"Stocks in the aggregate are pretty optimistically priced
but I think the
is so close to all-time high it would be surprising if it didn't follow the
to all-time highs," Jeffrey Saut, chief investment strategist of Raymond James tells Aaron Task on Tuesday's
The Real Story podcast.
Commodity related stocks are "also a bit pricey," but Saut is sticking with the "stuff stocks theme," because of the entrance of billions of people in the emerging markets into the modern global economy. "Those new entrants will consume more stuff, and not just oil but timber and base metals, water, fertilizer and gains."
To invest in agriculture, Saut recommends the
PowerShares DB Agriculture ETF
, although Task notes it was hit today by disappointing results from ethanol producer
For water, he likes the
PowerShares Water Resources ETF
, although he notes it has a heavy weighting in
Task's other guest Tuesday, Charles Biderman, CEO of Trim Tabs Investment Research, discussed the recent "shrinkage" in the supply of stock. Biderman explains why it's a bullish development, especially given the relative lack of interest among retail investors in U.S. equities, judging by mutual fund flow data.
Seconding the point, Task notes sell-side analysts are also skeptical and there was a spike in the put/call ratio Tuesday at the first sign of market weakness.
On the "shrinkage" topic, much of Tuesday's stock-specific stories were merger related, Task notes, citing:
Arcelor-Mittal reportedly considering a bid for AK Steel ;
Jana Partners calling for Alcoa to drop its "misguided" $27 billion bid for Alcan and consider putting itself up for sale;
Florida East Coast Industries ( FLA) agreeing to a private equity bid from Fortress Investment Group for $62.50 per share, or about $2.2 billion in cash, and;
Countrywide Financial ( CFC) and 3Com ( COMS) rallying, in part, on speculation they too may be takeover targets.
In the remainder of the podcast, Task previewed Wednesday's
meetings and reported on the day's other corporate news, including earnings after the bell from
( ERTS); as well as strength in "discretionary" retailers
; and the disappointing guidance from
( DJO), which found themselves in "The Geoff Tate zone."
here to listen to the entire podcast.