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From the June 2005 issue of Investment Advisor • Subscribe!
Behind the Numbers, with Gary Thayer
"We're cautious about the [stock] market," says the chief economist for A.G. Edwards & Sons. "We believe the market is undervalued, but we recognize that sentiment is not good. The market tends to overlook the good news and respond more negatively to bad news, and that's reflected in P/E ratios going down." In response Thayer is overweighting in defensive sectors including healthcare, consumer staples, utilities, and energy. "We're watching to see how the market responds to the current decline in energy prices; if we get some good news and the market still doesn't respond, there would be more of a concern about the market at that point."--Robert F. Keane