG:

Technically, I think the stock looks week. There's some gaps to be filled.

Also, Larry Ellison on the cover of

Business Week

doesn't exactly bode well from a psychology point of view. So I think it's time to take the money and run. I could see lower prices for Oracle, no question.

SMITH:

Don't they come out with earnings soon?

HOENIG:

Gary, and what have we seen from stocks? They're selling off on the earnings. So what does that mean?

SMITH:

Oh, yeah.

HOENIG:

Coming with good earnings, and they're selling off. So...

(CROSSTALK)

BUTTNER:

Let`s hear from Ben. Ben?

HOLMES:

I'm going to be the first to say this. But I see Koop,

drkoop.com

, getting picked up by one of the portals. I think they're running out of cash really quickly. They've got a couple of months left.

And I think someone is going to step in and buy the brand. I don't think they'll let this thing just go to zero.

GREENBERG:

Hey, Ben, this is Herb. If that happens to a company like that, does it cause the stock to really go up that much, or is it already factored into it?

HOLMES:

I have no idea. I know it's trading with something less than a Big Mac Value Meal per share.

BUTTNER:

There is nowhere else to go but up.

(CROSSTALK)

SMITH:

... Ben loves these life support stocks.

HOLMES:

Absolutely. Absolutely. Oxygen.

(LAUGHTER)

BUTTNER:

All right, gentlemen, thanks so much. And now that you've heard their predictions, time for you to tell us which one you liked. Just log onto

TheStreet.com

Web site TV page and rate the predictions and send us a question or a comment.

Well, that`s it for this edition of "TheStreet.com." Thanks for joining us. We'll see you here again next week. Until then, we hope you invest wisely.

END

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