"Stocks in the aggregate are pretty optimistically priced

but I think the

S&P

is so close to all-time high it would be surprising if it didn't follow the

Dow

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

(PBA) - Get Pembina Pipeline Corporation Report

, although Task notes it was hit today by disappointing results from ethanol producer

VeraSun Energy

( VSE).

For water, he likes the

PowerShares Water Resources ETF

(PHO) - Get Invesco Water Resources ETF Report

, although he notes it has a heavy weighting in

General Electric

(GE) - Get General Electric Company (GE) Report

.

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;

TheStreet Recommends

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

FOMC

meetings and reported on the day's other corporate news, including earnings after the bell from

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

,

Disney

(DIS) - Get Walt Disney Company Report

and

Electronic Arts

( ERTS); as well as strength in "discretionary" retailers

Blue Nile

(NILE)

and

Guitar Center

(GTCR)

; and the disappointing guidance from

Cutera

(CUTR) - Get Cutera, Inc. Report

and

DJO

( DJO), which found themselves in "The Geoff Tate zone."

Click

here to listen to the entire podcast.