This Bull Has Legs

The longest bull market in history stampedes on

Diamond takes an interest in what companies backing bonds are telling stock investors. For example, analysts at her firm will sit in on meetings with publicly traded companies in order to glean information that may not suit an equity analyst but could be music to a bond analyst’s ears.

She cites Seagram (NYSE: VO) bonds as an example. At a recent meeting, company officials noted that because the company’s debt was downgraded, they needed to improve its balance sheet to repair its credit ratings, rather than buy back stock.

Other sectors Mosley Diamond likes: bonds issued by European banks, figuring bank consolidation will boost the creditworthiness of their securities, and bonds backed by real estate investment trusts (REITs), a downtrodden sector that could experience debt upgrades in the future.

Roundtable
Update
Last year, we asked our panel of experts to give us their top investment picks. The results were split evenly, evidence of a market that embraced tech and dotcom stocks while shunning cyclical, old-economy shares. Of the 12 stocks they recommended, just half were up year over year, with two-Cisco Systems and EMC-posting triple-digit returns. Meanwhile, stocks like Elan and Longs Drug Stores-both suffering double-digit losses-had the misfortune of being in the out-of-favor pharmaceutical sector. Below are the stocks of last year’s participants and how they fared:
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C. KIM GOODWIN, AMERICAN CENTURY INVESTMENTS

Stock (Exchange: Ticker)

Current Price*

Price at Recommendation**

Total Return

EMC (NYSE: EMC)

$117.00

$50.00

134.00%
Microsoft (Nasdaq: MSFT)

107.00

81.31

31.60
Vodafone Airtouch (NYSE: VOD)***

58.00

38.62

50.18
DEBORAH FRAZIER, MERRILL LYNCH

Stock (Exchange: Ticker)

Current Price*

Price at Recommendation**

Total Return

America Online (NYSE: AOL) $64.88 $37.13 74.74%
Cisco Systems (Nasdaq: CSCO) 112.31 53.06 111.67
Pfizer (NYSE: PFE) 37.00 39.57 -6.50
STEVEN SINGLETON, ROBERT VAN SECURITIES

Stock (Exchange: Ticker)

Current Price*

Price at Recommendation**

Total Return

Intel (Nasdaq: INTC) $100.06 $69.00 45.02%
Lucent (NYSE: LU) 51.44 57.68 -10.82
MCI Worldcom (Nasdaq: WCOM) 45.06 51.67 -12.79
LOU HOLLAND, HOLLAND CAPITAL MANAGEMENT

Stock (Exchange: Ticker)

Current Price*

Price at Recommendation**

Total Return

Elan (NYSE: ELN) $26.63 $34.90 -23.70%
Longs Drug Stores (NYSE: LDG) 24.94 36.77 -32.17
Mellon Financial (NYSE: MEL) 31.00 33.43 - 7.27
*As of January 19, 2000
**As of January 20, 2000
***Result of merger between Vodafone and Airtouch. Note: All prices are adjusted for splits, dividends and mergers.
Source: Yahoo! Finance
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