Michael Carty Quotations

We're in this confessional period where there's nothing but bad news coming into the market place now and investors have become really cynical.

We like auto parts and accessories; we even like Pep Boys. They have a return on equity similar to AutoZone, which has a return on equity somewhere in the neighborhood of 40 percent,

We're seeing some jitters about the Middle East as it relates to our presidential election. But I think the trend should remain up. Earnings are certainly strong, and I think the market should follow that. The only thing we have to fear is more talk about interest rates.

We're seeing a little turnaround, after so much negative news. It's also the end of the quarter, so portfolio managers need to do a little window dressing.

There are some rumors that although the market is open, a lot of people have decided to take long holidays, and so I think you'll see a drop in volume next week.

There are some negatives out there, but manufacturing and factory orders seem to be coming back and there will be a lot of rebuilding down in the Southeast. I think we've basically been too negative.

Yesterday (Monday) was a technical rally. There's still a lot of uncertainty about a potential recession and about what's going to happen on the diplomatic front.

There are a lot of good things happening right now, but the market continues to focus on Iraq, interest rates, the presidential election, and particularly right now, the high-profile earnings misses.

We might find some people selling off the big winners, ... because they might want to take some capital gains against the capital losses they've taken in recent years.

Sentiment, generally, is the big problem now. Even as market fundamentals are starting to improve, people are reluctant to buy,

Some bears had implied that rates will rise by 50 basis points tomorrow, and some people were a bit worried about that.

If a company is so sure that their stock is a bargain that they're willing to buy it back, that's reassuring.

Today, American Power Conversion Corp., woke us up with a fairly bad report, and I think that's what's been keeping everybody bothered,

I think the markets are basically making time as a result of the Iraq situation. The negatives are being played up, and the positive things not absorbed. With a modest resolution to some of these things we might see a market rally.

I think the market came down over the last few days and is recovering now, and that recovery can probably continue through the end of the week.

I think the energy prices are going to overhang us for a while, maybe a good long while. It's looking like there's going to be a problem with fuel prices again, and the markets are concerned the consumer is going to be tapped out by the end of the year.

I think we're seeing investors being convinced that we hit the bottom and from here we'll go through some softening of the economy. But if we're going to get back into the market, we want to do it now because the market is a leading indicator.

I think a couple quarters down the road, the worst will be over. This is a terribly oversold market and it is undervalued.

I think tomorrow should be a fairly positive open, with the techs a little higher on Microsoft and in response to the action over the last few days. We've had a couple of ugly sessions and you're likely to see a little bounce off of that.

People are looking forward to 2006 and expecting to have more difficulties.

People are selling into some of the gains from the run this year and moving into the more defensive names. I think you could see more sideways movement for the next few weeks.

Stagflation is in the back of the minds of many investors right now. When they see energy getting quirky, they want to duck. And when they see the market rally, they want to take some chips off the table.

Markets tend to be very uneasy during the election year. One of the problems is that no one wanted to make a big commitment without knowing who was going to be at the helm.

I was very impressed with the last couple days' performance, in particular with the Dow, which rallied nicely. But we're in this pre-announcement period and although there haven't been too many negative comments, there's some hesitation on the part of investors because of that.

I think people are going to ignore the jobs report for the most part. What else can you do given the circumstances?.

I think most fund managers are saying, 'I have to see it to believe it,'

I think for the shareholders overall it would be great if they could be moved into Alcatel. At least they would come up with a premium price that Alcatel would pay. It would be good for the shareholders, but the question is, will it actually happen?

I think the stock action has been very positive. It's getting to the point where people are more afraid of being out of the market than getting in it.

Most analysts are calling for the market to rise between 5 percent and 10 percent next year, but I think it could be more like 15 percent. The economy is heating up, the employment picture has been improving and companies will begin spending more.

We are basically being held up by geopolitical events,

We know Katrina had a negative impact on earnings, ... They (investors) are looking more forward than backwards on earnings.

The path of least resistance for this market is up right now.

We are not looking for any major increases in interest rates.

The reaction yesterday was just crazy. I think the market is bouncing back from overreaction.

The reaction yesterday was just crazy, ... I think the market is bouncing back from overreaction.

This stalling is likely to continue as we get through this period. But in early to mid April, you could start to see stocks move higher as the earnings reports start coming in and they prove to be positive, as the economic news continues to be strong and as the issues that are going to determine the election become more clear.

What (Fed Chairman Alan Greenspan) says is going to be very important because people like to read between the lines.

We've been somewhat concerned with transportation companies, trucking, mainly because of the fact that we're not in a very strong economic recovery.

Because inflation is modest, and worries about that are starting to diminish, I think the focus will turn to earnings, and the earnings are going to be very strong.

Earnings continue to remain strong, even for the technology companies, so I think, with the Federal Reserve saying we're afraid of a recession more than inflation, you're seeing bargain hunters coming in.

First off, Microsoft does have a good product mix, ... It has a five-year earnings growth rate, which is somewhere around 15 percent because it is a giant after all.

There's not a lot of steam in this market. The volume has really dried up.

There's just no obligation to jump in until we start seeing better (profit) reports and that won't be until July.

These concerns are going to keep us from going too high. The general trend is up, but it won't make investors euphoric, at least until after the election.

These companies wouldn't be making these deals if they didn't have cash and if they didn't see strong economic growth ahead, so the deals are positive for sentiment.

Tech has been so weak for so long that no one wanted to touch it. But people are looking at it again. Although the tech picture looked bleak for the last three years, people are seeing that there are going to be survivors, the leaders in the sectors.

Technology has been under a bit of a cloud and there's still concerns about the telecom industry, ... I think investors are still very wary of it. They want to see more robust capital expenditure.

Right now the general direction is up and that's because of the economy. But there is still a tremendous amount of skepticism about analysts' forecasts and the ability for corporations to repair profits that could challenge us next week.

No one wants to concede right away because of what happened before, but I think it (the market) is going to charge ahead like this is a clear Bush win.

The oil prices are really a bugaboo on the market.

The oil prices are creating a few problems. Prices are impacting the PPI report and also consumer prices and are also hurting our trade balance, what with the weaker dollar, because we have to pay more to import oil. However, there aren't a lot of inflationary pressures here beyond that.

The oil prices are creating a few problems, ... Prices are impacting the PPI report and also consumer prices and are also hurting our trade balance, what with the weaker dollar, because we have to pay more to import oil. However, there aren't a lot of inflationary pressures here beyond that.

The most prudent position for any investor right now, ... would be to be buying on the dips, particularly those attractive technology stocks that are selling at something of a discount.

The most prudent position for any investor right now,

As far as Harley-Davidson goes, it makes a great product. It's got one of the best bikes in the world, ... It's, I think, leading motorcycle sales. It does restaurants. It does clothing. It's diversified and it's a winner.

You've got two things: a horrible retail environment ... and oil prices are up to $32 a barrel. When energy prices rise they pervade all aspects of the economy and costs go up. ... The big thing overhanging the market is what we are going to do with Iraq.

The weakness today doesn't concern me, ... There's a little profit taking after the five up sessions and there's some jitters over the dollar's decline, but I think it's pretty clear that the earnings are going to be quite good.

They said pretty much what people were expecting. Maybe some people were hoping that they might say something new, and are using the fact that they didn't as a reason to sell.

They run about 111 hospitals. It has about a 20 percent rise in earnings this year. Five- year projections are 20 percent annually. It's got operating margin around 20 percent.

Although people are somewhat concerned about where the economy is going, some rational exuberance is finally entering the market. Investors have been so pessimistic for so long that it seemed to be endemic, but people are beginning to believe there's an end in sight to all of this (bad news).

They make all sorts of devices for reconstructing your skeletal framework and they have a number of different businesses. This is a company that's expected to grow somewhere in the neighborhood of 15 percent a year and they're going to be up about 20 percent in earnings this year, ... Its got a price-to-earnings multiple a little bit better than market but it's got a better earnings growth rate, which justifies it.

They go into enterprise technology where they allow companies to access all kinds of systems in a secure mode. The company continually introduces products, ... We just jumped in, even at these levels, just about a week ago. We'll continue to buy this stock for many of our accounts. Our analysts are very high on it. We expect it to outperform the market over the next six-to-12 months.

They're going to be upwards, ... But it's only going to be in select sectors.

There seems to be a lot of economic momentum and earnings momentum fueling this market.

It's a great performer in terms of earnings ability,

It's one of these choppy days, where there are a lot of different factors at play.

It's been a choppy period, where it takes a hit one day and then bounces back the next. We're in a range here, but I think the trend remains upward.

Even with oil, the expectation seems to be that higher prices are something we have to live with for now.

Stocks rose sharply after the Fed cuts in the first quarter of 2001. So Fed action now could help.

The retail earnings are likely going to be strong and that helps the market.

The new orders index was better, profits are going to be up a little, interest rates are at a record low, there have been so many layoffs that that may start to dry up, there will be rising productivity and higher profit margins -- all these things combined could give some support,

It's recorded strong earnings over and over for the last couple of years. We've held it for the last couple years and made out very well. And it's trading at pretty much its high,

I like AutoZone because it's got a rate of return on equity, somewhere in the neighborhood of 40 percent, ... It's got a great franchise. As the auto stocks get older and retail sales for autos are off a little bit, it means that the stock will get older and you have to repair your cars. And they're getting into the diagnostic lines, which helped.

I love it. This is a market you've got to buy. You have a record amount of cash sitting on the sidelines wanting to go to work. A lot of the uncertainty facing the market even just six weeks ago has been resolved, such as worries about the cost of rebuilding Iraq and higher energy prices and corporate profits.

In general, the news continues to be mostly good, but people are now waiting to see what the next rotation will be in stocks, or what the next catalyst will be to move the market higher.

In most election years, stocks are up. But when you think about the kinds of policies that are going to be implemented, the market gets a little worried. So, I would say up until the election you will see some very interesting dynamics. If they feel that a demonstration is favorable, drug stocks will get in then and all of a sudden the drug stocks will start looking hot. If the economy seems to be moving along nicely the high-tech new economy-type stocks will continue to do well,

I kind of like consumer non-durables, (they are) all expected to earn 20 to 25 percent or better this fiscal year, ... They have good returns on equity, 15 percent plus. And I think they're priced appropriately within their price-to-earnings multiples.

Investors have a long memory -- in those cases where we've had major oil shocks, overall demand has dried up, ... People are looking towards and fearing a slow-growth, inflationary environment -- stagflation.

Investors are taking a 'wait and see' attitude. They want to see if the market has really bottomed after hitting the lows of the year earlier this week, and if the next leg of this is a rally. I tend to think it is.

Investor psychology is switching from fear to a little bit of greed. What you see is psychology working here today.

Investors still have a lot of rebuilding of confidence before they jump back in with both feet. They're (investors) not in a rush to get in -- they've already tried all the buying on dips they intended to do and they want to make sure this is the last dip.

I don't think that anyone is immune to interest rates. Although the Justice Department said it wanted to divide (Microsoft) into two parts, the judge seemed to be disinclined to do that. However, if the Justice Department does decide to do that, we're going to have a difficult time in the near-term.

Certainly we like certain specialty retailers. We like the regional banks. These are companies and industries that have earned money through the recession, are continuing to earn money and seem like reasonably safe bets,

I don't think the evidence supports the view that we will get there. But it's a situation that bears watching.

I do like computer software, and electronics. And therefore, you know my top picks right now would be large-cap companies in a high-growth area with good, solid, clean balance sheet, good return on equity and good earning projections.

This has been the strongest quarter in three or four years, and so you'd expect investors to want to take some profits as the quarter is winding down.

The economy remains in a growth pattern, and normally the market would be responding favorably. But people are worried about inflation, the rise in energy prices and the weak dollar.

The earnings reports and outlooks have been fairly positive, but I think trade has been kind of muddled recently, with the market wanting to give itself room to breathe after the big run it's had.

The challenge for stocks next week is going to be getting through more Iraq news.

The markets seem to be rising as a consequence of the fact that the Federal Reserve had decreased the interest rate by half a percentage point and the fact that people began to believe the Fed was going to do whatever it can do to continue to see the economy turn around.

The market is trying to build a base in what is the third-longest bear market in history. It's not going to end in one day when you're not paying attention. This is a process that you have to go through.

The market is moving forward and then back again. We're seeing the glass half-full one day and half-empty the next. This shows that investors are still very tentative and that's also reflected in the light trading volume. The bear is still very young and its having a difficult time standing up.