Aaron Task warned
"RealMoney" radio show listeners not to get too bullish on the hurricane-recovery scenario that's being widely discussed this week.
Task, co-executive editor of
and Wednesday's stand-in host for Jim Cramer, said natural disasters can actually be good for economic growth because of the reconstruction money that pours in afterward. But he warned that any gains from Katrina rebuilding could be muted by the massive scale of the destruction.
Task discussed the rebuilding scenario with Pritchard Capital Partners director of research and
contributor Chris Edmonds. Edmonds wasn't optimistic
"Things continue to get worse, not better," Edmonds said. Since much energy infrastructure is under water, it will take time to inspect. We won't know the full extent of the damage until well into next week, Edmonds said.
In response to a listener's question, Edmonds said a refining squeeze and supply issues are both hampering energy production right now. Refining is an issue, because capacity has been taken offline. Supply is an issue, because 90% of the oil coming from Gulf oil wells through pipelines are offline right now, Edmonds said, adding that many tankers have been unable to reach port.
In response to a question about whether investors should chase oil stocks here after so many have had or are having big moves, Edmonds said companies such as
will have a "ton of work."
will be supplying parts for damaged rigs, Edmonds added.
Companies that will be hurt, said Edmonds, are the exploration-and-production companies that have lost rigs or production. He pointed to
Diamond Offshore Drilling
A caller wanted to know what will happen if the housing bubble bursts. Task said real estate prices have fallen as much as 10% to 30% from past tops. Those declines have mostly hurt speculators and those who are too leveraged and are forced to sell. Edmonds added that real estate should be played as a long-term investment. Speculation in real estate is for the very risky and for the "greater fool," he said.
A caller asked about
, which Cramer mentioned positively on his radio and TV shows earlier this week and which is up about 15% on the week. Task said it is risky to buy any stock simply because Cramer or anyone else recommended it. "Will you hear when he says to sell it?" asked Task. Without doing due diligence, you're just buying hoping someone else will buy it after you, Task said.
Edmonds said Capstone was a decent "speculative" play on high oil prices. But what's right for Cramer may not be right for you. A stock like Capstone should only be in the portion of your portfolio you can afford to lose all your money in, he said.
A caller asked which stock Task preferred between
( MOT) and
. Task said prefers Microsoft with the pending launch of its Xbox 360 gaming system and its new Vista PC operating system. Task said he believes "much of the rally is behind" Motorola.
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. He invites you to send your feedback to