Tracey Picks Stocks on WBBM Radio

Written by Tracey

September 14, 2007 07:49 AM

Last week, on September 6, I appeared on Chicago’s WBBM Radio’s Business Lunch Hour in the Portfolio Doctor segment.

I had to give buy, sell or hold recommendations on three stocks that a listener had asked about.

The stocks that week were: Goldman Sachs, Federal Express and Kellogg.

I rated Goldman Sachs a “sell” and Federal Express and Kellogg a “Buy.” You can read my recommendations on the WBBM 780 website here.

Goldman Sachs, or any of the financials, are tricky right now. If you bought Goldman several years ago you likely have quite substantial gains. It may behoove you to sell and take your profits off the table until you see what happens with the financial sector (as I believe more pain is coming for many of the financial companies.)

But I also believe in buying and holding so if your time horizon is ten years or more (as it should be) then Goldman will ultimately bounce back from what is happening right now. You’ll have some pain right now, but you’ll have to be patient. If you have a long time horizon, you should hold.

I like Goldman Sachs in general and consider them to be among the blue chip companies on Wall Street. But we don’t yet know who will survive this mortgage and credit fallout. It behooves investors to be cautious here.

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5 Responses to “Tracey Picks Stocks on WBBM Radio”

skh.pcola Says:
September 15th, 2007 at 12:01 pm

I wouldn’t own GS even at the current $100 billion due to reset in Jan09 alone?), GS and others in the sector are exposed to ridiculous amounts of risk.

Even if an investor wanted to hold GS long-term, it would make more sense (to me, at least) to sell now and buy back when (and if) the stock tanks. That’s not buy-and-hold, but it provides a good front-loaded return, and reduces risk.
skh.pcola Says:
September 15th, 2007 at 12:02 pm

Erm. That’s not what I wrote^^^. Here’s what I typed in the other box:

I wouldn’t own GS even at the current $100 billion due to reset in Jan09 alone?), GS and others in the sector are exposed to ridiculous amounts of risk.

Even if an investor wanted to hold GS long-term, it would make more sense (to me, at least) to sell now and buy back when (and if) the stock tanks. That’s not buy-and-hold, but it provides a good front-loaded return, and reduces risk.
skh.pcola Says:
September 15th, 2007 at 12:05 pm

Hmm. Sorry Tracey. I used “less than” and “greater than” symbols, and the blog software interpreted them as HTML tags. Here’s my original comment:

I wouldn’t own GS even at the current (less than)9 P/E. They’re on the hook for billions of dollars, and with all of the resets coming due (aren’t (greater than)$100 billion due to reset in Jan09 alone?), GS and others in the sector are exposed to ridiculous amounts of risk.

Even if an investor wanted to hold GS long-term, it would make more sense (to me, at least) to sell now and buy back when (and if) the stock tanks. That’s not buy-and-hold, but it provides a good front-loaded return, and reduces risk.
Tracey Says:
September 16th, 2007 at 8:38 am

Did you go to the link about what I said about GS? I basically said what you wrote that I would sell if I had big gains right now and then I would wait and invest later if/when the stock tanks (as we don’t know what’s going to happen with the financials in the next few months.)

Anything is possible.
skh.pcola Says:
September 17th, 2007 at 10:10 pm

Um, yup. I should’ve followed your link. We concur, but I would dump a GS position now, whether I had any gains or not. Volatility aside, GS’s immediate future is too flaky to stay in the stock.