John Edwards Chat on AOL

Among other things, our markets editor ponders the future of bonds, where oil prices are headed and how to get rich quick.
Author:
Publish date:

SageCrystl:

Sage is proud to introduce Mr. John Edwards, markets editor for

TheStreet.Com.

Question:

What is your outlook for bonds?

JEdwards:

It's starting to look like we may well have seen the near-term high in bond yields. But the inflation situation is sufficiently uncertain that we can't really expect a major rally in bonds very soon.

Question:

We all know the market will be higher in one year? Do you think so?

JEdwards:

Overall, I would say that is probably likely, although what we are not likely to see is the kind of year-after-year 20% and 30% gains that many people have gotten used to.

Question:

To what do you attribute the recent weakness in the technology sector?

JEdwards:

It initially stemmed from the concerns about the rise in interest rates. With interest rates higher, fast-growing tech companies find it more difficult to raise the capital they need to keep growing.

Question:

Where do you see oil prices going?

JEdwards:

I would say oil prices seem to have a little bit more rising to do, given that we are really seeing the early stages of a global recovery which should boost demand.

Question:

Will the Year 2000 issue cause a major selloff by year's end?

JEdwards:

Well, it's still even at this late date, very difficult to determine exactly how Y2K is going to affect the market. We are seeing some signs of concern particularly today with the downgrade of major banks by First Boston.

JEdwards:

The analyst there cited Y2K concerns among others, so the thing to do is watch, to see more signs like that, that Wall Street's Y2K worries are growing.

Question:

I want to get rich quick. How do I do it?

JEdwards:

Well, the short answer is buy stocks that only go up. But the realistic answer is that it's pretty much impossible to know that you are going to get rich quick on any given investment.

JEdwards:

It has seemed that the easiest way to score big gains quickly has been in the IPO market, but that market is always dangerous, and seems to be becoming more so.

Question:

Do you see technology resuming its market leadership?

JEdwards:

It seems likely that technology will at some point return to the market's vanguard, but the question is how long that takes to happen. A lot of that will depend on the course of interest rates, along with the kind of revenue and earnings growth we see in the sector.

Question:

What are your thoughts on international investment diversification or added risk?

JEdwards:

Well, in general for investors with a decent-sized portfolio to play with, diversifying by investing internationally can be a smart course. But it's especially important to do a lot of research before venturing into the foreign market, particularly into emerging markets, which are extremely volatile even in the best of times.

Question:

What are your thoughts on Dell and the PC sector in general?

JEdwards:

Well, I can't address Dell specifically, but the overall PC sector seems to be doing a fairly good job of adapting to the new realities of lower PC prices. It will be interesting to watch how PC companies are able to continue to create strong demand for their new products.

Question:

What are your thoughts on the airline sector?

JEdwards:

Overall, I'm pretty skeptical about the airline group. It has benefited from a consistently strong economy, but with fuel prices rising and pricing pressures increasing, it remains one of the more difficult businesses around.

Question:

Why is DSL such a big deal?

JEdwards:

DSL and other broadband technologies are such a big deal because they are essentially the future of not just telecommunications, but television, Internet access, and other home entertainment.

JEdwards:

Companies are furiously trying to position themselves to best take advantage of the new offerings that broadband will enable customers to receive.

Question:

What happened with the stock market today?

JEdwards:

Today we are seeing a great example of how perilous the market can be in a low-volume environment. Trading volume has been depressed for the last couple of weeks as traders wait for some kind of certainty on the course of interest rates and the overall economy.

JEdwards:

So with fewer players in the market, it's easier for moves like today's to become more exaggerated.

Question:

What type of strategy should the average investor employ with IPOs?

JEdwards:

A very cautious one. Investors looking at IPOs should make sure to thoroughly read companies filings as well as any pre-offering research they are able to find. When buying IPOs it's important to avoid placing market orders which can be filled at any price.

JEdwards:

Investors should instead place limit orders setting a price beyond which you will not buy the stock.

SageCrystl:

Thanks for joining us today John.

SagePSU:

Thanks John