[verbatim recap]

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Jim went on after this segment to take questions from callers, and responded with his comments...

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Q:    How has your investing strategy changed over the past 20 years, with so many people investing on their own today?

Jim:    Okay, I think that the big change that I have had to adjust to… one is the regulation that the SEC put together which said that you could not have informal discussions with management, you used to be able to… and the second is, because I now run a charitable trust, AAP, I have holding periods… so that forces me to think more than just a day, more than a 2 day… and if I mention a stock on this show, my charitable trust is frozen… so what I am trying to do is figure out, I now use a 6 to 18 month timeframe… I don’t try to figure out where stocks are going to be in the next hour, like I did in my hedge fund… or the next day, or the next week, but where they are going to be next year… and that has enabled me to outperform this current market… why, because if you have a view of where things are going to be a year from now… you will informed and be able to take advantage of the markets declines, to put money to work where you want it.

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Q:    I make a living as an investor and a trader, so I have the TV on all day. And what happens is that I watch all the pros, the top managers, top investors, the chartists... And half the people give all the reasons why the market is going to go up, and then the other half give all the reasons why the market is going to go down. And both sides give very compelling arguments, and it leads to the individual like myself, sitting on my cheap linoleum floor going, what do I do?

Jim:    This is a difficult issue… and I will tell you why… because when I was at my hedge fund, I used to pit two managers against each other who worked for me… and then I would make the decision… it is difficult that most home gamers can have the ability to discern between two arguments… but you know what, I think that the battle of ideas produces the best buys… when you hear someone who has an argument for it, and then an argument against it, it tests your conviction… when I was at Goldman Sachs and I was teaching… I used to have one guy give a negative story, and then one guy give the positive story, and then vote on it… and I always found that everyone was more informed and was able to have a better election, just like in politics, by hearing both sides of the story… why is it important… because when the stock goes down, you remember why you liked it… you have heard the bear case already, and you are not shaken out low… it is to stop buy high, go out low… I think that the networks philosophy is a good one.

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Q:    As I have invested for my retirement account, I have tried to buy stocks at lows. In your career, how do you think bottom feeders end up compared to those who trade during huge bull markets?

Jim:    I think bottom feeders have done quite poorly, frankly… I think that people are always too intrigued by stocks that look like they are cheap because they have come down.. I think the best stocks to buy are best of breed stocks… they tend never to get to those levels… I think that the bottom feeders of the last generation are going to be the last bottom feeders for a long time… these are the people who bought the MBIA’s, they bought the insurers, they bought the savings & loans… and they will maybe never recover… had they stock with best of breed and not getting involved with companies with bad balance sheets… even though the stocks were high… they would live to play another day.

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Q:    In your career you have saw many bull and bear markets, and you have mentioned from time to time overbought and oversold indicators. But what are the transition signals that we can look for from a bear to a bull market?

Jim:    I think the main one is the spares measured by the number of bulls in the market vs. bears, that is a number that comes out Wednesday… I like the oscillator, I mentioned that, I use the S&P’s 500 oscillator… I pay to get that… but one of the things I find that is most important is that when the bears seem to be overwhelming on TV… I am using that as a new trend… when I hear the bears, no one says that they want to buy… I was talking to a friend, he puts out a newsletter… and he came on a rival network yesterday, and he was asked do you like the market… and he said yes, and the guy was shocked… he said that he was the first guy to come on and say that I like the market right here… and I was conscious as I listened to everybody, and they said maybe lower I like it, no not here, or you missed the chance… there were so few, few bulls during the bottom in March… that is what you needed to look for… it is the number of bears that you hear on TV… when they predominate, start buying.

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[verbatim recap]

[end of segment]