Holland: Many Dot.coms Are Now 'Dot.bombs'
DARYN KAGAN, CNN ANCHOR: With more now on what's going on in Wall Street, what was happening last week, could it continue into this week? Let's bring in Michael Holland, he is chairman and -- of the investment advisory firm Holland & Company. Michael, good morning, thanks for joining us.</s>MICHAEL HOLLAND, STOCK MARKET ANALYST: Daryn, thank you for having me.</s>KAGAN: Let's look at some of these incredible numbers that took place last week after some very kind of funky, in the funk markets recently. The Dow -- you like my technical terms there, the Dow last week up 495 points for the week.</s>HOLLAND: Right.</s>KAGAN: The Nasdaq up 608 points, incredible jumps.</s>HOLLAND: Right.</s>KAGAN: What is going on here? It's not just about some encouraging unemployment numbers.</s>HOLLAND: No, I think it's even more direct than that, Daryn. What it is, is the stock market has said that it believes that Alan Greenspan and his Federal Reserve governors have won the fight, that they've taken a lot of the steam out of the market and out of the concern that inflation was going to be a problem. And therefore interest rates would have to go even higher than they were. The market is saying, as of last week, we've got some very strong indications that the economy is cooling a little bit and we won't have any more interest rate increases.</s>KAGAN: Enough already, in other words.</s>HOLLAND: Enough already, take a summer vacation, exactly.</s>KAGAN: Yes, just give it up, Mr. Greenspan. So do you think this is a rally that's going to continue?</s>HOLLAND: I actually do, I think that we've had such huge declines in so many good companies. Now there was, to be sure, a large group of companies that probably had no business even being in the public marketplace and they're down a great deal. But a lot of the really good, great companies, for example, have been taken down dramatically. I think that we probably have very good buying opportunities here through the year end.</s>KAGAN: So what's a small-time investors to do? Mention some of those companies that you're actually thinking of.</s>HOLLAND: Well, the small-time investors are the smartest investors, if you look at the numbers. He or she has been buying on these dips as they refer to them, ever since this bull market began, while we institutional traders have actually been selling them, and wrong therefore. The large technology companies, the Hewlett- Packards, Intels, even Microsoft look -- have extremely good futures and are -- have been knocked down a reasonable amount and are very reasonable in terms of their valuation, in terms of their earnings: what people are paying for them. In addition, a lot of the financial companies, Daryn, have been knocked down as well, in fear of interest rate increases. So a lot of the banks and brokerage houses, I would look at things like Merrill Lynch or J.P. Morgan, Bank One out in Chicago. There are a lot of really good companies, it's actually a buyer's paradise right now, for a lot of industries.</s>KAGAN: So do you think the lesson's been learned by investors: don't jump in on these stocks that don't have great earnings and whose prices are way inflated?</s>HOLLAND: Boy, that's a great question. I think that there's been a chastening there that will last for awhile. Memories grow quite short on Wall Street, but I think this last chastening, this last decline in a lot of these companies, they've been wiped out. A lot of people in these, particularly the dot.com companies, which referred to the Internet companies that shouldn't be public, they now have become "dot.bombs."</s>KAGAN: "Dot.bombs," that's a good way for -- to remember a hard lesson learned.</s>HOLLAND: Exactly.</s>KAGAN: Michael Holland, thanks for joining us this morning.</s>HOLLAND: Thanks, Daryn.</s>KAGAN: Appreciate it.