'RealMoney' Radio Recap: No Ebb, Just Flow

Filling in for Jim Cramer Monday, Aaron Task, co-executive editor of TheStreet.com, told listeners of "RealMoney" radio show that he believes the year-end rally is still on.

There is a tremendous amount of money flowing around the world that is lifting asset prices, Task said.

At the same time, share buybacks and dividends are at record levels, and merger and acquisition activity is strong. Both have the effect of shrinking the available supply of stock.

S&P 500 companies will spend some $500 billion this year on share buybacks and dividends, he said. That's up 30% from last year's record levels.

M&A activity totaled $600 billion in the third quarter. Recent deals such as Boston Scientific's (BSX Quote) bid for Guidant (GDT Quote), Sears Holdings (SHLD Quote) offer to buy Sears Canada (SEARF Quote) and Liberty Media's (L Quote) acquisition of Provide Commerce(PRVD Quote) are signs that strong M&A activity is continuing.

Secondary offerings and IPOs also are coming at a healthy pace, said Task, which is bullish for brokers such as Goldman Sachs (GS Quote) and Morgan Stanley (MWD Quote).

Another theme Task is seeing is the movement of smart money into big-cap and growth stocks and away from small-cap and value stocks, he said. Small-cap stocks and value stocks have outperformed over the last six years, thus change is due.

Two closed-end funds Task mentioned as a way to play the trend change are Adams Express (ADX Quote) and Tri-Continental (TY Quote). Both funds are selling at about 15% of their net asset values, he said, which is equivalent to buying the S&P 500 below 1100. The S&P 500 traded at about 1260 on Monday.

Task also mentioned Cognos(COGN Quote), whose shares rallied despite an earnings warning Friday. The stock is attractive on a P/E and P/E to growth basis vs. competitors, he said.

More importantly, though, is the fact that Cognos rallied despite disappointing news. That's a bullish sign, he said.