Is the market rally here to stay? Jamie Cox, managing partner at Harris Financial Group, and David Spika, WHG Funds vice president and investment strategist, debated whether now is the time to jump into stocks.
A bullish Jamie Cox said investors need to take advantage of the opportunity to buy strong companies at a cheap price.
"I can think of no time in recent past where the opportunity to find companies that are operating in an environment of reduced competition" has been so big, Cox said.
One example: homebuilding gurus Home Depot and Lowe's , which are the only major companies still standing in the sector, Cox said.
"They've been rearranging their cost structure, they've reworked their labor force — I think these companies represent tremendous value going forward," he said. "I think there are countless examples of this in every single industry."
Cox's optimism also stems from what he believes to be the success of the stimulus package, which will show results soon, he said.
The Bear's View
David Spika agreed it's a good time to buy cheap stocks, but he remains bearish on the risk that lies in choosing the right ones, he said.
The market rally has so far been led by low-quality companies, financials and consumer discretionaries — but looking forward, investors should turn toward companies with good earnings growth potential, leveraged foreign economic growth and those with a clean balance sheet, he said.
The problem is, it's too soon to know which companies those are, Spika said.
"We need to get more clarity on 2010 earnings before we can really dive into this rally," Spika said.
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Disclosure information was not available for Spika, Cox or their companies.