Aaron Task welcomed precious metals expert James Turk to Jim Cramer's
"RealMoney" radio show Wednesday to discuss the bull market in gold. Task, co-executive editor of
, was filling in for Cramer.
"All currencies, when they are not backed by gold, die basically the same way," Turk recently wrote in a report, adding that we are in the first stage of a bull market in the metal.
Turk, who published the book
The Coming Collapse of the Dollar
, also believes that gold will not drop below $500 anytime soon.
Task asked if gold, which has had a huge rally over the last five years to a 25-year high, is due for a short-term correction.
Turk said that in the short term, meaning in the next few weeks to months, gold would track higher but then likely correct.
"When we took out $500, it was an international buy signal," said Turk. "People jumped in for first time after many years."
Not all of those buyers understand why they need to add gold to their portfolios, but they're buying it now anyway, he said -- a trend Turk believes is bullish in the short term.
But Turk said that gold will go up for the long term, because people should buy it for several reasons. From a strategic point of view, it's a good diversifier, he said.
Turk also believes that it's undervalued relative to other assets.
The most important factor in an ongoing gold rally, Turk said, is the fact that the dollar is going down. To illustrate his point, he said that an ounce of gold buys the same amount of crude as it did 50 years ago, but that the dollar does not.
And even though the dollar rallied against the euro along with gold, Turk said that this was a technical move made as the euro stopped looking like a safe haven.
"It was a wake-up call when the Dutch and the French rejected the European constitution," said Turk.
But, he added that gold will still rally against all major currencies.
The dollar rally may continue for a little longer, but it has basically been in a sideways trading range, according to Turk.
As problems with the dollar persist, including the deficit, trade imbalances and uncertainty about the economy, people may think they should start getting out of the dollar, he said.
Turk was reluctant to say how much gold people should own but he did say that the exchange-traded fund
streetTRACKS Gold Shares
is not a substitute for buying the metal.
Tech and Telecom
Task's next guest was Cody Willard, who follows tech and telecom for
, to talk about
"In the grand scheme of things ... Google is the single fastest-growing company in the history of capitalism," Willard said.
Willard, who owns the stock, said he plans to own it for a long time. He also said that the stock deserves to be down today. Momentum traders make up a lot of Google owners, and many of them are getting out, he said.
But people who bought Google for its fundamentals are keeping a floor under the stock, he said. Willard added that many investors who needed to get into the stock, including fund managers, are going to use this day to buy it.
Willard was also generally bullish on the tech sector. He said that for the tech stocks that have reported, so long as they were not in a collapsed industry, it has been a year of record sales and record earnings.
He was still bullish on
( TLAB), saying that the company had monstrously good results and guidance. Willard also bought more of the stock because he thinks that analysts haven't caught on to the story and that their estimates are too low.
He added that
is a possible play on Tellabs, since Dycom builds networks and installs equipment for the company. Willard holds shares of Tellabs and Dycom.
A caller wanted to know what Task and Willard thought of
( CMGI). Task said he thinks it will continue to fall. Willard said the company has no core business, and that he has "no patience for it."
Willard, who owns
( MOT), told another caller that he believes that the company will continue to expand its operating margins and that estimates for the stock could be too low. (Cramer also owns Motorola for his
ActionAlerts PLUS charitable trust.)
But Willard said that he wouldn't buy
, which he does not believe is the Indian equivalent of Google, because the stock has run so high.
However, Willard added that he wouldn't short the company because it's a stock that is being taken higher by momentum.
Willard also said that he is keeping a pretty good position in
, which he thinks could move higher.
A caller said that he sold building materials company
, but then saw that it continued to run higher.
Task said that it may be going up because there were signs that the housing market has not completely run out of steam. He added that this is an example of why Jim Cramer recommends taking just a part of one's position off the table, rather than selling everything at once.
Another caller wanted to know if retailer
, which Cramer also owns for ActionAlerts PLUS, would be hurt by high oil prices.
Task said he believes that the company would be okay on that front because GameStop customers would not be as negatively impacted by higher fuel prices as would other shoppers.
Aaron L. Task is the co-executive editor of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships.
to send him an email.