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A number of commodity and agriculture stocks, along with new companies developing biofuels, are on Jason Burack’s radar right now. He’s encouraged by technical developments among biofuels makers, and by demand projections for the fertilizer companies.

Kate Stalter: Today, I am speaking with Jason Burack. He is one of the founders of Wall Street for Main Street. Jason, I know that you tend to take a macro approach, and from there, you take a closer look then at some of the commodities. So, given all that, I wanted to ask for your perspective on the market right now.

Jason Burack: In general, the market is not really valuing anything more than six months out from now, so some of these companies just continue to get more undervalued pretty much every day.

I think the market is extremely, extremely worried about the sovereign debt crisis—the possibility of European bank contagion here—and spreading to the US and elsewhere. Because of that, people are just in demand for the most liquid of instruments, just for the short term.

People are not really thinking about even two or three years out from now, which is just funny, because for some of the companies I follow, the fundamentals have actually improved in the last six to eight months. More good news has come out.

More positive things have come out with some of these resource companies, and they have expanded the resources greatly, and the stock price has gone down.

Kate Stalter: Give me some examples of that.

Jason Burack: Well, Silvercorp (SVM) for one. I really like the gold and the silver companies right now. It really depends on people’s risk tolerance, though: What percentage they should have in their portfolio of gold companies or silver companies?

If they are more aggressive, and they’re younger, like me, and they can afford more risk, they should have more allocated to silver, I think, than to gold. But the volatility in silver has been even greater than in gold.

• Also read: The Golden Rule Includes Silver

So, a company like Silvercorp—they have all this stuff about the short squeeze, and people thought they were one of these fraudulent Chinese stocks. They pay a dividend.

The management has a stock buyback; the CEO and Chairman of the company went and bought 100,000 shares on the open market in the not-too-distant past. And a lot of the stuff has come out about the company. They publish their bank statements online, and their grades and stuff like that.

So, Silvercorp is a really good bargain here. They are already producing a good amount of silver, so there’s no bankruptcy risk or anything like that.

In terms of some of the other companies, I really like AuRico Gold (AUQ). They are what we call a gold-silver hybrid company, so they produce basically just gold and silver…you don’t have any base-metal exposure. I think something that people need to be careful about is the base metals.

Some of the commodities we really don’t like right now, especially in the near term. The base metals got way ahead of themselves. So, people who are buying these gold and silver companies need to be careful about some of the base-metal exposure, because the base metals—like copper, iron ore, lead, zinc—a lot of the prices on the base metals have just fallen off a cliff, even more on a percentage basis, than the gold and silver have.

Kate Stalter: Now, talk a little bit about the rare earths. That’s something else you follow, isn’t it?

Jason Burack: Yes. I cover the rare earths extensively. I really like the rare-earths story, because the industrial demand can grow pretty easily, in my opinion—at least 9%, but pretty easily double digits for a long time.

There is a lot of innovation upside in the rare earths. They are coming out with some amazing possibilities there in the lab to continue to grow the pie as a whole.

I am just seeing some of the innovations that are coming down the pipeline. Some of your investors are already familiar with some of the innovations in rare earths, like the new windmill technology and flat-screen TVs and the possibility of solar panels down the line.

We already have the iPads and the smartphones, and really those technologies wouldn’t exist without rare earths. The only thing that makes those technologies smaller, thinner, and lighter is the rare-earth element.

China has a monopoly on this. This is not a free market, so some of these other companies coming in there, there’s a lot of profits to be made if the company understands what it’s doing and not just on the mining side. I am talking about innovating with it and processing the rare earths and making value-added products.