John Edwards' Chat on AOL

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John J. Edwards III chatted on AOL MarketTalk on April 12. AOL's MarketTalk is hosted by Sage Online (Keyword: Live).

Sage MikeM:

Joining us to discuss market trends is John Edwards, markets editor for

TheStreet.com

. Welcome back, John! John, how does Compaq's earnings statement reflect on the PC manufacturing sector?

JEdwards:

Well, it looks at this point as though investors are largely treating the Compaq disappointment as a Compaq-specific event. While it's certainly not a positive for the overall PC sector, the general feeling seems to be that Compaq has some difficulties that are contained within Compaq itself.

Question:

The Dow appears to be headed for record territory. Are the blue-chips beginning to "blow off" tech earnings announcements?

JEdwards:

The action in the Dow looks like it's part of a trend we have been seeing, which is toward a real sector-by-sector focus in the market and less willingness to allow bad news in technology -- for example, to weigh down blue chips in other areas.

Question:

Is there a danger in the blue-chips going "too high?" How does one value too high?

JEdwards:

It's becoming harder and harder to determine what's too high in this market. The important thing as always is to focus on the fundamentals of companies themselves, as well as the backdrop of the overall economy. So if a company has solid earnings growth or a particularly bright prospect, that might make an investor more comfortable with the higher multiple. It's really a matter of the investor's personal comfort level.

Question:

Are prospects getting brighter for oil?

JEdwards:

It seems that the production cups that OPEC has put in place are having an effect on oil prices and that could give some support to oil stock going forward,but it's still difficult to say with certainty that the group is out of the woods.

Question:

I'm in search of counsel regarding the in's & out's of IPOs, where do you recommend I begin ?

JEdwards:

Well, with IPO's its important to begin from a position of caution. You should read the S1 statements filed ahead of offering very carefully and make sure you are comfortable with the very real risk factors that many newly public companies have. And when investing in IPO's, especially in the early days of their trading, its important to avoid placing market orders that might be filled at a price far above the price you want to pay. You should instead place limit orders so that you know the maximum amount you will pay for the shares.

Question:

What are some of the features offered at

TheStreet.com

that are particularly unique to the site?

JEdwards:

Well, certainly the quality of the commentary and the news coverage on our site we find to be unique among our competitors and we have a lot of great features on the site that we think set us apart even when there is a similar kind of thing to what other publications are doing. We have a great portfolio tracker and we have really excellent coverage of a wide number of industries and the market.

Question:

Where do you see bonds going over the next few months, and how will this impact the stock market?

JEdwards:

I think if we see the economy in the U.S. remain as strong and stable as it has been with limited inflation, we can expect to see bonds occupy a range probably between 5% and 5 1/2%. The stock market has shown that it's comfortable with that kind of range on bonds and so while they might not provide support for huge futher gains in stocks, I don't expect bonds to be an impediment either.

Question:

Do you recommend beginning investors pick individual stocks or do research to find the best mutual funds?

JEdwards:

Beginning investors might often find themselves more comfortable with mutual funds, but many factors can play into the decision. You have to consider your personal degree of comfort with the kind of volatility that some individual stocks can go through.

Sage MikeM:

Thank you, John Edwards, markets editor for

TheStreet.com

! See you next week.

JEdwards:

Thanks a lot, great to be here.