Thursday, February 28, 2008

$1000 Gold? Time to Buy Food Stocks?

Some interesting takes on the markets, economy, and where to put your money on last night's Kudlow & Company. Joe Battipaglia, market strategist at Stifel Nicolaus, thinks energy stocks are running on fumes. Over at Forbes, Mike Ozanian is betting on $1000 gold. He thinks food stocks offer investors serious value.

Kudlow: What do you do here? You’re a bear. What’s your strategy?

Ozanian: If I’m the Fed, my strategy is I keep rates constant, like one of your previous guests said. Believe it or not, I’d even possibly increase rates. I’d buy gold. I think gold is going to go up $50 dollars between now and summer.

Kudlow: So you think we’re gonna hit $1000 gold?

Ozanian: Yes I do.

Kudlow: You buy the gold stocks along the way?

Ozanian: I like Newmont mining (NEM). And I’d buy some beaten down food companies that are getting killed from this inflation. We saw [Warren] Buffett buy Kraft (KFT), a big stake of that last week. Another one I like is Del Monte (DLM). It’s been beaten down, and hasn’t done well, but has some great brands.

Kudlow: Joe Battipaglia where are you now? You were heading some money to equities. You still there?

Battipaglia: Yeah, still there and creeping back in. I think the problems are deeper and last a bit longer, which means it’s not a quick bounce back. So I am going to be more defensive in what I buy. And I do think that the commodities cycle is going to come to an end pretty soon. Because supply and demand has been overturned by all kinds of speculative and momentum trading on these commodities, having no bearing on what supply and demand looks like. Energy has been up a number of weeks in terms of availability, yet the price keeps moving higher. I don’t think that’s sustainable quite frankly, Larry. So I want to be more defensive.

Kudlow: So you’d get rid of the energy stocks, or you’d pare back.

Battipaglia: I’d take some profits now.

Click here to watch the CNBC clip.