TheStreet.com Staff
The smart money is thinking big, said Aaron Task, co-executive editor of TheStreet.com, who filled in on Jim Cramer's "RealMoney" radio show Wednesday.
In the last five years, small-cap stocks have outperformed large-caps, and value stocks have outperformed growth stocks, said Task. But he is noticing that more and more Wall Street gurus are beginning to believe that large-cap stocks and growth stocks will be the places to be in 2006. Names that have popped up on more than one guru's recent recommended lists include Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks) Amgen (AMGN Quote - Cramer on AMGN - Stock Picks), Intel (INTC Quote - Cramer on INTC - Stock Picks), Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks), Morgan Stanley (MWD Quote - Cramer on MWD - Stock Picks), Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks), Johnson & Johnson (JNJ Quote - Cramer on JNJ - Stock Picks), Home Depot (HD Quote - Cramer on HD - Stock Picks) and IBM (IBM Quote - Cramer on IBM - Stock Picks). Task believes that IBM is the "best way to play this return of growth stocks and large-cap stocks that a lot of the smart money sees happening in the coming year." Cody Willard, a fund manager, RealMoney.com contributor and Telecom Connection author, joined Task to talk about his outlook and to take callers' questions. Willard talked about a "capital glut" in the U.S., which has kept the economy from collapsing.
Additionally, technology companies are experiencing an "incredible profitability boom," he said. Those factors have contributed to an increase in merger and acquisition activity, which has reduced the supply of stock in the market.
Additionally, Wall Street is starved for good growth stories, which is one reason stocks such as Apple Computer (AAPL Quote - Cramer on AAPL - Stock Picks) and Google (GOOG Quote - Cramer on GOOG - Stock Picks) have run so much, he said.
Willard, who has owned Apple since the stock was in the high-single digits, is paring his holdings even though he plans to continue holding the stock well into the next several years, he said. Willard's thesis about Apple is playing out, he said, but with the stock up so much, "I don't want to be a pig."
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