John J. Edwards III chatted on AOL MarketTalk on Monday, Oct. 25. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live). As with all chats, this transcript is unedited.
Live from New York, N.Y., please welcome John Edwards, markets editor at
. John can answer your questions about the markets and investing. John does
offer individual stock commentaries or recommendations.
Thanks for having me. Great to be here!
Where do you see oil prices going in the near term, and do you like the drillers here?
I don't have an incredibly good sense of where oil prices are heading at this point. We're seeing some of the expected gaps in adherence to the
production controls, but they seem to be holding up better than many expected.
As for the drillers, I'd say they look fairly attractive in this neighborhood, but only tentatively. For more detailed insights on the sector, check out stories by
oil and oil-services reporter,
Do you think the
will raise interest rates again this year?
At this point, I'm leaning toward expecting one more hike, probably at the Nov. 16 meeting. Even though the September
didn't look very scary, the September
probably gave the Fed pause. Much will depend on how the third-quarter
employment cost index
looks on Thursday. The Fed is known to watch it carefully.
Will the year 2000 problem cause a market selloff in the fourth quarter?
decline certainly made that seem possible, but I still expect the very end of the year to be generally positive. I think many money managers and investors will try to get ahead of a Y2K recovery rally, which many expect to see in the first quarter of 2000 as things get back to normal and info tech spending starts picking back up.
Is there any hope for the gold stocks?
Precious metals have not been a favorite of mine; I find them hard to take seriously. Obviously many an investor did well in the recent upswing of gold prices, but I think the factors that spurred the rise were isolated enough that there's not a lot of upside left.
Why is everyone so scared of what
says, and how can anyone understand what he says?
Greenspan scares people in the market when they think he's indicating a desire to raise interest rates and/or get stock valuations to decline. He's actually not too hard to understand, because he mostly says the same thing over and over again:
The Fed must be vigilant in guarding against inflation (no duh). Banks should take steps to protect themselves against risk (gee, really?). But he'll always shake things up, because he's truly powerful.
Eighty percent of my portfolio is invested in telecom and semiconductor stocks. Is this very risky?
Without knowing the exact makeup of your portfolio, I can only say: Yes, very probably, that's a pretty risky mix. Semiconductor stocks are especially sensitive to economic conditions, and they can be extremely volatile.
Telecom offers more stability and a lot of opportunity, but there's a great deal of competitive risk in the arena. I hope you've done a lot of research on the telecom and semiconductor stocks you own, and I hope you consider diversifying a bit.
Any comments on investing in emerging markets in light of the troubles in Russia and Indonesia?
All investing takes careful research, but perhaps none more than investing in emerging markets. You should commit risk capital, not anything you're counting on for your retirement or your kids' education. And it's important to become as much of an expert on the geopolitical environment in which you're investing as in the companies themselves.
A good place to start is
international section, which features a great team of reporters covering both international companies and the policy backdrop against which they operate. Best of luck!
Thank you for joining us today, John! We have been speaking with John Edwards, markets editor at
Thanks very much. Great chatting with all of you, and I'll see you at