John J. Edwards III Chats on AOL, Oct. 11

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John J. Edwards III chatted on AOL MarketTalk on Monday, Oct. 11. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live). As with all chats, this transcript is unedited.

Comment:

Live from New York, NY, please welcome John Edwards, markets editor at

TheStreet.com

.

Jedwards:

Great to be here!

Question:

Do you see another rate hike this year?

Jedwards:

The answer I just know you're looking for: It depends. But it does. The Fed will have one more set of employment data to examine before its Nov. 16 meeting, along with various other data. If the numbers are inconclusive or suggest slowing, I think the Fed will hold off on hiking rates.

Jedwards:

If there's a strong hint of inflation, however, the Fed won't hesitate to move. I think it's possible, but unlikely, that the Fed would move at its December meeting after not moving in November. But some of that will depend on how crazy people are being about Y2K.

Question:

Do you think the internet funds are too pricey to get into now?

Jedwards:

Internet stocks in general are moving back into wildly overvalued territory from their brief sojourn in merely overvalued territory, so you have to have real confidence that there's further appreciation ahead for the group.

Jedwards:

I think it's harder to be confident in the whole sector than in particular stocks, so this might not be the time to make a broad sector bet like buying an Internet fund. But, of course, Net stocks are famous for confounding expectations of all sorts.

Question:

Is Disney ever going to be a stock worth holding?

Jedwards:

While I can't give a buy or sell recommendation on Disney, I can recommend that you take a look at stories by

TheStreet.com's

media and entertainment reporter, Alex Berenson. He's done a great job of tracking Disney and the other stocks in the group, and he offers real, useful insights.

Question:

I base my researches using investor's business daily and valueline. Your thoughts on these two references please. Thanks.

Jedwards:

I actually don't follow either of them closely, but I understand their analyses can be useful for value-oriented investors. I would suggest that you stay away from the mediocre articles in IBD and stick to the charts and background data, however.

Question:

I would like your opinion of China please.

Jedwards:

Fast-growing economy that bears watching, but political instability always seems right around the corner. Proceed with caution.

Question:

In general I'd rather buy mutual funds because I do not feel confident in buying individual stocks. Is there a book you could recommend in order to get me started in selecting stocks? Also, would you have any one stock that you could recommend now?

Jedwards:

One book that a lot of investors find useful is Stocks for the Long Run, by Jeremy Siegel. It can also be useful to read books on investing history, such as Devil Take the Hindmost, by Edward Chancellor. As for your last question, sorry, I can't provide buy/sell advice on individual stocks.

Question:

How does the economy look closing out the year?

Jedwards:

The economy continues to look quite strong, despite the slowdown in job growth that we saw in the September data. Y2K jitters may rattle things a bit toward year-end, but it's important to remember that worries about Y2K damage will far outweigh the damage itself.

Jedwards:

That said, I think we can expect to see a slowdown in business spending as companies lie low ahead of the end of the year. Should be a pickup early in 2000. In terms of investing, the market pickup is likely to come before the end of the year as traders try to get ahead of the expected rebound.

Comment:

Thank you for joining us today John!

Jedwards:

Thanks very much for having me. Great chatting, and I'll see you at TheStreet.com!