On a cheerless Friday, with the stock markets being rocked by a broad selloff, it seems the only good news will be the sound of the closing bell.

But someone out there is cheering.

Even while Nortel Networks shareholders continue to jump ship from the one-time Titanic of Canadian stocks, pushing the share price to new lows under $2 on the TSX minutes before the bell, the man on the phone from Montreal is still rooting for the fallen fibre-optics giant.

“If we can close over $2,” gushes Benoit Chotard, an analyst with National Bank Financial, “that would be quite positive and this may indeed be the bottom.”

Judging by Chotard’s horrific track record in touting Nortel (NT-TSX), don’t bet on it. He’s been cheering for Nortel for a very long time.

And his research reports tell you he hasn’t stopped pumping since the stock peaked at $124 two years ago.

Indeed, while even some of the most tireless cheerleaders on Wall Street and Bay Street have sheepishly removed their buy ratings from Nortel, Chotard proudly pronounces that he is maintaining his buy rating with a 12-month target of $4 (he is quick to disclose that National Bank has been a recent underwriter of a Nortel financing).

Chotard says he has covered the stock for National Bank Financial for five years and has always favoured a buy
recommendation.

In late September of 2000, at a time when the cracks in Nortel’s armour began to show while the stock was
trading at $96, Chotard rated Nortel a ‘focus buy,’ National Bank’s top rating, with a 12-month target of $180.

Chotard offers no empathy to shareholders who may have bought the stock based on his outlandish target price.
Investors, says Chotard, must “make their own choices.”

“I followed my own advice,” says Chotard of his bullishness on Nortel. “I lost money too. But you’ve got to take it like a big boy. If you can’t take it, buy treasury bills. Otherwise, you’d better be ready to lose money. When you play risks, maybe there’s a price to pay.”

How much did Chotard lose?

“None of your business,” quips the eighth-year analyst. “It was a lot of money.”

So how did he arrive at his $180 target for Nortel?

“Who cares now?” snaps Chotard. “It’s a different market now . . . none of us thought Enron (the scandal over the
collapse of the energy trading giant) would happen.”

Pressed further, he admits that he should have looked more closely at the debt load on Nortel’s customers. And he insists he would downgrade Nortel from a buy “if they don’t improve sequentially.”

He says he believes Nortel, which just announced a quarterly loss of $697 million US, can turn a profit next year as the company has forecast.

“You buy the stock now based on what the company can do 12 to 18 months from now or else you don’t buy it,” says Chotard. “There could be a great reward, if they (Nortel) come through. But you have to diversify. Don’t have more than 10 per cent in whatever stock.”

Asked if he has any sell ratings on the 15 stocks he covers, Chotard says: “No, but there are a lot of holds and about half are buys. We haven’t had a focus buy this year yet.”

Does a hold actually mean sell, as some analysts are now suggesting?

“Read between the lines,” he says.

Why no sells?

“It’s hard to put a sell on a stock,” mutters the analyst, now sounding as cheerless as a Nortel shareholder. “Don’t forget. We have to talk to these companies . . . why all these questions?”

* STREET TALK: Even with the Dow Jones 30 index hitting a five-year low in the 8000 range with the July 19 selloff, Richard Yamarone, chief economist at Argus Research in New York, was bracing for another bear mauling.

“Unfortunately, I suspect it’s going to get worse before it gets better,” said Yamarone. “I think the light at the end of the tunnel comes Aug. 14. That is the deadline for the (U.S.) CEOs for signing away and swearing by their financial reports. If the bad news is going to come, it’s probably going to come before that. You’re going to air out the dirty laundry before that.”

* SAGE WORDS: “I think it will end when we all think it will never end.”
– Susan Byrne, CEO of Westwood Management, on the bear market.



HOT ALBERTA STOCK: Sterne Stackhouse
* SSX-TSX Venture 30 Cents
* Up 18 cents (+150%) on 8,000 shares (for week ending July 19).
Finally, some panic in the streets. Everything selling off but gold, cry the pundits on the floor of the exchanges. Just a minute. Look what just popped up on our screen. An old souvenir of the tech bubble that used to have its name on billboards all over town. Yup, Sterne Stackhouse somehow managed to swim against the high tide on the strength of a measly 8,000 shares during a week when the market indices crashed through their lowest levels in years. Small consolation for investors who bought shares in the $3 range two years ago.



COLD ALBERTA STOCK: Dynetek Industries
DNK-TSX $1.50
Down 40 cents (-21.1%) on 87,700 shares (for week ending July 19).
Dynetek recently said it had reached a milestone by testing the world's first 12,500 psi lightweight hydrogen storage cylinder, but shareholders don’t seem to give a hoot. Stock in the Calgary-based manufacturer of fuel storage systems has been on a downward spiral for almost two years from a high of $8.