'Fast Money' Recap: Gold Too Risky

Stephen Weiss says the gold has reached a point where the risk-reward is intolerable.

Author:: David Tong
Publish date:: Nov 8, 2010 7:58 PM EST

NEW YORK (

TheStreet

) -- The markets were mixed today as gold and the dollar moved higher.

The

Dow Jones Industrial Average

lost 37.24, or 0.33%, to 11, 406.84 and the

S&P 500

fell 3.13. or 0.26%, to 1,222.72. The

Nasdaq

added 1.07, or 0.04%, to 2,580.05.

Melissa Lee, the moderator of

CNBC

's "Fast Money" TV, asked the panel to comment on the move higher by both the dollar and gold.

Pete Najarian said he was impressed with the move higher by

SPDR Gold Trust

(GLD) - Get Report

and the miners.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."


3 Stocks I Saw on TV
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Brian Kelly said he ran into problems trying to hedge the trade. He added that platinum and palladium also did well today.

Joe Terranova said copper was working, while Guy Adami said silver was performing well, especially his favorite

Silver Wheaton

(SLW)

Kelly said gold has been helped by China's decision to ease restrictions by its residents to own gold.

Rich Ilczysyn, a commodities analyst with Lind-Waldock, said gold is running on its own and could top $1,500 an ounce before there is a bit of a pullback. He also sees silver at $30 by the end of the year.

He recommended taking profits in the gold trade and shifting the money into energy names in the emerging markets. He said energy will provide a better return than gold six months from now.

He told investors to exercise caution on the silver trade, saying it is getting very volatile.

Terranova advised investors to play the oil trade through the energy equity names.

Stephen Weiss said the gold trade has reached a point where the risk-reward is "intolerable." He said gold was up today on the highly improbable chance of a gold standard. He said energy is the better play.

Lee noted that

Priceline

(PCLN)

was moving higher after topping its third-quarter estimates and raising its outlook. Terranova said the stock, which was up 5.69% today, has managed to hold on to the gains in past rallies.

Lee brought in

CNBC

reporter Kate Kelly who was on GM's IPO road show this week. She said the pricing will occur on Nov. 17 but indications are it will be priced at about $30. He said retail investors will be able to pick up the stock through their brokerages.

Lee brought in Sen. Christopher Dodd, D-Conn., to comment on Republican attempts to gut the financial reform bill he helped authored.. He said some efforts to modifiy it may be legitimate, but he said it was a good bill that will provide much needed financial reform.

Dodd said the business community would react negatively to any attempt to gut it because they want some certainty that the bill provides. He said the most important parts of the bill include erasing the notion of bailouts for institutions that are too big to fail, establishing a consumer protection bureau and setting up a systemic risk council.

Lee shifted to three stocks on a tear as their 50-day and 200-day moving averages have crossed. The stocks were

Exxon

(XOM) - Get Report

Johnson & Johnson

(JNJ) - Get Report

, and

Schlumberger

(SLB) - Get Report

. Kelly liked them all and offered up a third:

Procter & Gamble

(PG) - Get Report

Gary Kaminsky talked about the unintended consequences of QE2. He said

Fed

Chairman Ben Bernanke policy is aimed at lower unemployment and achieving a stable rate of inflation.

But Kaminsky said he's already seeing dramatic hikes in eggs, meat and plastic containers at his deli. He said Bernanke's policy might not sit well with the consumers who have to pay the higher prices, and it imposes pressure on companies like

ConAgra Foods

(CAG) - Get Report

to make the higher prices stick.

Weiss, however, said he believes the branded names will have the pricing power to make the higher prices stick because of their brands are so well known.

Commenting on

Walt Disney

(DIS) - Get Report

earnings on Wednesday, Weiss said he expects a good report that will show an increase in advertising revenues and strength in its core businesses like network and media and parks and resorts. "The chart (on Disney) looks like it wants to break out," he said.

Commenting on President Obama's trip to India, Ron Shah, founder of Jina Ventures, said Obama has achieved his major objectives in his trip, including increasing U.S. imports to India and backing India for a seat in the Security Council. He said the president has helped land 20 deals worth $10 billion for U.S. companies.

Shah's best picks in India included

Infosys

(INY)

Tata Motors

(TTM) - Get Report

HDFC Bank

(HDB) - Get Report

ICICI

(IBN) - Get Report

and

Dr. Reddy's Labs

(RDY) - Get Report

He cautioned U.S. investors about the volatility of the Indian markets and to play stocks from the long side, choosing, for example, fixed-income plays like HDFC and Dr. Reddy's.

Lee brought in Tim Boyd, of MKM Partners, to comment on the likelihood of a AOL-

Yahoo!

(YHOO)

pairing. She cited a news report saying that AOL has hired advisors to look into such a pairing.

He said the probability of that happening is low because he believes Yahoo! is much more focused on the threat from

Google

(GOOG) - Get Report

to its display business and getting its search partnership with

Microsoft

(MSFT) - Get Report

going. He also said any transaction would be extremely complicated to carry on.

In the final trades, Terranova liked