ALI VELSHI, CNNfn ANCHOR, THE MONEY GANG: All right, welcome back to THE MONEY GANG. As we do every day at 2:00 Eastern Time, we start "Talking Stocks." And that means that, for the next hour, you out there have a chance to call us and ask questions about the stocks that are on your mind.
Our guest is Douglas Lane, of Douglas C. Lane & Associates. Phone lines are open, 1-800-304-3638. You call in and, if Doug has something informative to say about the stock that you want to talk about, we`ll get your call through, as long as we can - you know, as long as you`re in line for it. We`ve also got the same thing on e-mail, MoneyGang@CNN.com.
Now, before we do that and while you get a chance to think about what you want to ask Doug, let`s see how the New York Stock Exchange is doing. Rhonda Schaffler is following trading on the markets. She joins us now.
Hey, Rhonda.
RHONDA SCHAFFLER, CNNfn CORRESPONDENT: Hi, Ali. Day three of a rally on Wall Street under way, and, of course, the latest inspiration to buy stocks came in the form of that jobs report, much better than expected for the month of October. So that prevented any sort of profit taking, even though, for instance, yesterday, we saw the Dow put in its best performance in more than a year.
Today, we`re looking at the market holding on to moderate gains. And keep in mind, in the past two weeks, the Dow has been up better than 6 percent, as has the Nasdaq and S&P 500. So it`s been a banner two weeks on Wall Street.
We want to take a look, though, at one stock that is not sharing this success story, and that`s Merck [Company: Merck & Co. Inc.; Ticker: MRK ; URL: http://www.merck.com/] , which is down again today by another 3 percent. This is after "The New York Times" reported that hundreds of plaintiffs` lawyers are planning to meet next week to lay the groundwork for a legal assault on the company, claiming their clients were injured or died from using Merck`s painkiller Vioxx, which was taken off the market in late September. The stock really has just fallen dramatically since that news and unable to recover, as you can see from the chart. The stock is down more than 40 percent since Vioxx was taken off the market.
We want to take a look at some moves made by Piper Jaffray now, as far as the retail sector goes. It lowered its rating on Aeropostale [Company: Aeropostale Inc; Ticker ARO; URL: http://www.aeropostale.com/] and Williams-Sonoma [Company: Williams-Sonoma Inc.; Ticker: WSM; URL: http://www.williams-sonoma.com/] to market perform, citing valuation. Piper Jaffray saying both these stocks have approached their respective price target. The downgrade on Aeropostale should not be viewed as an expectation of a deterioration of sales, the brokerage firm says, but more or less a cautious step back.
Williams-Sonoma also close to its price target, and there were concerns over the selling environment for the retailer, but the brokerage firm says Williams-Sonoma houses some of the finest brands in retailing, so really just a valuation call. Of course, we were tracking all those with same- store sales very closely yesterday from retailers.
Switching gears a bit now, we want to focus in on Atari [Company: Atari Inc. ; Ticker: ATAR ; URL: http://www.atari.com/] . Remember that name? It`s the video game maker. It posted a narrower second-quarter loss than what it had a year ago, and that was an improvement that was even better than what Wall Street was looking for. Revenue, in the meantime, up some 18 percent, helped along by better-than-average selling prices and increased sales of some of its higher priced console products.
And ValueClick [Company: ValueClick Inc.; Ticker: VCLK; URL: http://www.valueclick.com/] , the online ad company, is seeing its stock surge today. It posted third quarter net that nearly quadrupled, beating estimates, revenue up some 92 percent. It cited increases in online spending, helped by the adoption of high-speed internet access among its consumers. It also raised its forecast for the rest of this year and confirmed a forecast for 2005. All of that was good enough to send the stock up some 16 percent - Ali.
VELSHI: All right, Rhonda, thanks very much - Rhonda Schaffler at the New York Stock Exchange.
Let`s start "Talking Stocks" with Doug Lane of Douglas C. Lane & Associates. Call us with your questions for Douglas, 1-800-304-3638. E- mail address is MoneyGang@CNN.com.
Doug, good to see you.
DOUGLAS LANE, PRESIDENT, DOUGLAS C. LANE & ASSOCIATE: Good to see you.
VELSHI: Thank you for being with us. Boy, this market is liking this election result. I don`t know if they`re liking the fact that there is a result or it sounds to me like we`re past that and that the market is actually liking the fact that this administration was re-elected.
LANE: I think you`re going to get a year-end rally here. You start off with liking the lack of uncertainty, and then it`s going to carry it through because the numbers are reasonably good. The economy`s reasonably good, and the market had been flat up until the first of November.
VELSHI: The Fed`s expected to raise rates next week. Any impact to that?
LANE: I don`t think it will impact the market per se, but I do think you`re going to see interest rates move fairly quickly upward. And so areas that depend on borrowed money, like housing and autos, they`re probably going to have a tougher `05.
VELSHI: What kind of a return can a good investor get in this market, let`s say, over the next year? Obviously an averaged out return, but what are we talking about?
LANE: We`re looking, for this year, somewhere in the area of 5 to 7 percent for the market. We hope to do a little bit better than that. And next year, we would still stay in the high single digits. I don`t think you should reach. You shouldn`t do things that you might want to do if you thought the market was going to be a lot more than that.
VELSHI: But you like dividend-paying stocks in many cases. Can you up that with dividends?
LANE: Well, you get two - that would include dividends.
VELSHI: OK. Let`s go to the phone lines. Let`s actually go to an e-mail. I`ve got an e-mail here from Elizabeth. It`s very good. The subject matter is "Pfizer Pfallout" with a P - "Pfizer Pfallout." Five years, one year and one week charts show Pfizer going south. Good point. I mean Pfizer [Company: Pfizer Inc.; Ticker: PFE; URL: http://www.pfizer.com/] - this isn`t just a reaction to the Vioxx stuff. Is Pfizer going to be able to survive the Merck crash?
LANE: We`re not a big fan of Pfizer, but it`s more because it`s a to $50 billion in revenue drug company, and so, therefore, it has to come up with so many new drugs in order to grow that we think it`s going to be difficult for them to do. But I do think there is an overreaction to it. I think that the pharmaceutical industry is very attractive right now, and even though we`re not a buyer of Pfizer, I wouldn`t mind if somebody did. We might be a buyer of Schering [Company: Schering-Plough Corporation; Ticker: SGP; URL: http://www.schering-plough.com/] or we might even buy Merck. I know.
VELSHI: Really?
LANE: . it`s the unpopular thing to do.
VELSHI: Interesting, yes, because it doesn`t seem like this problem is going away just immediately. I mean Merck had this $30 drop on the news of Vioxx and then the news that they`ve been looking into e-mails and that somebody might have known something about this at Merck.
LANE: Right. Well.
VELSHI: Doesn`t that - isn`t that a bigger problem?
LANE: The shorts are out there. The media is out there. How many times have we seen this in the past? And they`ll drive it down to some level.
VELSHI: Right.
LANE: . and, you know, but the dividend`s still there, the cash is still there, the company`s still got great products and good R&D. So once the media is finished beating up on them and it goes to court.
VELSHI: Yes.
LANE: . it will last about three years and.
VELSHI: So at some point, you think this thing comes back, sure.
LANE: . it gets to be an old story.
VELSHI: All right, let`s go to our good friend, Steve in New York.
Hey, Steve. How are you doing?
CALLER: Good, very good. Thank you for taking my call.
VELSHI: Pleasure.
CALLER: I`m going to miss your program, I can tell you that, when you people leave in December.
VELSHI: Steve, we`re going to miss you guys, too. I appreciate you saying that.
CALLER: Doug, my question is this. I have a pretty good exposure to energy, but I`m kind of light on the integrated. I do have some Exxon Mobil that I`ve held for a number of years, but I`m thinking of going into British Petroleum. It seems like it`s selling at a 14 multiple with a pretty good dividend. What do you think of British Petroleum at $59?
LANE: Well, I don`t think I`d go into integrateds right now. If you did, British Petroleum would be fine. They`re tied into Russia, and how things develop in Russia will depend on the stock price of BP [Company: BP Amoco Plc; Ticker: BP; URL: http://www.bp.com/] .
I`d prefer you look at oil service. I think that the money being spent to look for oil will impact the oil service stocks, and that`s where we`re putting our money nowadays, not in the integrateds. In fact, we`re actually taking a little bit away from Exxon [Company: ExxonMobil Corporation; Ticker: XOM; URL: http://www.exxon.mobil.com/] , Chevron [Company: ChevronTexaco Corporation; Ticker: CVX; URL: http://chevrontexaco.com/] and perhaps even BP, just because we think it`s going to be difficult for their earnings to hold up if the price of oil comes back down to $40.
VELSHI: Tommy in Texas wants to know if you like defense companies. He especially likes Mine Safety Appliances [Company: Mine Safety Appliances Co.; Ticker: MSA; URL: http://www.msanet.com/].
LANE: Mine Safety is really.
VELSHI: It makes - they`re in the helmet business for the military.
LANE: Yes, yes.
VELSHI: But they do a lot of other stuff.
LANE: Yes they do, and it`s a great company. The charts should be - there it is. It`s fantastic. The company`s done very well, out of Pittsburgh, Ryan`s Family [Company: Ryan`s Family Steak Houses Inc.; Ticker: RYAN; URL: http://www.ryanssteaks.com/] . It`s - you know, buy it and hold it and you`ll be fine. Almost every time I`m on this show, somebody calls on Mine Safety.
VELSHI: Yes, it`s very popular, and we`ve had them on I think - I don`t know if you were here that day. We had them on as our "Stock of the Day." They`ve got some interesting stuff going on, and they own a big piece of the market that they`re in.
LANE: I`ve only followed it for 25 years.
VELSHI: Oh, ho kidding? Do you think of it as a defense stock?
LANE: No.
VELSHI: They`ve got a contract with - they`ve got some contracts with.
LANE: Yes, a lot of people have contracts. I mean defense is Lockheed [Company: Lockheed Martin Corporation ; Ticker: LMT ; URL: http://www.lockheedmartin.com] and L3 and people like that.
VELSHI: All right, let`s take a break. We`ll come back with more of your calls and e-mails for Doug Lane of Douglas C. Lane & Associates.
(COMMERCIAL BREAK)
VELSHI: That`s still the phone number for the Hotel Pennsylvania down there, something, something six-five thousand, down in midtown.
LANE: Yes?
VELSHI: Yes, big supertanker of a hotel. Douglas Lane of Douglas C. Lane & Associates is my guest today, taking your calls and e-mails at 1-800-304- 3638. I guess if I haven`t memorized that number by now, it doesn`t really matter. MoneyGang@CNN.com is the e-mail. I`ve got lots of your e-mails and lots of the calls. Let`s go to Virginia for Bill.
Bill, welcome. Oh, I`m sorry. Bill, hold on a second.
Mary, are you there? Mary, are you on the phone?
CALLER: Yes.
VELSHI: Sorry about that, Mary. Mary`s in California, right?
CALLER: Yes.
VELSHI: Good morning to you.
CALLER: Good morning. My question is regarding FRX, Forest Labs [Company: Forest Laboratories Inc.; Ticker: FRX; URL: http://www.frx.com/] . What is your opinion for next year or two? Thank you.
LANE: What was the stock?
VELSHI: What was the stock you`re looking at, Mary?
CALLER: Forest Labs.
VELSHI: Oh, Forest.
LANE: Oh, Forest Labs.
VELSHI: Yes, FRX, FRX.
LANE: Oh, OK. I think it`s a buy. The stock`s down, some problems with one of the drugs. Their Alzheimer`s drug, Namenda, I think it`s going to have a pretty good outlook, but their technology in this area will result in additional drugs. I think at $42, $44 - isn`t that where it is?
VELSHI: We`re at $42.75.
LANE: Yes. I think it`s a great opportunity to buy it. My - it`s a speculation, to some extent. It`s not one of the big pharmaceutical companies, but it`s a really good, well-managed company. Go ahead.
VELSHI: I have an e-mail here from Mike in Montana. With interest rates possibly rising, is Citigroup [Company: Citigroup Inc.; Ticker: C; URL: http://www.citi.com/] still a good value at its current level?
LANE: No.
VELSHI: Any financials?
LANE: No.
VELSHI: I remember Sarat was in yesterday, and he was talking about the fact that, with the S&P - what, they`ve got 21 percent in financials.
LANE: Yes?
VELSHI: . and you guys are looking at under 10 percent in financials.
LANE: Well, and he was being generous. We`re probably 5 and under.
VELSHI: Oh, no kidding? So you`re just thinking.
LANE: We don`t want to be there. You just want to be there.
VELSHI: Let`s go to New York for George.
Hi, George. George?
CALLER: Thanks for taking my call.
VELSHI: No problem.
CALLER: I was wondering what you think of Time Warner Telecom [Company: Time Warner Telecom Inc.; Ticker: TWTC; URL: http://www.twtelecom.com/]. It really hasn`t done much lately, but their earnings are pretty good. And what do you think of it from right now to next year?
VELSHI: This is the parent company of this network.
LANE: My guess is you`ll probably make something close to 25 to 50 percent on your money over that time frame. I think the stock is very cheap. We like the media area. We like Disney. We like Time Warner, Liberty [Company: Liberty Media Corporation; Ticker: L; URL: http://www.libertymedia.com/] , Clear Channel [Company: Clear Channel Communications Inc.; Ticker: CCU ; URL: http://www.clearchannel.com/], the whole gamut there. And - but Time is really cheap, and go ahead and buy some. I think you`ll be well rewarded.
VELSHI: Steve in Arizona says I am a huge apple believer. I bought Apple at $16, bought it at $21. I bought it at $32. How high do you think it will go?
LANE: I don`t know, but the competition to the iPod is coming, and when you see it, it will be too late for you to sell your stock. So I would - I follow the policy of trimming back.
VELSHI: Yes, I mean that`s a nice gain. That.
LANE: Yes. So I`d take 25 percent off.
VELSHI: Yes.
LANE: . and then I`d wait a while. And if it keeps going, I`d take another 25 percent off.
VELSHI: Because he`s averaging at less than half that price.
LANE: Yes, he`s doing fine.
VELSHI: All right. So.
LANE: But you can`t pick that one point in time to sell. Just take yourself out.
VELSHI: I`ve never forgotten something you said. I think we were talking about DNA, Genentech [Company: Genentech Inc.; Ticker: DNA; URL: http://www.gene.com/] , which was a great gainer for you.
LANE: Right.
VELSHI: In fact - I mean Nucor [Company: Nucor Corporation; Ticker: NUE; URL: http://www.nucor.com/] is another huge one for you.
LANE: Right.
VELSHI: But I think you said, when you pared back from Genentech, you said you`d never - you`ll never think it was the right time selling a part of your position, because if it goes up, why did you sell?
LANE: If it goes down, why didn`t you sell all of it?
VELSHI: Yes. So that`s part of the safety of the whole operation.
Let`s go to North Carolina for Chris.
Chris, how are you doing?
CALLER: I`m doing fine. Thank you for taking the call here.
VELSHI: What`s going on?
CALLER: I`m checking on UPS [Company: United Parcel Service Inc.; Ticker: UPS; URL: http://www.ups.com/] here. I`ve loved this since I bought it last year. It`s been hanging around $65, mid $70s, and it went up over $81 finally on - do you see it going up or splitting in the near future?
LANE: I don`t know about the split, but you talk about UPS and I think it`s a great company. It`s sort of risen here, so we`re not buying it now. We`re going to let it season itself at these levels for a while, maybe six months.
But it`s a good company. If you want to buy it now and wait for a while for it to go back up even further, go ahead, but great company and OK to buy.
VELSHI: I wish we`d forget about the split talk. I mean that doesn`t - that`s not an investment.
LANE: No. Actually, they`ve done studies, and they`ve proven, without a shadow of a doubt, that buying before something splits doesn`t mean anything.
VELSHI: Yes. I mean we certainly seem to think it does because we reach back into the late `90s where these stocks were just going higher and higher and there was speculation of a split, and people would buy it and then it would split. It`s not - it`s not a financial mechanism.
LANE: Right.
VELSHI: It`s something to make $5 - to make a $10 bill into two $5 bills.
LANE: But I`ve been doing this for 35 years.
VELSHI: Yes.
LANE: And convincing people of that is impossible. I now have more shares than I used to have. Therefore, I have something greater than I did before.
VELSHI: Yes.
LANE: You can`t get them to think.
VELSHI: People should be careful. There are a lot of reasons to buy or sell a stock, and that shouldn`t necessarily be one of them. Mac wants to know Amgen [Company: Amgen Inc.; Ticker: AMGN; URL: http://www.amgen.com/] . It`s finally broken past $60. How does one know when the stock has peaked? Is this rally for real? Is it a victory phenomenon? What is the upside and downside over the next six months? I think you sort of started the answer to that a few questions ago when you said you`re not going to know when it`s peaked. You don`t know when.
LANE: Well, Amgen hasn`t done anything. I mean it`s been around $60, $58, $56 for, I don`t know, several years now.
VELSHI: Right. He`s calling that $60 an important point, and I guess if you were a technical analyst, it would be your third time hit that and break it, but.
LANE: They`ve got to come up with a drug to go up higher.
VELSHI: Yes.
LANE: OK. The thing got overvalued considerably. We cut back on our holdings of Amgen, and today - you know, just like Genentech did until they come up with something new out of the blue.
VELSHI: Yes.
LANE: And so (INAUDIBLE) something that we don`t expect. If they do, the stock is going up just like Genentech did.
VELSHI: OK. I want to just take a quick question from - whoever it is; I don`t know who it is - about Microsoft special dividend of $3 per share. Is it possible to buy the stock today, beat the record date, hold on to the stock for a month or so and then sell it after receiving the $3 a share? This is too easy a way to make 10 percent, isn`t it? You are correct. It is too easy a way to make 10 percent. It`s not going to happen. The stock - the day your dividend is paid, your stock drops by the value, so if you have tax advantage that you can take advantage of by getting that $3 - you know, if you`ve got something you can write it off, you`ve got a loss you can write it off against?
LANE: You`d be better off in the stock price than getting the $3 because then you can take the loss. You can`t take much against your income. So it would be income of 15 percent.
VELSHI: Right, so.
LANE: You`re better off selling it and not getting the dividend.
VELSHI: Right. So this is - and we`ve had a lot of questions. We`ve actually done some segments on this because it`s a common question. The short answer is - I mean talk to your accountant. But the short answer is this is not a way to make money.
LANE: No.
VELSHI: A special dividend is not a way to make money on a stock.
LANE: Where it works is in certain trusts that are out there where you get the income and the beneficiaries eventually get the principal.
VELSHI: Right.
LANE: So some people do that to get more money out, but it`s the ex-date, not the payable date that you want to watch for.
VELSHI: Correct.
LANE: So not the record date, not the payable date, but the ex-date.
VELSHI: But even still, when it`s - when MGM [Company: Metro-Goldwyn-Mayer Inc.; Ticker: MGM; URL: http://www.mgm.com/] or Mandalay [Company: Mandalay Resort Group Inc.; Ticker: MBG; URL: http://www.mandalayresortgroup.com/] or whoever it was paid the $8, it`s a one-time dividend. The stock will go down by that amount.
LANE: Right, absolutely.
VELSHI: It might trade around there, but you`re giving it up somewhere. It`s not free money.
LANE: Absolutely. Nope.
VELSHI: Let`s take a break. We`ll come back with more of your calls and e-mails for Doug Lane of Douglas C. Lane & Associates.
(COMMERCIAL BREAK)
VELSHI: All right, we`ve got lots and lots and lots of stuff coming in here. Doug Lane is with Douglas C. Lane & Associates, taking your calls and e-mails, 1-800-304-3638. The e-mail address is MoneyGang@CNN.com.
Joy in Indiana has been standing by.
Joy, welcome.
CALLER: Hi there. How are you today?
VELSHI: I`m excellent. How are you doing?
CALLER: I`m doing OK. I have a question about Kinder Morgan [Company: Kinder Morgan Energy Partners L.P.; Ticker: KMP; URL: http://www.kindermorgan.com/]. I bought it at $55, and I`ve had a pretty good run on it. Is it time to sell it, or should I continue to hold? Thank you.
LANE: You`re welcome. This isn`t a knock on Kinder Morgan, but we`re taking money out of the natural gas stock these days. We think they`ve had the run. This goes to the question on British Petroleum earlier.
VELSHI: Right.
LANE: I think the oil and gas producers, you want to take some money away from them right now and put it in the oil service end of the business. I think the prices are going to come down.
It`s a great company, Kinder Morgan, so it`s not a knock on the company, but we`re taking money out of this area.
VELSHI: Let`s go to an e-mail that I`ve got here on Dell [Company: Dell Inc.; Ticker: DELL; URL: http://www.dell.com/] . I`m just digging it up. Here it is. It is from Ruth in New York. Should I buy Dell before its earnings next week? Do you think it goes higher from there?
LANE: I`m not a fan of buying something because they`re going to report earnings. I don`t think that`s - you buy it because you want to be an investor.
VELSHI: That`s another one of those things that people got used to doing.
LANE: It is a great manufacturing company. It`s not a technology company. It`s a great company. They`ve done a great job. I think they`re going to continue to do a great job. It`s not a cheap stock. That`s why you`ve seen it kind of selling around here for a number of years.
But I think you`re OK. If you really want to own Dell, go ahead, but don`t worry about whether it`s before or after the earnings release, because it`s not going to make - it will make a difference, but it`s unpredictable.
VELSHI: All right, let`s go to - hey, our good friend Grandpa Curt is on the phone.
Hey, Grandpa, are you there?
CALLER: Hey there, guys. How are you?
VELSHI: What`s going on? I haven`t heard from you for a while.
CALLER: Well, I`ve been around. I`ve been around.
VELSHI: Are you doing all right?
CALLER: Well, I`m OK.
VELSHI: Excellent.
CALLER: But, you know, I told you once, Ali, that I didn`t think oil was going to hit $50 a barrel.
VELSHI: I probably agreed with you.
CALLER: Well, this is one time I wished I was wrong.
VELSHI: Yes.
CALLER: . and I don`t say that very often, except when I got married, but that`s - no, no, don`t.
VELSHI: I didn`t say - I didn`t hear that. That wasn`t on TV, Grandpa.
CALLER: All right. Cisco [Company: Cisco Systems Inc.; Ticker: CSCO; URL: http://www.cisco.com/] , what do you think?
LANE: You know, I bought my first Cisco in a long, long time. I`m talking about years.
VELSHI: That`s one of your main tech holdings. You don`t have many.
LANE: Yes, but it`s an old carryover.
VELSHI: OK.
LANE: We haven`t bought any in a long time. And so, about three days ago, I bought some for somebody that didn`t have much at all in the area of technology, almost zero, and so I had to buy something. And I thought, you know, it`s been $19, $20 for a long time. Chambers is doing a great job. It`s going to break out here at some point, and I think it`s just kind of going to do that in the next six months. But the next two months, it probably won`t change any.
CALLER: OK.
VELSHI: Good to talk to you, Grandpa Curt.
CALLER: OK.
VELSHI: Let`s go to an e-mail from Justin who wants to know about AFLAC.
LANE: I do - I know a lot about AFLAC [Company: AFLAC Inc.; Ticker: AFL; URL: http://www.aflac.com/] . AFLAC is tied into.
VELSHI: I know they`ve got those great ads with the duck.
LANE: . into Japan.
VELSHI: Huge, yes.
LANE: . big time. They`re having some issues there. They`re actually having major issues in the United States getting their sales force to work smoothly.
I like the management. I think they`re terrific. I think, as interest rates rise, you`ll see the stock come down because their bond portfolio is way out there to match their liabilities. So at $37 - are we still there on the stock?
VELSHI: We`re at - yes, $36.96.
LANE: Yes, OK. I would probably sell it, take your money out. There will be something better for the next 12 months. But great company, great management team.
VELSHI: Randy in Arizona is mentioning about the Microsoft [Company: Microsoft Corporation ; Ticker: MSFT ; URL: http://www.microsoft.com/] one- time dividend. Doesn`t one also have had to hold the stock for 90 days to qualify for the lower dividend tax rate? You know, I`m forgetting the accounting rules on this, but you definitely, to prevent it - to take advantage of that, you had to have had it for a certain amount of time before and after. You can`t - it`s just not a good trade.
LANE: But you could buy it, take the dividend and hold it long enough.
VELSHI: And hold it longer, yes.
LANE: . that you could then get the 15 percent.
VELSHI: Right. So - but again, Randy, you bring up a good point, and again, I`m really not in a position to be giving accounting advice, but when the previous e-mailer says, isn`t this too easy a way, yes. It`s a golden rule of investing. If it looks that obvious that you could just get 10 percent, it`s not going to happen.
LANE: Right.
VELSHI: There are rules about this, and if you don`t follow these rules, you could find yourself quite stung by the tax penalties of doing this the wrong way. Also remember, a one-time dividend comes off the capitalization of the stock. It`s not free money. It`s not - a $30 stock that pays a one-time $3 dividend is not a $30 stock the day after it pays its dividend. It`s a $27 stock.
LANE: Right, right.
VELSHI: It may trade up from there, but that is - please keep that one in mind.
LANE: Yes. If you have a big gain, you might be better off selling the stock.
VELSHI: Right.
LANE: . taking the gain there and offsetting it with a capital loss elsewhere. You cannot offset, very easily, the income.
VELSHI: Yes. The only benefit of this is you can plan for it. You know it`s going to happen.
LANE: Right.
VELSHI: So if there is some advantage to you taking this dividend, it might be, but that`s your own taxation. That`s not an investment strategy.
LANE: That`s correct.
VELSHI: All right, let go to - where are we going next? Jeff in Ohio - hi, Jeff.
CALLER: Good afternoon. How are you doing?
VELSHI: Good. How are you guys doing?
CALLER: Good. A quick question for you on Motorola [Company: Motorola Inc.; Ticker: MOT; URL: http://www.mot.com/] , as they`re getting ready to launch the world`s thinnest phone, the razor...
VELSHI: Yes, I saw a picture of that yesterday.
CALLER: . which should bring a lot of attention to them. The price is down right now, and I was curious if you think it would be a good buy, at least for the first couple quarters of `05?
VELSHI: You think, though, that that`s the trick there? You think that buying - that this one fancy thin phone is going to make it for them? I don`t know. I`m asking. I`m not actually passing an opinion on that.
CALLER: I don`t think so.
VELSHI: What`s your thought?
LANE: Well, Nokia [Company: Nokia Corporation ; Ticker: NOK; URL: http://www.nokia.com/] was in town all day yesterday.
VELSHI: Right, (INAUDIBLE)
LANE: . and they are finally getting their act together on new phones.
VELSHI: They`ve got a few new fancy phones, yes.
LANE: And I`ve seen the razor. I`ve been out to the Motorola meeting in July. Zander is doing a good job getting them moving faster on introductions. It`s a good stock. We were on the show saying buy it around $9 or $10. I think, when it gets up to around $18, $20, it`s pretty fully valued. I think it`s $16, $17 now, but I wouldn`t buy it on the Razor.
VELSHI: Yes, they got a free run on this one, by having the right phones when Nokia had the wrong phone.
LANE: Yes, right.
VELSHI: And that was Nokia`s bad judgment several months ago, and they - Nokia, now, seems to be getting back in this game. But it`s complicated to figure out whether it`s - this is like the apparel industry, trying to guess whether that`s the right thing to do.
LANE: It`s a consumer electronics.
VELSHI: Yes, it is. It completely is. All right, let`s take a break. We`ll come back with - we`re going to give you a market update when we come back. We`re going to continue your calls for Doug Lane of Douglas C. Lane & Associates.
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