Chris Edmonds Martini Chat on Yahoo! Sept. 27

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Chris Edmonds chatted on Yahoo! Thursday, Sept. 27, at 5 p.m. EDT. To hear the event, click here.

Chris Edmonds:

It is Thursday, September 27, 2001, 5 p.m. on the East Coast, 2 p.m. in the West and time, once again, for

TheStreet.com

Martini Chat, a weekly look at the markets, the economy and both the serious and sometimes lighter sides of life on Wall Street.

I'm your host Chris Edmonds, contributing editor at

TheStreet.com

, coming to you live from our Atlanta bureau. My co-host, Eric Gillin, is off today celebrating the Yom Kippur holiday. He'll return next week.

Filling the co-host seat this week is Lisa,

TheStreet.com's

personal finance editor, live in our Wall Street newsroom.Welcome, Lisa -- Nice to have you here.

Lisa Meyer:

Nice to be here.

Chris Edmonds:

Also joining us around 5:20 will be Yi Ping Ho, our resident market news guru from our Wall Street headquarters. She'll have a complete wrap-up of the day on the Street and a look ahead at tomorrow's news.

We have a packed show today as we work to dissect the markets and what they mean to you, as investors. Joining us shortly will be Dan Pickering, director of research at Simmons & Co, a Houston energy boutique, to discuss the recent turmoil in the energy markets and this week's OPEC meeting.

Then, at the bottom of the hour, Tom McIntyre, president of Dessauer & McIntyre Asset Management, a Cape Cod investment firm, joins us to discuss recent market action and his best ideas for the weeks and months ahead.

We'll wrap the show with a Roundtable discussion and your questions for Lisa and me, as well as Tish Williams, our resident tech guru, live from our San Francisco bureau.

And, all of our guests will be taking YOUR questions -- so shoot us your queries for our guests and we'll get to as many of them as possible.

But, first, this commentary...

I must say, I'm trying to fill big shoes here with my partner, Eric Gillin, on holiday. His weekly toasts to Wall Street have become near legend in very short order, and I won't even try to match his creative wit and spirit.

Rather, a few comments on a market and an economy that seem to be searching for direction and, more importantly, investors and economists that seem to be searching for both comfort and meaning with the Dow hovering around 8500 and the Nasdaq grappling with 1400, levels most of us thought we would never revisit.

To posit

that the events of September 11th have changed the financial markets is tantamount to suggesting climbing Mount Everest is like a walk in the park. In fact, since that sunny Tuesday morning in downtown Manhattan exploded into a mist of horror, Wall Street has remained in a haze, clouded by memories past, present and -- for many -- the fear of what lies in the future.

It is, indeed, frightening. I sit everyday nearly a thousand miles from the heart of Wall Street and the wonder of "what happens next" never escapes my conscious thoughts. The fear is normal -- indeed human -- and it is incumbent on each of as humans to acknowledge that normalcy and the impact that lingering fear is likely to have on markets and, more importantly, market participants in the coming weeks.

We spent so much time pleading without our collective selves that we must return to normal that maybe we didn't take the time to recognize that what "normal" means was forever changed the morning of September 11th.

There are signs of "the new normal" all around us: a new meaning of "security": controlled access to our homes and workplaces, more scrutiny and less privacy in public places and soon to be national guard troops guarding our airports and armed marshals protecting our airspace.

And, maybe we didn't take the time to realize that the fear we all feel is very normal given a set of circumstances that were not even imaginable before the second Tuesday in September.

While a return to our daily routines is an important part of "returning to normal," that is more about "institutional normal" rather than "individual normal." And, while it was heroic that Dick Grasso

chairman of the NYSE and his team were able to soldier on in the wake of terror is testament to the power and prowess of our financial institutions, the very fabric that makes the United States and -- without question -- New York the financial capital of the world.

Yet, let's remember the fibers that compose the fabric are the countless individuals that participate in the markets, the buyers and the sellers that actually create a market. And, while the phone lines, the computer terminals and the old squeaky wooden planked floors at the corner of Wall and Broad that house this thing we call the New York Stock Exchange are "back to normal," "normalcy" as a personal concept is in various stages of repair.

That means market participants will act in ways that are not necessarily "normal," at least in the way we understood at the beginning of this month. The volatility -- the sags and surges -- will become less as time continues to heal. But, fear begets fear and that personal fear now turns to the inside, to corporate earnings, to layoffs, to sustainability, to all the questions and doubts that such an event can cause.

Let us also recognize that the grieving process will likely continue for some time. Scores of the personalities that defined this market -- our friends, our colleagues, our families -- are still missing and, over time, will be pulled from the rubble only to remind us -- what may seem at times endlessly -- of the terror of that dark Tuesday in September.

Our institutions are returning to normal. Ground zero won't know "normal" for some time. And, individuals -- the participants who make the markets -- are in various stages of the transition. To understand that -- to understand the fibers of the markets -- is to, in some metaphysical way, better understand the markets themselves in the past two weeks and likely in the weeks ahead.

A couple of more specific market notes before we get to our first guest, Dan Pickering of energy boutique Simmons & Company.

The economy is far from the normal we would hope for. This morning we were greeted with news that initial jobless claims for last week rose 450,000, the highest level in nine years, another sign the economy is limping.

New York reported an increase of 11,000 jobless claims in the wake of the September 11 attacks, and the Labor Department stated that more filings are expected. Michigan auto plants were also hit with more filings, as some plants closed due to the slowdown of parts shipments coming from Canada.

Durable goods orders fell 0.3% in August, compared to a revised decline of 1.1% in July. These data are pre-Sept 11 and show that the underlying trend in orders remained weak in August.

Yet, housing markets remain resilient. Total home sales -- existing homes plus new houses rose to an annual pace of 6.40 million in August, surpassing the all-time record from March. This shows that the housing market was humming before the September 11 events, but lower sales should be anticipated in coming months. The National Association of Realtors indicated that sales were slowing in September with the existing home sales release this past Tuesday.

Chris Edmonds:

One other quick note. The Organization of the Petroleum Exporting Countries, or OPEC, announced today that it would not lower production targets, even though oil prices have slid below their $25 per barrel price target.

The cartel was likely influenced by Saudi Arabia's call to wait on any production adjustments until there is more certainty regarding U.S. retaliation against the recent terrorist attacks in Washington and New York

OPEC has agreed to revisit both the production levels and price target at a meeting now scheduled for November in Vienna. Oil prices hovered around the $22.40 level, up from recent lows but way off of annual highs closer to $30 per barrel.

That's a good segue to our first guest. Dan Pickering is the director of research at Simmons & Co., a Houston-based energy investment boutique. Before joining Simmons, Dan ran the Fidelity Select Energy Service Fund and Select Natural Gas Fund, and was Fidelity's senior oil service and exploration and production analyst. Before business school at the University of Chicago, Dan was trained as a petroleum engineer and worked for ARCO Alaska in a variety of engineering functions.

Dan is also a member of the

TheStreet.com

Energy Roundtable and a frequent contributor to much of our work on oil, gas and power.

He joins us today from Austin, Texas. Dan, welcome to

TheStreet.com's

Martini Chat.

Chris Edmonds:

What a difference a few months makes, let alone a year. About this time last year we were staring at the prospects of $40 oil and $8 gas. Now, we are looking at $20 oil and $2 gas. What happened?

Dan Pickering:

Two things occurred in tandem. First, earlier this year high prices, particularly for natural gas, forced some energy-intensive industrial users to cut back production of their products -- which lowered demand. This was most notable in fertilizer and chemicals.

In recent months, additional softness in the U.S. and worldwide economy have further hurt demand. So the supply/demand balance has softened and prices have fallen as a result.

Chris Edmonds:

The stocks have followed, with so many energy service, exploration and production companies approaching setting new lows. Is the selling overdone?

Dan Pickering:

The selling is a rationale response to fears of a falling economy, but a bit overdone to the downside -- value has emerged. We believe the stocks at these levels are currently discount crude falling to the $15/bbl level and natural gas staying around $2/mcf.

Chris Edmonds:

There is a lot of talk about the impact of a Middle East military action on the price of oil. If the U.S. stages an offensive limited to Afghanistan is it likely to have any impact on oil prices?

Dan Pickering:

Very little impact. On the supply side it is unlikely to physically disrupt the flow of crude from the Middle East. On the demand side, a war in Afghanistan won't require a huge amount of crude or gasoline to keep the military machine in action.

Chris Edmonds:

What if the conflict expands to other Middle East countries like Iraq orif the fighting somehow engages other OPEC nations?

Dan Pickering:

Then all bets are off. Crude would move back toward $30 on fears of supply disruption and could conceivably skyrocket if supply disruptions actually occurred -- either from war activities or embargoes by Middle East

countries.

Chris Edmonds:

At this week's OPEC meeting, the cartel seemed ready to hold production at current levels but also defend its price band in the $22-$28 range with a target of $25. With demand so weak, can OPEC defend its current price target while holding production steady?

Dan Pickering:

Not a chance -- demand is falling on the margin and price will follow. If supply stays constant. But ... read between the lines. OPEC is not changing quotas, but looking for higher compliance from member countries. This would reduce supply and boost prices without having to negotiate internally within OPEC or justify the action externally with allies like the U.S.

Chris Edmonds:

Let's turn to natural gas for a moment. As recent as this spring, there was talk about gas demand soaring in summer and prices eclipsing $10. That demand -- largely a result of increased demand from new power generation -- never materialized. What happened and is $2 gas here to stay?

Dan Pickering:

Power generation demand did increase ... but that was offset by a decline in industrial demand that was discussed earlier (fertilizer, chemicals, glass, paper). Therefore, inventories of natural gas built and prices fell. $2/mcf gas is with us until demand recovers (2H'02), colder than normal winter weather shows up (tough to invest on the weather) or supply falls.

We think supply will fall quickly as drilling activity falls dramatically over the next few months. We model gas prices back over $3/mcf by the end of 2002.

Chris Edmonds:

What about power? The new independent power producer has figured heavily into demand forecasts. Yet, this week AES warned and the power-energy convergence stocks are trading near 52-week lows. Was this the latest new economy fad, or do the IPPs now represent attractive investment opportunities.

Dan Pickering:

Remember that AES is primarily an international player. The domestic power business is still a viable investment thesis. A U.S. recession will mean fewer new plants are needed, but the U.S. power grid is still tight. Current California debacle and slowing economy will put new plants on hold, which will also keep the power business in equilibrium.

We prefer the diversified players in the power business -- Dynegy, El Paso, Williams and Enron over the pure play IPP's like Calpine.

Chris Edmonds:

So, as an investor, what do you do today? Too early to buy, too late to sell. Should you just avoid energy altogether. Doesn't look like this time was so different after all.

Dan Pickering:

Diversified power stocks are trading at lower levels than utilities; oil and gas stocks discount "scorched earth" commodity pricing. It is safe to say that energy stocks have now gotten cheap. Cheap stocks can always get cheaper; cheap stocks can take a while to rebound.

We are urging our value-oriented investors to average into energy stocks. This may not be an exact bottom, but we are close. Energy stocks can double from current levels over the next 2 years. That is attractive risk/reward. A good rule of thumb (although tough to live by) is "Buy when it REALLY hurts" ... right now it hurts.

Chris Edmonds:

What about power. The new independent power producer has figured heavily into demand forecasts. Yet, this week AES warned and the power-energy convergence stocks are trading near 52-week lows. Was this so, as an investor, what do you do today. Too early to buy, too late to sell. Should you just avoid energy altogether? Doesn't look like this time was so different after all.

Dan Pickering:

Good question. The key question. Diversified power stocks are trading at lower levels than utilities; oil and gas stocks discount "scorched earth" commodity pricing.

It is safe to say that energy stocks have now gotten cheap. Cheap stocks can always get cheaper.

Cheap stocks can take a while to rebound.

The 3 names we like are .... Dynegy (DYN) ..... in the oil service space; I think it's time to take a good look at some of the mid-cap.

A name there is Smith International trading at about 18 x trough earnings and slightly less than 10x (SII).

The third -- a smaller-cap name --- the land drilling space in N. America will be interesting. Patterson Energy (PTEN). Trading around $11-$12.

Maybe trades to 10 and has the chance to double or triple.

Chris Edmonds:

Laura, do we have any questions for Dan?

jeffgro1:

Chris: What are your thoughts on Global Marine at this time?

Dan Pickering:

Global Marine .... it is a very solid co. in the midst of a merger with Santa Fe Int'. Stock is trading around 12 or 13 dollars.

They have good prospects going to be the 3rd largest driller in an industry that's consolidating.

There is a little bit of a down side ... neutral to buy-on weakness.

jucojames75:

Do you think that HAL is positioned well at current prices to take advantage of the expected increase of Nat Gas to $3.50-$5.50 next year?

Dan Pickering:

HAL -- this stock is a tough stock.

Chris Edmonds:

Dan, you and I have talked about Hal.

Dan Pickering:

It's trading at price that was lower than the '98 meltdown.

The key issue is the subject of asbestos. HAL has a liability from an acquisition several years ago. Open -ended lawsuits ... you just don't know what it could be.

It's cheap given current expectations. We think there's enough similar names in the sector.

Chris Edmonds:

They have lots of trouble and lots of issues.

JohnM11663:

Please give me your current thoughts on CPN, MIR, EPG, DUK, ENE and NRG, Thanks.

Dan Pickering:

Enron is the toughest name in the IPP space because they are the undisputed market leader. They have invented portions of the business, and it's a name down here in the low 20s that you have to take a look at.

They are somewhat controversial in that their CEO recently retired.They also have assets they're trying to sell and the accounting is not always apparent.

However, we think it's worth a look here. Wouldn't have 100% of our portfolio in it, but it's a good part of a diversified portfolio.

Dan Pickering:

I think they'll do a better job than they have, but it's still a very complicated industry and simplifying it enough for the avg. person to get it will improve. I'm not hoping for miracles.

iwilkie2001:

The oil service companies are still making good earnings. Will this lead to increased buyback programs by these companies with low stock prices? If so, which ones?

Dan Pickering:

There's no question that cash-flow dynamics are good now. We have already seen buyback programs from a # of them. HAL bought back a bunch in the 30s.

Noble Drilling has cash. We'd expect an increase. But as fundamentals soften -- which they've started to slow -- the companies will get more cautious.

We anticipate a number of them, but not over 5-6% of the outstanding shares. Not a 20% stock buyback.

Chris Edmonds:

Dan, always great to have you!

Dan Pickering:

Thanks so much, enjoyed being here!

Chris Edmonds:

Another tug-of-war in the equity markets today. Here with all of the markets news and a look ahead to tomorrow's action is our markets news guru -- from our Wall Street headquarters -- Yi Ping Ho. Yi-Ping, looks like the bulls struggled to pull our a narrow victory today. Yi-Ping, what are you working on for next week?

Yi Ping Ho:

Blue-chips rallied in afternoon trading to finish higher, and tech stocks pared their losses to close well above their session lows.

Yi Ping Ho:

The major averages traded lower for most of the session, but the Dow Jones Industrial Average finished up 114.03 points, or 1.3%, to 8681.42. The Nasdaq was off 3.38 points, or 0.2%, to 1460.66, and the S&P 500 gained 11.55 points, or 1.2%, to 1018.59.

Yi Ping Ho:

U.S. drug and oil stocks rallied, lifting the S&P 500 Index for the third day in four. Merck, Pfizer and Exxon Mobil led the gain.

Yi Ping Ho:

About 11,000 of the 58,000 new claims came from New York, and another big chunk came from Michigan, where car sales have been sputtering. Another report showed orders for durable goods fell again in August, suggesting the economy was weakening before terrorists took aim at the country's financial capital.

Yi Ping Ho:

Regulators continued to take steps to defend the market from the extreme volatility that followed the World Trade Center disaster

Yi Ping Ho:

SEC Chairman Henry Pitt is working to reduce the amount of time required before insurance and airline companies can sell stock to raise capital. And the Nasdaq announced that it was lifting rules that require a company be delisted if its stock trades below one dollar for 30 days.

Yi Ping Ho:

A big deal was done today in the energy sector. Today, Houston-based Reliant Resources agreed to acquire Orion Power. The $2.7 billion sale represents a windfall for the private equity arm of Goldman Sachs, which owns 37% of Orion.

Yi Ping Ho:

The European Central Bank kept its benchmark interest rate unchanged at 3.75% and noted that money supply growth picked up in August. Overseas markets in Europe and Asia closed higher

Yi Ping Ho:

Meanwhile, the yen fell to its lowest level in nine days against the dollar following more intervention by the Bank of Japan. The yen went as low as 119.35 per dollar, its weakest since Sept. 13, for its fifth-straight losing session.

Yi Ping Ho:

Thank you, Chris.

Chris Edmonds:

Yi Ping, thanks very much.

Chris Edmonds:

Lisa, the second quarter comes to an end tomorrow. I can't decide if that is something investors should look forward to or not?

Lisa Meyer:

The 2nd q ending is not to be looked forward to. Many companies have already warned. We'll see the impact of the terrorists. I think the market will suffer.

Chris Edmonds:

Tomorrow, will be an interesting day. Our next guest is Tom McIntryre.

Chris Edmonds:

Our next guest likely has an opinion on that. He is Tom McIntyre, president of Dessauer McIntyre Asset Management, a Cape Cod investment adviser with nearly $500 million under management.

McIntyre joined the firm in the mid-1980s and has served as chief portfolio manager since 1991. Under his guidance in the 1990s his firm posted an average annual return of 20.8%. In 2000, the firm finished with a slight negative return of 2.45%.

Tom joins us from his office near Cape Cod, Massachusetts. Tom, welcome to

TheStreet.com

Martini Chat.

Chris Edmonds:

Tom, this has been a trying couple of weeks for Wall Street. As you sit in Massachusetts, you are at once both very close and far removed from the terror that gripped New York. How have the events of 11 September affected you and your investment strategy?

Tom McIntyre:

Fortunately, we didn't have exposure to the industries that were immediately impacted -- especially insurance and the airlines. We have a diversified portfolio -- some parts are doing better than others. Take telecom, for example. Many of those names have risen since the tragedy, especially wireless.

We have been hurt by what we thought were more defensive holdings -- companies like Cendant (CD:NYSE) and Park Place Entertainment (PPE:NYSE). You take a look at both companies and both have lowered guidance. But, down more than 30% since September 11th, we think the selloff is overdone.

Hence, diversity has really helped us. That said, the economy has been dealt a severe blow and one we didn't need right now. And, I think higher unemployment and earnings will weigh on the markets in the coming weeks. The real question is how much do current market prices already reflect those issues.

Chris Edmonds:

Clearly, it's been a difficult couple of weeks for investors. Have you done much to adjust your portfolio in the last couple of weeks?

Tom McIntyre:

I've been through a lot of these crises, but this is probably the worst as it affects the collective investor psyche. In times like these we want to own profitable companies with strong management and good prospects. More so than say 1998-99 and the hyper growth of the market, you have to focus on survivors.

That is where our long-term portfolio was already focused, so we didn't make a lot of swaps and changes based on these tragic events. We want to continue -- especially in times like these -- to own good, solid companies.

We would consider some swaps if pricing became extreme at one end of the other, but I try hard not to react to extracurricular events, as big and as bad as they might seem.

Take the gaming and lodging companies. We've taken a short-term beating, but we think they have good prospects in the coming year and, hence, we'll be patient. That's just an example.

There's one issue that not a lot of people are talking about but needs to be clear. A lot of the companies aren't even sure of the lingering impacts of recent events. That makes it even more difficult for investors to make those kinds of judgments.

Chris Edmonds:

Were you surprised at the selloff last week and the lack of a rally after President Bush's rally cry Thursday evening?

Tom McIntyre:

I wasn't surprised early in the week but I was surprised at Friday morning. You saw the selloff coming early Friday and that was a function of the European markets and concerns over the weekend. Nobody really wanted to be long into the weekend. You heard every excuse as to the Friday selloff, which wasn't surprising given the lingering psychological effect.

We are going to see a good day followed by a bad day for some time. There are so many people who don't want to own stocks right now. The pessimism is quite thick and will reach a point that it will exhaust itself, but not yet. There is a lot of forced selling -- you know it's there when you see the Bass sale of Disney.

The good news is Disney took a block of that in themselves and other companies are in the market buying their own stock in major size. That won't be reflected in near-term pricing in the equity markets, but it does bode well for the markets longer-term.

Chris Edmonds:

Clearly, the economic outlook changed as a result of the terror. The Fed quickly cut rates by a half-percent last Monday and has been adding liquidity ever since. Do they do more at their regular meeting next week?

Tom McIntyre:

Absolutely. Greenspan went with Rubin to address the Congress this week and said if you are going to do something, make it big enough to make a difference. It's hard to imagine him saying that and not acting the same way when the Fed meets.

Greenspan is smart. He knows we are in a recession and recent events have caused it to deepen. The amount of stimulus, government spending, trade legislation and other policies are the correct way to restimulate the economy. We should have been doing this even before September 11.

If I were to advise him, and I have never understood this drip, drip, drip approach -- I see no point if fed funds have to go to 2%, to wait any longer to get there. Be done with it this meeting. He needs to do 50 basis points just to get in sync with the market. I just don't know what the risk is to doing a little more than what people expect.

We need to stop gesturing and do something to stimulate money market funds back into the economy and that means the equity markets. The equity markets will lead the economy out and that should be the focus.

Chris Edmonds:

There is a school of thought that suggests lower rates will push "real" interest rates into negative territory and that would be inflationary. Any concerns about reigniting inflation here?

Tom McIntyre:

The anti-inflation camp is strong and persistent, but they have been wrong for many years. We had an inverted yield curve last year and that should have been the clue that we were headed toward recession.

We never stop talking about inflation, but the threats to the global economy over the last several decades has always come from a downturn. The number one priority is to restore growth. We are at negative growth now and we have proven we can grow at 3-4% without inflation, so that is where we need to go.

Chris Edmonds:

Given the economic outlook, what should equity investors do now?

Tom McIntyre:

You have an opportunity to buy top-notch companies with solid balance sheets at prices you haven't seen in years. It's a sale investors need to take advantage of.

In that group are names like Citigroup (C:NYSE), Enron (ENE:NYSE), GlaxoSmithKline (GSK:NYSE), Tyco International (TYC:NYSE), WorldCom (WCOM:Nasdaq), Qwest (Q:NYSE) and Vodafone (VOD:NYSE ADR).

There are others. But, in general, put together a basket of these high-quality names across industries. You can buy them today at multiples most investors could not dream of just two years ago.

And, one thing to note is that these solid companies almost always come out the other side stronger. Just look at Citigroup after the 1997-98 Asian crisis. Solid management and some very opportunistic decisions during the downturn created a much stronger concern as we recovered. History is a good guide here.

Chris Edmonds:

What areas would you avoid?

Tom McIntyre:

Easy to say, but I would not be speculating in lower-tier names. The fact Nasdaq is revising its listing criteria isn't a fact I would chase. Sure, you'll find some ten-baggers there but, more often than not, you'll bust.

I also wouldn't play around in any sector that needs government support to stay in business. So, I'd avoid the airlines completely. That is simply not a profitable business and not a place where you can make money over time.

That said, it's easy to be pessimistic at times like this, but if you tear away the rhetoric and the fear you will see we will survive and probably thrive as we move forward. I'm more inclined to be positive than negative at this point.

Chris Edmonds:

Laura, do we have questions for Tom?

jeffgro1:

How much of the decline in GE is due to their reinsurance business?

Tom McIntyre:

My parents who have never invested both worked for GE for 50 years. The last 20 years or so, he bought through the payroll deduction plan. He thinks my job is easy.

Money managers should just buy GE! But, honestly, they've suffered from a lot of things. The specific issues of engine manufacturing for the airline industry and the insurance.

I've never been a big fan, but now's the time you take a look at it.

Seems like they see things well. If the economy recovers next year as I expect, I would think GE would go from 35 to 50 or 55 dollars easily.

There's Tyco, many people think of it as a mini-GE. People question their accounting sometimes, but I'll take the SEC's verdict.

Chris Edmonds:

Do you buy GE, here?

Tom McIntyre:

In GE's case, much earnings come from financial services.

I would probably still rather look at a Tyco Intl or other conglomerates like an Enron.

jerryda:

Are regional banks and/or S&Ls OK to buy here?

Tom McIntyre:

Absolutely. There's a very steep yield curve. It's going to persist for a while.

Barring a collapse in real estate or other segments that a particular bank has loaned to, they will do just fine.

I would take a look at Bank of America if I was going to right now. We have shares in Countrywide Credit and have owned them for many, many years.

They had record numbers earlier this week. It sells at a multiple of about 8.

The reason is everybody thinks we're 90% thru this refinance cycle. CWide has a cheap multiple and always will ... but it's a very inexpensive stock and a good one to buy out.

cscoer:

How will the retail clothing sector look in the next year. I was in junior high during 87, and I don't recall a downturn in Gap or Limited spending for 13 year olds.

Tom McIntyre:

Can't be an expert at those companies, but the time to look at retail is when everyone is questioning it.

The retail stock question is more of an individual question than a general one.

I think you'll see a rough holiday season. I'd be careful about that group.

Chris Edmonds:

One more question, for Dan, if you have one.

cscoer:

What is the likelihood that nuclear power will make a comeback and lower demand for oil? What plays exist for participation in nuclear power?

Chris Edmonds:

Any thoughts on nuclear power?

Tom McIntyre:

My thoughts are that the world is thinking dif. about such issues than they were a couple of weeks ago.

I would say that prior to this hijacking, there was an upsurge in conceptual agreement that

it was a way to go.

Right now, the prospects ... people are much more skeptical and much more worried about the plants that exist globally in terms of security.

Chris Edmonds:

Are there any utilities in your portfolio?

Tom McIntyre:

Just Enron is what I own. We do not own any other utilities. Years ago we did, but there have been better places in the last couple of years.

Chris Edmonds:

Tom, thanks for being with us

Tom McIntyre:

Okay, Chris, appreciate it.I enjoyed it.

Chris Edmonds:

To take us to the top of the hour, Lisa,

TheStreet.com's

Personal Finance Editor, joins me from our Wall Street headquarters.

And, from our San Francisco bureau, Senior Writer Tish Williams, the author of a new weekly must read on

TheStreet.com

-- Tech Support.

Tish, looks like a low-tech look at high-tech gizmos to me. What's up with this new column?

Tish:

The column is called "Tech Support" and each week it'll dissect a technology for the benefit of the reader who doesn't give.

The column is called "Tech Support," and each week it'll dissect a technology for the benefit of the reader who doesn't give his or her friends software manuals for Christmas. Lots of us want to enjoy the new gadgets and Internet features out there, but we don't want to be guinea pigs.

So "Tech Support" will tell you what's worth your time and what's doesn't cut it. It'll never be geeky; we'll be the champion of the busy antigeek

Lisa Meyer:

What do you think of the Napster offshoot?

Tish Williams:

If you were a little too timid to try Napster in its heyday, we weigh in on the heirs to Napster in this week's installment of "Tech Support." Morpheus was the clear winner. We wanted something that we could set up easily and get working without having to get too geeked out. Morpheus took 30 seconds to download, another minute to install and soon enough we could search for not only music, but videos and pictures.

It has an easy to use Web-style interface, which explains why over 1 million people have downloaded it this week from Download.com. We also tried AudioGalaxy, which made us attempt to register for a password five times before its servers could process the request, and BearShare, which is a simpler program in the Gnutella family that took a lot longer for us to download and spent several minutes connecting us to a network of users sharing their files.

The new Napsters don't go through a central server, but instead connect hundreds of thousands of computers together in a loose confederation. Morpheus was our favorite.

Go to google and type in morpheus.

M-O-R-P-H-E-U-S

Lisa Meyer:

What is you take on wireless right now?

Tish Williams:

People get really excited about anecdotal information: They see friends and relatives rushing out to buy cell phones.

We want our loved ones to have mobile phones so we can get in touch with them in emergencies. AT&T Wireless acknowledged it had a jump in sales following Sept. 11, while other carriers have declined to comment. But a point I want to bring up is, that if panicked Americans run out and buy cell phones, it will most likely be more of a long-term than short-term positive.

The reason being is the emergency user -- a person who uses a cell phone only when he or she has a flat tire -- is not a big spender, and the wireless carriers are judged by how much their customers spend. Maybe in the third quarter we'll see the number of average dollars each user spends a month go up -- because more people were getting in touch with friends and family to make sure they were OK. And maybe we'll see the number of new subscribers go up from the post-Sept. 11 recruits.

But it will take time to turn the emergency user into a person who enjoys the convenience of the cell phone. Keep in mind AT&T Wireless made an average of $63.80 off each customer in the second quarter, and it isn't the tops among competition.

If a bunch of first-timers sign up for a basic $39 plan and make no calls, that pulls revenue numbers in the wrong direction in the fourth quarter.

rmnews2001:

I agree that there could be a short-term rush of people going wireless, but it's going to take time to move them from infrequent to power users, the kind that are profitable for carriers.

grimmyjimmy:

How do you value CHV if/when the Texaco merger closes? Any opinions on the spike in CHV's price this afternoon?

Chris Edmonds:

It makes the company larger.

cmachlin_1999:

What about precious metals?

Lisa Meyer:

I'm a consumer of them. I have a gold tooth, so I'm a big consumer of precious metals.

Chris Edmonds:

I think

they reacted the way gold should have reacted. They make great gifts.

cscoer:

Who is our most amicable ally in opec? Certainly not Venezuela? Saudia Arabia?

Tish Williams:

Chris, you get all the good questions.

Lisa Meyer:

We have to wait and see. You have to wait and see who'll be on our side.

Chris Edmonds:

I think that is exactly right.

Lisa Meyer:

I think aol/time warner lowered their estimates. They claim the disaster decreased their performance. It's part of the overall decreased spending of ddvertising.

Tish Williams:

As far as the Net goes, there's a funding problem, but this was a great time for them. Everyone needed to get online

Right after a shining moment, Exodus went out of business.We're a little bit away from anything that gives investors real hope for these companies.

Lisa Meyer:

I agree, it will be tougher for Net companies.But it did show the importance of the Net.

Tish Williams:

For wireless, we'd already seen Motorola painting a horrible picture even before Sept. 11. Ericsson, too.

Now the hope is for the 2nd half of 02 to bring back spending; handset sales are pretty depressing -- they're not expecting a huge rebound. 2002 already was going down the toilet.

Chris Edmonds:

We can wrap this up in a interesting way.

Lisa Meyer:

I think there is a chance here.

Chris Edmonds:

To profitability, ever

Lisa Meyer:

We have to change the habits of consumers. They create dependence.

Chris Edmonds:

Tish, you get the final word.

Tish Williams:

One of the problems is when you take away funding, the business models don't make sense. Look at Exodus or E*Trade.

Without funding, business plans collapse.Compare it to eBay or AOL, they may have some problems but they still can make money.

As for the others, without capital they just have to hunker down.

Chris Edmonds:

Tish Williams, thanks very much

Tish Williams:

thank you

Lisa Meyer:

Thank you, Chris.

Chris Edmonds:

Co-host Eric Gillin with be back from the holiday

next time.Until next week, we say cheers.