Top Picks / Investment specialists share their strongest recommendations
One Eye on History, the Other on Technicalities The selector: Anthony “The Oddsmaker” Kolton, president of MarketHistory.com (https://www.markethistory.com), a site that focuses on stock market and commodity trends for institutional and individual investors.
His record: Kolton, a pit trader for many years at the Chicago Board Options Exchange before launching MarketHistory.com, won a six-month Strategy Lab stock-picking contest at Microsoft Corp.’s MoneyCentral Web site (https://www.moneycentral.com) earlier this year, with the competition’s best score so far.
His philosophy: He uses historical stock patterns, along with analysis of current technical trends, to predict short- and intermediate-term movements in stocks and other securities.
His picks: E-Trade Group and Lucent Technologies. Unlike some technical analysts who focus solely on momentum, Kolton doesn’t shy away from battered stocks: E-Trade and Lucent are both down more than 45% year to date.
E-Trade Group
* Ticker symbol: EGRP
* Market capitalization: $4.2 billion
* Latest quarter sales: $553 million
* Estimated 2000 earnings per share: ---10 cents
Weekly closes since August 1999, and latest
Tuesday: $14.31
Lucent Technologies
* Ticker symbol: LU
* Market capitalization: $135 billion
* Latest quarter sales: $8.7 billion
* Estimated 2000 earnings per share: $1.12
Tuesday: $40.50
Sources: Bloomberg News, Times research
Since E-Trade shares began trading in 1996, they have traded roughly in step with rival Charles Schwab Corp. (ticker symbol: SCH), Kolton said. “But the spread in share price between the stocks is now near its all-time high,” with Schwab trading for more than 2 1/2 times E-Trade’s price. That “always tends to be a good six-month indicator. We expect to get a blastoff on E-Trade,” he said.
Investors should note, of course, that past performance never guarantees anything. The market has been rough on Web brokerages lately as online trading growth has slowed, though Kolton notes that E-Trade is branching out into banking and other financial services.
His other pick, Lucent, recently did something it has done 10 times before, according to Kolton: In the eight trading days ending July 24 it sank more than 10%. “Nine out of 10 times it has been up one month later, by an average of 10%,” he said. “The one time it was down it lost just 2%.”
This time, though, the stock has so far lost a fifth of its value since July 24, hitting a 52-week low Tuesday. Even if Lucent doesn’t rebound by Aug. 24, Kolton still believes the stock is getting too cheap to ignore. “The time to buy these things is when nobody wants them,” he said. “Cellular and communications is a great industry, and this stock is trading at about half of December’s price.
