02/25/04: Joseph Parnes, President of Technomart Investment Advisors Says Where Best To Invest?

	PAUL KANGAS: The stock market`s recent light trading activity and lack of strong direction has many investors puzzled, so to look at the reasons behind this complacency and to find out where best to invest during this period, joining us tonight is Joseph Parnes, president of Technomart Investment Advisors, based in Baltimore, Maryland. And Joseph, thanks for being with us.

JOSEPH PARNES, PRES., TECHNOMART INVESTMENT ADVISORS: Thank you for having me on.

KANGAS: The stock market really has been rather quiet without strong direction recently, why are investors lacking conviction here?

PARNES: I think the market is saying that the tremendous raise that it has had from almost 50 percent for the NASDAQ and 30 percent Dow, and 26 or 28 percent for S&P 500 and 600, is a form of digesting, while in retraction mode. I really believe that this kind of skepticism and non-complacency is good for the market. So if you look back, the market has been rolling in a channel (ph) pattern 930s, then 940s, then 960s, all the way up to 10,300, now it?s around 10,700. I think this consolidation is healthy and therefore the contrarian will be enforced and I imagine that market will use these forces to go up much higher.

KANGAS: What will cause us to snap out of this complacency?

PARNES: Well, good news is coming from the indicators, I think those are pluses, and also if there is a drop in the oil prices, if there is a drop - a rise in oil - or in gold, as well as the dollar, for example, that will be helpful. Plus if the negatives revolving around of the current election evaporates.

KANGAS: OK. What positions should a conservative investor take under these current conditions?

PARNES: I would strongly suggest for investors to have a little bit of diversification. The four that I have chosen, I would say Advanced Micro Devices (AMD), AMD, which would be beneficial for the investors because they would be benefiting from their new products such as Opteron/64 bits.

KANGAS: Right. Advanced Micro Devices, that`s one you like.

PARNES: That`s right.

KANGAS: OK.

PARNES: And also Microsoft (MSFT), I think Microsoft with its cash will eventually be purchasing these stocks and giving good yield.

KANGAS: Do you think they`ll use that cash to buy back stock or give a nice healthy dividend to shareholders?

PARNES: I think it could be a combination of both, after all, it could - probably generates about $3 billion every quarter, and a holding of almost $60 billion.

KANGAS: All right. OK. Some other suggestions?

PARNES: I would say Goldman Sachs (GS), GS, that would be good for the financial sector, especially with the merger activist, and also P/E is much lower with its colleagues in the field.

KANGAS: And you think there is going to be an increase in merger and acquisition activity, that where they benefit a lot?

PARNES: Oh, I think so. I think that also - slowly, as the market improves, the IPO market will also - it regenerates and these kind of companies will benefit. And lastly I would say Boston Scientific (BSX) in the medical devices...

KANGAS: But they`re getting a little competition from Johnson & Johnson (JNJ) Cordis and Guidant (GDT) now, right?

PARNES: I think that`s planned, but I think because of the new items coming into the marketplace, and approved already in Europe and will be approved here, that normally generates doctors order these new products including Taxus stent. These could probably capture between 60 and 70 percent of the market. I think the change in the price would be a good idea right now to accumulate.

KANGAS: All right. So it`s Boston Scientific, Advanced Micro Devices, Microsoft and Goldman Sachs. Do you personally own any of these stocks?

PARNES: We own them within our portfolios.

KANGAS: OK. Very good. Joseph, thanks very much for taking the time to be with us.

PARNES: Its been a pleasure.

KANGAS: My guest, Joseph Parnes, president of Technomart Investment Advisors.