"We have a world of trouble," Aaron Task told
"RealMoney" radio show listeners Friday, referring to slew of bad headlines with which the market has had to contend. Task was filling in for Jim Cramer.
"From a purely economic standpoint," Task said, news that the Dubai Port deal has been postponed was difficult for the Wall Street to digest, and perhaps more significantly, Saudi Arabia blocked an attempted terrorist attack on a refinery, he said.
In reaction, oil prices jumped to over $63 on an intraday high, and gold and related stocks rose, too.
News from Nigeria that a rebel group knocked out one-fifth of the nation's oil production also lifted crude prices, particularly given the fact that the group said it will resume attacks without further warning and that it aims to knock out 30% of production this month, he added.
Moreover, the situation in Iraq looks very unstable in the wake of the destruction of the Golden Mosque, Task said.
Last but not least, Venezuela's president, Hugo Chavez, said he would reduce the number of flights between the U.S. and Venezuela, he said. The country is the largest supplier of oil and gas to the U.S., Task noted.
But, in what he called a contrarian statement, Task offered that the stock market is holding up well not in spite of, but because of, this news. As evidence, he pointed out that more money is flowing into the stock market, but much of it is into international mutual funds.
Task said there is going to be a move away from these international markets that have done so fantastically, and that the cash will eventually go back into the large-cap defensive names that make up the
Dow Jones Industrial Average
He welcomed Noah Blackstein, with Dynamic American Mutual Funds, to the show to discuss the debate between large- and small-cap stocks. Small-caps have outperformed for the last five years, but Blackstein, who manages a large-cap fund, said that there's value in large-caps, although he's not sure if there's growth -- he looks for growth in excess of 15% on the top line and 20% on the bottom line.
There are some pretty huge companies not in the
that have posted tremendous growth, he said, citing
as an example.
He said that the stock fell, but not necessarily because there are problems in the long-term picture. Seasonally, it's not a great time for Internet stocks, Blackstein said, and short-term expectations "got so hyped up" that it was hard for them to please Wall Street.
Blackstein added that quarterly earnings are important to look at in terms of seeing that a company is on track, but that the quarterly game is not something investors should focus on because it's easy to get caught up in the noise.
," he said, saying that the company regularly "beat" earnings expectations. Investors got burned there, he said, so he focuses on longer-term prospects.
Task next turned his attention to "the intellectual property story du jour,"
Research in Motion
The judge didn't order the BlackBerry maker to shut down, even though he did say that the company needs to settle, Task said, asking how Blackstein would deal with the company's litigation.
"If it's in the courts, stay out of the stock," Blackstein said. "You never really know how the courts will rule."
Blackstein was also bullish on two retailers,
, despite negative macroeconomic reports on the US consumer.
"Calling the death of the consumer is ridiculous," Blackstein said, citing wage growth as one factor that will keep Americans shopping.
He believes that there is still money to be made in retail concepts like Chicos and Zumiez because they have solid concepts and a fairly young store base.
"There's an opportunity to grow the square footage," Blackstein said, adding that when you're trying to pick retailers, you're looking for stores that look like
in 1996 or
Finally, children's singer Lori Berkner joined Task to talk about her new distribution deal with Starbucks, which brought her to the top of the
charts, evidence that the coffee shop could leave a big mark on the music industry.
"They deal with the sale of the music very differently from retail stores," Berkner said. For example, the Starbucks deal has boosted her sales as a children's singer because it allows parents to access her music without having to make a special trip to pick up the album.
She also said that online music and
iTunes have helped her have her own music label and sell records. For example, she said that when she was on the "Today" show in 2001, her music wasn't distributed in stores.
Without online music sales, "no one would have been able to get my CDs," she said. But they were in the top 10 on
even though there appeared nowhere else.
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.