Christopher Edmonds chatted on AOL MarketTalk, Monday, Sept. 11 at 5 p.m. EDT.

Comment:

Live from Atlanta, GA, please welcome Chris Edmonds, contributing editor,

TheStreet.com

. Chris can answer questions about the markets, funds, utilities and the wheelings and dealings of Warren Buffett. Visit Keyword: TheStreet.

Sage Lion:

It's great to have you visit with us in MarketTalk today Chris!

CSEonTSC:

Great to be back on AOL and Sage. What a wild day in the market. The NASDAQ all over the place, the Dow not sure what it wants to do. . . and oil, energy, and utilities as highlights. Gee, reminds me of the 1970s.

Hit me with your best questions, I'm game for them all. Here we go!

Question:

What do you make of the markets in general here?

CSEonTSC:

Wow -- they go up, they go down . . . I'm not sure. . .

Actually, I think we are in a pause, consolidation if you will. Too much uncertainty regarding energy and how it will impact earnings in the 3Q and beyond. Good news is I think the Fed is done (for now) and that is a positive. We just need a couple of weeks to sort this energy stuff out!

Question:

Do you think alternative fuels will have a profitable future?

CSEonTSC:

Great question -- I do, there is no question that fuel cells, small peaking power plants and even wind and water are big future plays. Investors sure think so. . .look at Plug Power, Ballard Power, and Fuel Cell Tech as examples. A little ahead of themselves, but good examples of the potential in the future.

Question:

Crude Oil Analyst Phil Flynn of Alaron Trading has suggested that $40 a barrel is a real possibility. What are your thoughts?

CSEonTSC:

Wouldn't argue with Phil, he's pretty smart. That said, in the short term I think high 30s are clearly in sight. And $40 isn't far away. In a piece a couple of weeks ago Goldman Sachs' economists said they think there is a 10% chance of $50 oil before we come off the highs. Remember, too, those are relatively short term forecasts. Before the end of the year. . .WOW!!

Question:

Why have analysts been skeptical in regards the suggested Phillips Petroleum (P)Chevron (CHV) merger?

CSEonTSC:

Good question -- first, the story came from a London paper, the Sunday Times, which is strange in that you have two US companies that you think would be better known by the US press. Second, the story in the Times wasn't completely accurate. Third, the concern over regulatory issues remains, although not as great -- as I wrote at

TheStreet.com

yesterday -- as they would have been in a Chevron/Texaco deal. My sources tell me this is a real possibility. . .after all they know each other pretty well from the chemical merger. . .

Question:

Do you see anything happening in the markets to warrant having some type of bear fund?

CSEonTSC:

Good question, don't think I would own a complete bear fund here, they are so heavy in metals and the defensive plays that won't be very defensive in the type of market downturn we might see. My best suggestion -- and

Jim Cramer

talked about this last week -- is to play your stops very tight and look for well-defined, disciplined shorting opportunities to hedge your portfolio.

Question:

How do you feel about health stocks in regard to the upcoming election?

CSEonTSC:

Clearly, drug stocks and health care concerns are under pressure because the polls suggest Gore is leading and that will be bearish for health care stocks, especially drugs. I think you need to be careful, but I think the drug companies present some interesting opportunities at these prices. I've been buying -- slowly -- some PFE and looking at the others.

Question:

Do you feel actively managed funds are the best way to go considering the current market conditions?

CSEonTSC:

The debate over index versus active management continues. You need to define the question or issue better -- do I choose index funds over bad managers -- yes. Do I choose people like Bill Miller at LeggMason over the indices....yes.

Question:

Has Warren Buffett changed his style as the years have gone by or has he kept his same perspective?

CSEonTSC:

Buffett is Buffett is Buffett. . .look at the Shaw acquisition last week. Classic Buffett!!

Question:

Last time you were on, you were dead certain that the "X-Men" movie would not give a boost to Marvel Enterprises (MVL), and you were very correct. What led you to this very perceptive insight?

CSEonTSC:

Gosh, I'll have to go back and look at the transcript. I don't remember that call. . . However, I'll take credit. Must have been something I read on

TST Recommends

TheStreet.com

. :)

I think I also may have had some input from the kids around the house!

Question:

Is it too late to pick up a good financial stock and what would you suggest if it isn't too late? Thanks.

CSEonTSC:

Not at all -- As a matter of fact, I like the financials in here -- I think the brokers may have run a bit too much but there are a number of regional banks that still look attractive and, even with the political uncertainty, I still like FannieMae (long) and FreddieMac (no position). I'd scour the regional banks looking for good ROE and relative value on a PE and ROA basis. You'll find plenty of bargains, all over the country.

Question:

Would you be a buyer of Glaxo(GLX} and or Smith Kline Etc (SBH) at this time? Thanks.

CSEonTSC:

Don't own either -- like Glaxo's past innovations and Smith Kline is clearly on my radar screen. However, like PFE and MEK as proxies for the drugs at this point. Long PFE only that's MRK, not MEK.

Question:

Does it appear that health care REITs are on the mend?

CSEonTSC:

Good question -- the healthcare REITs will act like the health care stocks. That said, be careful because of debt load and tenant issues right now. Health Care Properties is a great company. Healthcare REIT is a good operator. The others I would probably wait on. The recent run in many of the names make them fairly valued. Look at the last REIT Roundtable on

TheStreet.com

and my

piece last week on REIT debt for more answers to those questions!

Question:

Do you like Utilicorp?

CSEonTSC:

An interesting company. The Green family has done a great job building a solid franchise in the Kansas City area. Nice move in the stock today. They will have some integration issues with the Empire District and St. Joe acquisitions. The real growth engine will be the success of their Acquila trading and marketing biz.

Question:

Do you see a bounce back for Nokia?

CSEonTSC:

I'm long Nokia and love the long-term prognosis. I think there are some short-term demand issues but nothing that keeps me away from the stock. My colleague,

Herb Greenberg

has written a lot about the potential slowdown in handsets which is real. That said, I think new innovations will drive consumers to upgrade and that should drive the stock next year.

Question:

What's your long and short term outlook on JNPR?

CSEonTSC:

A survivor in its space. . .that said, tech is rocky in here and the jitters are likely to continue. I don't own but watch it everyday!

Question:

Does the United Kingdom based utility, National Grid PLC (NGG), planned acquisition of Niagara Mohawk (NMK) make good business sense?

CSEonTSC:

From NiMo's perspective, yes it does. From NRG's perspective, maybe. Check out

TheStreet.com

last week for my complete opinion. It is very mixed. It does mean NoMo, NiMo which is good for NiMo shareholders.

Question:

What effect will OPEC's increased oil production have on the economy and the stock market?

CSEonTSC:

The impact won't be positive. The increase is mostly a head fake sense Saudi Arabia already was overproducing by 500,000 barrels. That said, there are numerous other problems in energy other than OPEC -- getting the oil here -- transport, is a big problem. As is refining once it is here! Little positive impact on either by itself!

Sage Lion:

Thank you for joining us today Chris! Can we get your thoughts going forward?

CSEonTSC:

Thanks to everyone at Sage -- enjoy it as always -- it's a tough market out there right now. Tread lightly, keep your stops tight, and trade well. That is where the money will be made in the next several weeks. Look forward to coming back soon. The questions are always top notch. And Sage, you guys do a terrific job. See you on

TheStreet.com

and

RealMoney.com

.

Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta. At time of publication, Edmonds' firm was long Nokia, FannieMae and Pfizer, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send it to

Chris Edmonds.