Celestica Inc T.CLS

Tom Galvin's Weekly Market Comment

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Sorry I don't have a link for this as it was forwarded via e-mail by my broker. Tom Galvin picks CLS as one of his top five picks for 2001. I think this info may be a few days old but nonetheless here it is. Tom Galvin's Weekly Market Comment - 2000 Scoreboard and 2001 Inv estment Outlook 1. This week's report examines 2000 market performance. The broad market as measured by the S&P 500 fell 10% in 2000. While clearly poor performance, this result outpaced many other global markets. Despite the 10% S&P 500 Index decline, the unweighted average stock was up 12%. It helped to be playing with the junior varsity in 2000 as the S&P Midcap 400 gained +16%. If you were heavily allocated towards utilities, health care or financials then Y2K was probably not as bad as the major market indices suggest. Conversely, the technology-heavy NASDAQ Composite fell a record 39%. Most likely, this is what people will remember about investing in 2000. 2. It will be key to follow last year's red flags of rates, energy and excess inventory building, which we expect will all reverse course in 2001. Investors must focus on the reversal of credit spreads. High yield, high grade and ten year swap spreads have come down by roughly 100 basis points since Greenspan's heads up speech of a few weeks ago. We expect the Fed to cut rates by 75 basis points by June beginning in January. Spreads will continue to tighten as liquidity comes back to the credit and capital markets, which ultimately provide liquidity to the general economy. The economy and technology fundamentals will resuscitate sooner than expected thanks to Moore's Law, which accelerates production and price cuts due to improved information flow as well as faster transitioning to new tech product cycles. We believe that we are already five innings into the nine inning inventory correction game. Stocks started to fall sooner than the data suggested a serious fundamental problem, and we believe that investors should be opportunistic in advance of the next fundamental recovery. 3. With speculative excesses substantially reduced, cash levels high, valuations generally the lowest in the past two or three years, and the Fed on alert to orchestrate a soft landing, the stage is set for 2001 to be a year defined by market peace, tranquility and prosperity. 4. We anticipate 20%-plus market gains in 2001 and would focus on groups most hurt by the credit crunch. Technology, telecom and financials will lead the way as spreads tighten, liquidity premiums fall and P/E multiples expand again. 5. We are maintaining a recommended barbell portfolio of 50% high-beta tech names and 50% low-beta defensive names at least until we get through the upcoming anxiety-prone earnings pre-announcement period. My top five stocks for 2001 are Morgan Stanley Dean Witter, Nokia, Celestica, Applied Micro Circuits and McLeodUSA. Tom Galvin, Chief Investment Officer, Email: [e-mail], Phone: [phone], Fax: [phone] Rich Carter, Portfolio Strategist, Email: [e-mail], Phone: [phone], Fax: [phone] Michelle Bider, Research Associate, Email: [e-mail], Phone: [phone], Fax: [phone]