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CNN Saturday Morning News
Interview With Hans Kashyap
Aired July 27, 2002 - 07:21 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: There was a turnaround on Wall Street this week, but was it a signal for cautious optimism, or should investors upgrade their strategy?
Joining us now with some tips to help you survive the topsy-turvy markets, Hans Kashyap. He's a market forecaster and president of Analytics Research Corporation.
Good morning. Are you awake this morning after that wild ride on Wall Street?
HANS KASHYAP, MARKET FORECASTER, ANALYTICS RESEARCH CORPORATION: Oh, good morning, Catherine. Yes, you can't help be awake after that.
CALLAWAY: Wow, you know, it's just amazing. I think every day when I'm watching the numbers that I'm not going to be amazed, and yet I am.
You know, do you think the way we ended the week is going to be a new trend? Let's hope so.
KASHYAP: Yes, absolutely. Actually it is. We had forecasted that this past week we should have seen some type of low, and, you know, the much-ballyhooed word of "capitulation" actually did come through, maybe not the massive final capitulation, but certainly a mini-capitulation.
It happened on Wednesday, when the S&P 500 hit the 780s to 750s, which was our target. And that sharp, sharp rally, the Dow gained 480-some-odd points, really is indicative of a tone now, at least on a short-term basis, for the next several months, I think.
CALLAWAY: You know, Hans, the big question, of course, is buy or sell? And I hope retirement is a long way down the road for me, so I try to think that I just hold onto what I have and not sell. But is that really good advice these days?
KASHYAP: Well, you know, we're in a -- it's a different paradigm right now that we're in. In a bull market, buy and sell, buy and never sell, all these strategies work out. And, you know, there's no problem.
But in a bear market, one has to realize that over time, the valuations are going to go lower instead of higher. So buy and sell really isn't the right strategy. You more or less have to treat it as a trading market. And what that means is, when the market is down like 25, 30 percent, that's the time to invest or buy.
And then once the gains -- you have gains of whatever, 25, 30 percent back up or even 40 percent, then it's time to lessen exposure and move into fixed income or certain other asset classes.
CALLAWAY: So you're saying when it's up 30 percent, sell it.
KASHYAP: Well, yes. At this point, you know, remember, if you envision a mountain chain, if you move the mountain chain to the right, that's a bull market. But if you move the mountain chain to the left, it's a bear market. So we're going to, after this next -- this is a valley, we're going to go to the next peak. And then we're going to come back down and reach us this valley again, or maybe even make a lower valley, (UNINTELLIGIBLE)...
CALLAWAY: But Hans, it's so much easier just to sit on it then to have to, you know, trade like that. I just think...
KASHYAP: Well...
CALLAWAY: ... a lot of us have gotten lazy.
KASHYAP: Well, that's true, I mean, it's -- the go-go years of the last 20 years, some-odd years of the bull market, made us all complacent. I mean, whatever you bought went up. So...
CALLAWAY: Right.
KASHYAP: ... you know, now it's really to the point where, you know, it takes time and effort and concentration, really, to make money. But it doesn't take a whole lot. I mean, one can really look at where things are on a weekly basis, not even on a daily basis, and sort of get a generalized idea of, you know, keeping track of the stocks and buying and then selling.
CALLAWAY: Right.
KASHYAP: And right now, I think the time really is for the blue chips. They've held up very well. And the S&P 500 stocks have held up very well.
CALLAWAY: Yes, they have.
KASHYAP: The Nasdaq ones are the -- they're still depressed, and there still may be more downside to go, even while these other sectors hold up pretty well.
CALLAWAY: Yes, well, let's hope they stay up, all right? Hans Kashyap...
KASHYAP: Yes, at least into September.
CALLAWAY: ... thank you so much, Hans, we appreciate your getting up so early with us this morning after the wacky week we had there, and that was a busy one for you. Thank you very much, Hans.
KASHYAP: Sure.
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