The following is an excerpt from this week's Martini Chat, an hourlong, online program on market and current events at 5 p.m. EST every Thursday, hosted by TheStreet.com columnist Chris Edmonds and reporter Eric Gillin. To participate, visit TheStreet.com just before the show begins, and click on the invitation. To read the entire Martini Chat transcript, click here.

Eric Gillin:

It's time for our weekly markets roundtable. Joining us this week are two veterans of the roundtable: From Omaha, Ted Bridges of Bridges Investment Counsel, and from Princeton, N.J., Howard Alter of Alter Asset Management. Welcome to you both.

Howard, I'll begin with you. The resilience of this market is pretty amazing. Can we keep it up?

Howard Alter:

I'm actually not managing money. I'm taking my 4-year-old son and working on golf with him. The resilience of the market has been incredible. The geopolitical situation is improving, and people are putting their money to work.

Eric Gillin:

Ted, what are your thoughts about the Dow at nearly 9900? Should I dust off my Dow 10K hat?

Ted Bridges:

You can have mine. It's hardly been worn. I would say longer term, we're still constructive here. The investors' best ally now is time. Shorter term, people have been surprised at the strength of the rally. We may see some profit-taking here.

Chris Edmonds:

Howard, clearly there are a number of impacts from the continued decline in the price of oil. This OPEC meeting was a disaster. How can investors play the recent weakness in oil prices? What's the impact on the economy?

Howard Alter:

I'll take the last question first. The impact on the economy is good. When prices were firmer, a number of companies were talking about margin squeezes, and we see relief there. In terms of how to play this, we're looking at Exxon now as a name that we'd want to own on the way down. And the stock has come down significantly and is back again where it was whenthe market opened after the tragedy in New York. The time you want to buy is when there is significant uncertainty. We had a drop in prices today. But we won't go much below 12 to 13 dollars. Eventually the Russians are going to realize that they are only hurting themselves.

Chris Edmonds:

But your focus would be on the integrated names, not necessarily the drillers or the service names?

Howard Alter:

The integrated names provide value, and they provide dividends.

Chris Edmonds:

Ted, any thoughts?

Ted Bridges:

Chris, I would defer to you because you have the background. But I would say that we're looking and getting interested. From a long-term perspective, you want to buy when there's a lot of uncertainty and not fear and concern. These prices reflect that. The question is valuation.

Eric Gillin:

Time for some holiday cheer. We're coming into the home stretch here. Hard to believe there are only seven weeks left in 2001. As Thanksgiving approaches, what are two or three stocks you are most thankful for? Ted?

Ted Bridges:

I would give a couple. First is Capital One. It gives you the best of both worlds. It's down 15% to 20% year to date, but performance is outstanding. It's down for two reasons. Providian has blown up in a high-profile disaster. And people are concerned that going into a recession, consumer finance companies carry more risk. If you look at the operations and its long-term performance and how it's trading out, which is probably up 20% in the past month but still trading at 15 times next years earnings for a company that is a solid bet to grow for the foreseeable future, it's a bankable name.

EricGillin:

Howard, what are you giving thanks for in your portfolio?

Howard Alter:

Well, I'm a New Jersey Nets fan, and the Knicks are having a hard time this season and so is Cablevision. Cablevision has come down significantly. It is a cable television operator, and it owns sports teams and Madison Square Garden. The company has 3 million

subscribers in the New York city area alone. Its basic cable and high-speed Net service has been consistent and sustainable. Right now we're really happy about the Nets.

Chris Edmonds:

This year has produced lots of turkeys. Howard, what is your biggest gaggling investment of the year?

Howard Alter:

Ours is a chicken. Not one we bought but sold way to early: TriCon Global, a spinoff of Pepsi. They have KFC, Pizza Hut and Taco Bell. We lost faith in management's ability to turn Taco Bell around. The company did a better job than we thought. We've left a lot of money on the table that we wish we hadn't.

Chris Edmonds:

What are you doing with the stock now?

Howard Alter:

The stock has moved to 51-52, and we certainly wouldn't be a buyer here.

Chris Edmonds:

Ted, how about you?

Ted Bridges:

If Howard was hanging out with our family, he never would have sold because we always go to Taco Bell! Level 3 was our turkey for the year. We started buying aggressively about this time last year. The company was building out a telecommunications network. It was down 75%; it bottomed at $1.89 a month ago. I think we haven't see the last.

TheStreet.com

had articles in the last day or two. We still remain very constructive long-term.

Howard Alter:

That was our No. 2 on turkeys as well.

Ted Bridges:

I would agree with you. While the company maybe made some errors, it has done a terrific job in the worst time you can imagine. Now it has been buying back its debt. With Level 3, it's never easy but always interesting.

Chris Edmonds:

Let me jump in with a question about Level 3 and Buffett. There were all sorts of rumors when things were really their darkest that because of Buffett's relationship there, that he might have interest or he might take a stake. But could there be any truth to that?

Ted Bridges:

The closest analogy I can come up with is when Buffett and Walter Scott together took Cal Energy private a couple of years ago. I think Level 3 looks like a utility, a lot riskier utility. It's a start-up in a sense. A utility dealing in a commodity that's next century as opposed to oil or gas. I would never rule it out, but in the short run, it stretched my imagination to think there was something live there. Never say never.

Chris Edmonds:

Howard, you're a Berkshire holder, any thoughts?

Howard Alter:

He might be more interested in debt now. Over the last few weeks, there's more optimism that equity folks may come out good. The returns are attractive.

Ted Bridges:

That's a good point. The odds on Buffett with the equity would be one in a million. That would make sense.

Eric Gillin:

What was the biggest lesson you learned this year?

Ted Bridges:

This year the thing I've been re-educated on is that valuations always go further higher and further lower than you expect.

Howard Alter:

We keep getting slammed every time we leave our core confidence. Our bests are where we really know the players and investors. Every year we think we know more than we do and get into places where we'd be better off keeping capital in our core level of confidence. Stick to what you know.

Eric Gillin:

Despite scary news reports and panicky people, especially here in New York City, there is much to be thankful for. What companies, stocks, investments or phenomenon are you guys most thankful for?

Howard Alter:

The buying we did after Sept. 11, especially in retail, some heavier Disney buying, was helpful. Buying at a time of max fear when the valuations are all good usually leads to some good long-term outcomes. It has surprised everyone.

Ted Bridges:

I would say, you're thankful for your discipline. Sometimes it leads you away from your core confidence. There's a way to ensure that you get there. Stay with what you know. You need to take a long-term perspective on the equity market. I'm thankful we have the courage to throw some money at it when it seemed like it couldn't get worse, and that will help us mitigate what has been a tough year. We tend to look at things five, six, seven years out.

Chris Edmonds:

I'm thankful for the two of you and the other guests on our show that provide insights and make our listeners and readers better investors. We'll have you back soon. Since we have a holiday next week, happy Thankgiving!