Participants on March 18 included host Brenda Buttner, Herb Greenberg, Dave Kansas, Adam Lashinsky, Gary B. Smith and guest Anthony Dwyer. The transcript is unedited, and phonetic spellings are indicated with (ph).

BRENDA BUTTNER, HOST:

Hi, everyone. I'm Brenda Buttner, and you are connected to "TheStreet.com." We're here to help level the playing field on Wall Street for you, the individual investor.

Boy, what a week for the

Dow

! The

Nasdaq

recovers as well. What now? Let's get the Word on TheStreet.

With us from

TheStreet.com

financial Web site, Senior Columnist Herb Greenberg, Editor-in-Chief Dave Kansas and Silicon Valley columnist Adam Lashinsky. Also joining us, Anthony Dwyer, chief market strategist at investment banking and brokerage firm

Kirlin Holdings

.

First topic, what else can we say except wow, Dow? Were you ready to write off the blue-chips? Not now. They rallied like a hot dot-com, the Dow up almost 7% for the week, including a record-setting gain on Thursday just shy of 500 points. Things were so good for the Dow, it helped pull the Nasdaq out of a nose dive earlier in the week to finish strong on Thursday and Friday.

Herb, everybody's shaking their heads so much they have whiplash, I think. Where does the smart money go now?

HERB GREENBERG, SENIOR COLUMNIST, THESTREET.COM:

Did you say the smart money or the fast money?

BUTTNER:

Well...

GREENBERG:

And that's a big difference in this marketplace.

BUTTNER:

... some -- they've been the same thing often.

GREENBERG:

They've been the same.

ADAM LASHINSKY, SILICON VALLEY COLUMNIST:

What's the difference, Herb? Explain it.

GREENBERG:

The difference really is the smart money is the -- are the folks who really are looking at fundamentals and real companies. The fast money are the traders, who, of course, look like the smart money, and you -- you know, they get confused through all this.

BUTTNER:

Oh, Tony, you're putting money to work. The dogs had their day. But are they going to have their month or their year? Is this a significant shift for these so-called Old Economies?

ANTHONY DWYER, CHIEF MARKET STRATEGIST, KIRLIN HOLDINGS:

I think the only way you can really tell if it's real money -- forget about smart money or fast money, if it's real money that's shifting there is the volume.

And the volume in the market, especially in the Old Economy stocks, has been fabulous. It's been stunning, actually. It's very rare where you're -- you get a day in the market where on the

New York Stock Exchange

there's 10 times as many advancers as decliners. We had that yesterday.

It's actually on major market lows, if that happens...

LASHINSKY:

Tony, explain what that means. I mean, does that mean that there's more mutual fund money pouring in, or does that mean individual investors, or what? Who is that?

DWYER:

I think it's institutional money going in, where portfolio managers are looking to finally take advantage of, No. 1, the value that's been created in the Old Economy stocks. And, No. 2, they're becoming momentum stocks. You look at a stock like

DLJ

, Donaldson Lufkin Jenrette, stock's up 12 points in two days. That's trading like an Internet stock.

LASHINSKY:

Well, wait a minute, how long does that momentum last? I mean, is this going to last just two weeks, and then we're going to be back to the old game again?

BUTTNER:

Well, momentum goes both ways, too.

DWYER:

Typically, that's been a -- typically, that's been the case, where the vol -- where you get these oversold rallies to the Dow and the, you know, it's a short-term loss in the Nasdaq, and then it screams ahead.

It's different this time. This last couple of days, the Nasdaq market has had an oversold rally. That's all it was, it was...

BUTTNER:

Well, well, wait a minute...

LASHINSKY:

What does oversold rally mean? What does that mean?

DWYER:

In other words, when it gets so washed out where you can feel your guts...

LASHINSKY:

Oh, OK.

BUTTNER:

OK.

DWYER:

... churning, that your stock's going to get...

BUTTNER:

That's the visceral feeling.

LASHINSKY:

That I understand.

DAVE KANSAS, EDITOR IN CHIEF, THESTREET.COM:

I think that's important, because I think a lot of this is being driven by fear. There was a lot of blood in the very popular, well-written tech stock sector, and I think a lot of people say, Hey, these -- drug stocks, heavy -- these look pretty good. And people are happy to sit and...

BUTTNER:

Dave, every single...

KANSAS:

... take a little bit...

BUTTNER:

... every single...

KANSAS:

There's two...

BUTTNER:

... time there has been three corrections this year in the Nasdaq, and every time you've been rewarded for buying. You think it's different now?

KANSAS:

I do, I do. I believe it is different. I think the

Fed's

going to be more active. I think that we're going to have more volatility, that's going to create more fear...

BUTTNER:

They don't even care about the Fed.

DWYER:

There's two kinds of fears...

KANSAS:

I disagree, I -- then why are we going up and down 400 points at a time? They do care.

DWYER:

There's two kind of fears in the market. The first fear is losing money, and unfortunately the investor perception is, when they get in the market, they're going to lose money. So that's a -- that's what is taken as a given. The second fear is losing...

BUTTNER:

Do you think that's really true?

DWYER:

Yes. The second fear is losing...

BUTTNER:

I don't think that people think they are going to lose money.

DWYER:

... the wealth that you created by a big stock market run-up. It's a much more dramatic fear, and we saw that Thursday -- Wednesday, Thursday. We saw the fear of, Oh, my God, I've got to double, I'm not going to give it all back, I got to get out now.

LASHINSKY:

Brenda, I can't remember when we had this conversation about the Dow, why would anyone want to be in the Dow? Why would anyone want to be in the Dow? You know, I hate to...

GREENBERG:

We were talking about it...

BUTTNER:

We had this last -- go ahead.

LASHINSKY:

... pat myself on the back. But I said -- thank you, Dave -- people are going to want to -- thank you, David -- people are going to want to stay invested in the U.S. economy. And people want to stay invested in the economy.

GREENBERG:

But that kind of discussion...

LASHINSKY:

There's one other point. People want to stay invested in technology. It's still going great guns, it's still producing great productivity gains. And the economy's doing well, stocks move up, generally.

BUTTNER:

You know...

GREENBERG:

Adam, one week ago we were led to believe, as recently as one week ago, that all of these, quote-unquote -- and I hate hearing this name -- "Old Economy stocks" were for -- were just for nothing, they were going to not make you any money.

LASHINSKY:

I call it the economy, right? We talked about that. It's the economy. You have to be invested in the economy.

GREENBERG:

You have to be...

BUTTNER:

You mentioned last week, but what about last year? This happened last year. It was all about

Alcoa

, it was all about these value stocks, the Internet bubble had burst.

DWYER:

It didn't have the volume.

BUTTNER:

And now look what happened.

DWYER:

That's the difference here. You have to look at where the money's actually flowing, not where the hype is flowing, where the money's flowing. Now, over the course of this week, there was a significant shift in dollars. If you looked in it on Wednesday and Thursday, every time the Nasdaq futures downticked, the S&P futures upticked.

GREENBERG:

But Tony, we -- Tony...

DWYER:

There was a significant shift.

GREENBERG:

... how long do we know that this flow of money will continue into the Dow stocks?

DWYER:

Well, you never know, except, remember, people talk Old Economy, New Economy, every company's going to become a New Economy stock. Business-to-business has been around since companies have been around in the history of the market.

BUTTNER:

So bottom line, Tony, what are you buying?

DWYER:

I'm buying the Dow stocks. I'm buying the, quote unquote, "Old Economy stocks"...

GREENBERG:

I don't want to hear that.

DWYER:

... because they're participating as a result of the technology that they're utilizing that have been created by the "New Economy" stocks, to get Herb's goat.

BUTTNER:

All right. Last word, Tony Dwyer from

Kirlin Holdings

. Back in a few minutes to tell us about two favorite stocks and why you should take a look at them.

Up next, he's been called "the Oracle of Omaha," but does it make sense to listen to

Warren Buffett

any more? You need to hear what the Chartman has to say when "TheStreet.com" returns.

BUTTNER:

Welcome back.

Well, does the man viewed as the best stock picker in the last 25 years have any magic left? Let's ask the Chartman.

There he is, Gary B. Smith, who trades for a living from his home using the charting method. Gary joins us from Washington, D.C.

And here in New York to look at the same companies from the fundamental point of view, our Silicon Valley columnist, Adam Lashinsky. Gary and Adam do not own any of the stocks in this segment.

OK, first up,

Berkshire Hathaway

, which, of course, is really a collection of stocks put together by the legendary stock-picker Warren Buffet. Now, Gary, you charted the class B shares because the class A traded about $50,000 a share. I know that's nothing to a, you know, big-time trader like you, but...

GARY B. SMITH, CHARTMAN:

That was your kind of stock that you would buy, Brenda.

BUTTNER:

Yes, right. All right. But really, both have had a rough road in the last couple of months. What do you make of this? What's the chart say?

SMITH:

Well, well, well, here's the funny thing. You know, I think everyone kind of wrote Buffett off, you know, it was like one of those

Andy Warhol

characters, you know, Warren, you had your 15 minutes of fame, go away.

And here's the thing. I even wrote him off. I thought, oh, you know, what does he know? He's a fuddy duddy. But maybe he is smarter than the rest of us. You know, time will tell.

But here's what I really like about this chart. You had a long, steady, just pounding downtrend, I mean, the stock, the B class shares, probably the A also, were down about 50% over the last, you know, four or five months. Over the last few days of this week, it bounded up on heavy volume.

The downtrend is broken, the back of the downtrend is broken. I only wish I had bought Berkshire earlier this week. I am very bullish on this stock. I love it right here. I think Warren B. is back.

BUTTNER:

Especially if Mr. Fundamentals -- if the fundamentals start to matter, right, right, Adam? I mean, those are the kind of stocks that he goes after, those kind of Dow stocks.

LASHINSKY:

Yes, absolutely. And, of course, Gary, you know, unlike your four minutes of fame each week, Warren Buffett has had way more than 15 minutes, he's had 40 years of fame, and there's a reason for that. Gary, the valuation is not absurd.

Paine Webber

put an intrinsic value on Berkshire Hathaway a few weeks ago, and it's still trading at 28% below that value.

Berkshire Hathaway had a tech-like premium for a long time. It was an exciting growth stock that people wanted to own. It doesn't have that any more, and that's just fine, because Berkshire Hathaway is a bet on real companies. It's an insurance company, largely, and it's not just a collection of stocks, it also has holding companies, like

Executive Jet

, which is in an investment phase, doing very well. The stock should do better.

BUTTNER:

All right, next up, a stock that you would probably never find in Buffett's portfolio, an Internet company. Gary,

InfoSpace.com

was a rocket for a while. It has a very nice chart, almost straight up, until recently. What does that mean?

SMITH:

Well, absolutely. In fact, this would be a good example of a chart that I would say Buffett should have had in his portfolio. I mean, here, here he had a stock -- look at it -- it was like 1000% up. But I am from the keep-it-simple school, in that if a stock continues to trend up, I don't care about valuation or any of that. And Adam's heard me say that don't touch it if it's not broken.

Here's the problem with InfoSpace. It's broken. And it cracked earlier this week. It has not recovered. I'll tell you what, I would not touch InfoSpace on a bet. I don't think it's going to come back. The only way I might buy InfoSpace right now is if it made a new high. But I just honestly don't see that, at least for the rest of the year.

BUTTNER:

Well, Adam, the chart is pretty clear on this one. There'll be tough times ahead. What do you think?

LASHINSKY:

Yes, Gary, the chart says absolutely nothing about what's happening with InfoSpace.

SMITH:

As usual.

LASHINSKY:

It's not broken, because nothing bad has happened.

SMITH:

Oh, get -- come on, Adam!

LASHINSKY:

Compared with Berkshire Hathaway, Gary, the valuation of this company is absurd. It's trading at about 230 times 2000 revenues, that's about double

Phone.com

, which is another highflying wireless-oriented Web stock.

But there's a lot of good news coming down the pike for this company. They're getting involved with wireless operators, which is a new source of revenue for them. They've beaten revenue expectations before, and they'll probably do it again.

So let's stress what you like about this. It's not a bet-the-farm stock, it's a crazy valuation. But lots of good things going down. If you want to have a small piece of it, that's a good idea. But you'll be telling us soon about when it hits that high again, and it's time to get back in.

SMITH:

Adam, are you going to buy InfoSpace right here?

LASHINSKY:

Were I an investor, I -- it would scare the heck out of me, no. But I'm just telling you, I am more comfortable thinking it'll go up than that it'll go down on valuation.

SMITH:

Oh, yes -- no, you know what? We're going to revisit this one in about a month...

BUTTNER:

We will.

LASHINSKY:

I'm sure we will.

SMITH:

... because you're dead wrong on this one.

BUTTNER:

We will, right and wrong. OK, Gary and Adam, thanks, as always. We'll see more of both of you...

LASHINSKY:

Thanks, Brenda.

SMITH:

Thanks, Brenda.

BUTTNER:

... in just a few minutes.

And when we return, our guest stock-picker says he's got stocks that will be winners. But will they hold up to stock drill? You'll want to see this next.

BUTTNER:

Our guest stock-picker today is Anthony Dwyer. He's chief market strategist at brokerage and investment banking firm Kirlin Holdings. The two stocks he likes are

Network Associates

and

Informix

. Anthony's firm has no banking relationship with either company.

And back to put these stock picks to the test so you can decide if they're right for you, from

The Street.com

, Herb Greenberg. And in D.C., Gary B. Smith. Herb and Gary do not own either stock.

First up, Internet security stock Network Associates. Now, Tony, you're basically a chart man, right? You take a look at the technical analysis. And what does it tell you about this stock?

DWYER:

Well, I really like both stocks from not just the chart standpoint, because both of them are coming out of bases, longer-term bases. They're going up on...

BUTTNER:

That means they've been down for a while.

DWYER:

They've been down for a while, they have what -- for whatever reason, they went down. They're going up on better volume, then -- and they're consolidating on weaker volume. That's typically a sign of a stock that's going to continue its current trend, and both of those are on the upward move.

But I think it's also important in this market, you ought -- you can't just rely on the chart alone. I think you have to look for those companies that have positive earnings, revisions by the analytical community, positive earnings, surprises, and they're undervalued relative to their historical valuations.

GREENBERG:

Tony, I -- what -- I have to tell you something. I hear you, hear you, hear you. But I still -- you know, I made a -- I almost made a career out of pointing out all the problems this company had just a year ago when it had serious accounting issues and when the thing kept getting hammered down, hammered down, hammered down. And, you know, this is also a management issue, and I still sort of wonder whether I can sort of believe in this management.

DWYER:

That's the kind of sentiment that you're looking for when you're trying to find a stock at the bottom. And what is a good indication that you found a bottom, Herb, is when you do see that volume come on those up moves. And if you were right, and they were still major problems, the analytical community would be on them...

GREENBERG:

Oh, the analytical -- don't tell me about -- don't...

BUTTNER:

You take a look, you take a look at the chart, does it tell you the same thing that Tony thinks?

SMITH:

No. I mean, look, I -- Tony, I hate to say this, because you're -- you -- we speak the same language, you and I...

DWYER:

Right, sometimes.

SMITH:

... we understand the tea leaves.

BUTTNER:

Bases and bottoms, all right.

SMITH:

But here's the thing. I'm looking at the same chart. Maybe I looked at a longer time frame than you. I see it made it -- look, it's made a beautiful run, you got a double since, you know, less than six months ago. Don't you think it's going to hit that upward resistance?

DWYER:

I think that upward resistance, Gary, is going to -- is sort of eliminated by the significant move that it had to the downside. It was sharp, it was nasty. The stock totally broke down. You're going to have people that are just churning that stock out so they don't lose all their money at the bottom.

And as you know, as a technician, the most important price action, you read a chart right to left, the -- the near-term action is the most important, and the volume parameters are there that indicate the stock still wants to go higher.

BUTTNER:

Next one, Informix, what do you like?

DWYER:

Informix, same thing as Network Associates. This is a database software company that has not gotten an

Oracle

-type of multiple. Yet it's got a growing business. From what I read, their numbers could be conservative for the current quarter...

GREENBERG:

Can I tell you something? This is the rare case where I can say I believe -- I sort of agree with a guest, only because I had -- I had -- in my column...

DWYER:

I feel special.

GREENBERG:

You should feel. Informix was mentioned by one of my very best stock pickers just two weeks ago as a company he was buying because of where it was going fundamentally, not just by the charts.

DWYER:

Well, it's...

SMITH:

First of all, ...

DWYER:

... funny how you can -- what you can always find out is the charts typically tell you what the fundamentals are. One thing I know is, the market...

BUTTNER:

Well, you'd never know that from looking at chart men. All right, Gary, the chart is a little messy, don't you think?

SMITH:

Well, yes, I mean, this, this I -- Tony, I'll give you that this chart is better than Network Associates. Here's the -- here's, I think, the difference. Network Associates made a sharp V-bottom. That's my problem with that chart. At least this chart has kind of a rounded, bowlish bottom.

I still think you got some overhead resistance. I guess I'm curious why Informix, when you have so many better charts that are near 52-week highs and don't have any overhead resistance.

DWYER:

Well, I'm trying not to chase stocks here, Gary. And your charts -- you know, if I was looking at a five-year chart, I might agree with you. However, that's five years ago where the resistance is. If you look at a one-year chart...

SMITH:

Well...

DWYER:

... or a two-year chart...

SMITH:

... it's -- it's -- it's two years ago. Well, don't you take a longer time frame, though?

DWYER:

I think a two-year time frame's more than enough in this market. This is a momentum market, whether it be Old Economy or New Economy stocks. And again, the most recent action in Informix, as well as the fundamentals, they agree, the stock wants to go higher.

BUTTNER:

All right, Tony Dwyer from Kirlin Holdings, thanks for doing the drill.

DWYER:

Thank you.

BUTTNER:

Well, how about an answer to this question? What's going to be the hottest sector in the next month? Predictions coming up right after this.

BUTTNER:

Rejoining us from

TheStreet.com

are Herb Greenberg, Dave Kansas, Adam Lashinsky and, in Washington, Gary B. Smith.

OK, Herb, you're up. What's next?

GREENBERG:

I have become a -- just a market timer. I'm -- no more of this microstuff for me.

Smarth

: Beautiful.

GREENBERG:

I told you the Nasdaq was going to hit 4450. It got to 4455. I say this week, the Nasdaq sees 4400.

SMITH:

Herb, you said it would hit 4450 before 5000.

GREENBERG:

And it did.

BUTTNER:

Those are just details, though, Gary.

GREENBERG:

That is just a small point, Gary. But it got to 4455, which is close enough.

LASHINSKY:

You either get a W or an L, and that was an L -- sorry.

BUTTNER:

Gary, you have any -- you want to say anything about that, about the Nasdaq?

SMITH:

Well, first of all, I don't even pay attention to what Herb is saying.

GREENBERG:

Oh, Gary, what is up with you today, Gary?

BUTTNER:

All right, all right, all right. Dave, go right ahead.

KANSAS:

The Nasdaq...

BUTTNER:

Sorry, I thought we were having a discussion.

KANSAS:

... that Nasdaq hit 5000 well before my birthday, so that -- I think the market's a little bit screwy. I think we're going to see drug stocks keep rising. This recent rise in the drug stocks stems from the rising fear, I think, in the market. We're going to see a little more safety, for only 45 days, Herb, because I'm a market timer too. Forty-five days, and then...

GREENBERG:

Forty-five days.

KANSAS:

... we're back into tech.

BUTTNER:

Drug stocks broadly?

KANSAS:

Yes, I think you're looking at the -- mainly the pharmaceuticals, the

J&Js

, the

Mercks

, they...

GREENBERG:

The old Turks...

KANSAS:

... dropped, it bounced off pretty nice in the last couple days. That's for real.

LASHINSKY:

The biggies, in other words.

GREENBERG:

All the money...

KANSAS:

The big pharmaceuticals.

KANSAS:

That's right, all the money from biotechs goes to the drug companies.

LASHINSKY:

And it's a safety game right, Gary?

SMITH:

Yes...

BUTTNER:

He's not listening, don't even bother. All right, Adam.

LASHINSKY:

OK, mindful that Gary B. had to change his direction on

AOL

-- remember, he said it would go to 100 and I said it wouldn't go to 100...

GREENBERG:

You keep milking that, Adam. Give it up already.

LASHINSKY:

... it will go to 80 by August, because AOL,

Time-Warner

...

BUTTNER:

It's right about 65 now.

LASHINSKY:

... is getting its act together.

BUTTNER:

You said...

KANSAS:

Big, big stretch, Adam.

BUTTNER:

So it's going to go to 80 and keep going?

LASHINSKY:

And will not look back, because people will realize this combined company has its act together.

KANSAS:

Oh, no way, this is...

LASHINSKY:

AOL TV is going to help its revenues, etc.

KANSAS:

What are they going to do? Cross-sell

Time

magazine to the AOL subscribers?

LASHINSKY:

They are such powerful operators.

GREENBERG:

You know, everybody who's bet against...

BUTTNER:

Gary...

GREENBERG:

... everybody's bet against Steve Case...

LASHINSKY:

Has been wrong.

GREENBERG:

... has been wrong.

BUTTNER:

Gary, I know you don't listen to us, but we listen to you, so come on, tell us what's going on.

SMITH:

Well, OK. I'm going to sneak in two predictions here. One prediction is that everyone now is going to go out and buy Informix on Monday because it's the first stock...

GREENBERG:

Yes.

BUTTNER:

Herb.

SMITH:

... I've ever heard Herb like. That's No. 1. No. 2, I'm going to give you the hot sector. Drug -- forget drugs, they don't know what they're talking about, these guys. It's energy. That is the place to be, at least for the next four weeks.

GREENBERG:

You have a couple names for us, there, in the energy sector?

SMITH:

Absolutely. No -- yes, OK,

Weatherford International

,

Weatherford Oil

, that's what I like. I'm long Weatherford.

BUTTNER:

OK, All right. Now, if you want to crown the champion, go to

TheStreet.com

Web site, click on the TV page, and rate the predictions. Also, if you'd like, you can send us a question or a comment. And while you're on our site, make sure to check out everything from in-depth market analysis to simple stock quotes, all designed to help you make the best decisions when investing in the market. We'll see you here again next weekend. Until then, we hope that you invest wisely.

END

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