Investment

» PEIC - Making money the Jim Cramer way.

6/2/2006 8:37:00 AM
From: Glenn Petersen of 14971

Making money the Jim Cramer way.

ALL IN THE GAME

by NANCY FRANKLIN

Issue of 2006-06-05
Posted 2006-05-29

People have very definite opinions of Jim Cramer’s bonkers CNBC show “Mad Money,” just as they do of professional wrestling, which Cramer’s show resembles, though he’s the only contestant on the screen, shouting, gesticulating, pacing, sweating, and preaching the virtues of the stock market to the point where he’s on the verge of falling on the floor and speaking in tongues. It’s entirely possible that he has actually done that; I haven’t seen every show. He did drop down and do seven pushups out of the blue, a couple of weeks ago, and then, a few days later, when a caller from Pennsylvania went on too long about something that Cramer felt was obvious, he lay down on the floor, put his head on a pillow, and closed his eyes. Dan Rather, who interviewed Cramer on “60 Minutes” last fall, called him “the Jerry Lewis of business-show hosts.” He’s also the Jerry Lee Lewis of business-show hosts, but instead of a piano he has a battery of props and a cacophonous symphony of sound effects: when he bangs on the buttons of a console during the show, we hear, among other evocative noises, barking dogs, a gong, a truck backing up, a few bars of “The Stars and Stripes Forever,” a baby crying, a heart monitor beeping to indicate a flatlining patient, and machine-gun fire. Cramer is exhausting to watch—you say exhilarating, I say exhausting, but then I am not one to get energized by the repeated sound effect of a person yelling in terror and then crashing through a window and falling—and a normal person isn’t fit for any other activity afterward, except perhaps a cleansing walk across Antarctica, or the Gobi Desert, or any other remote expanse where he is unlikely to be assaulted by the sound of another person’s voice for at least a week.

There are people who can’t watch Cramer for five minutes—his show is on every weeknight at six, and is rebroadcast at nine and twelve (in case you’re in need of a midnight smack)—and there are those who can’t watch him for five seconds. And then there are his devotees, who call in and say “Boo-yah!” or “Boo-yah! ” or “A Hoosier boo-yah to ya!” and who have made “Mad Money,” which débuted in March of last year, one of the most popular shows on CNBC. The number of nightly viewers is under half a million, but all those viewers are drooling with desire to learn the Cramer way to pick stocks. And networks and advertisers like drooling viewers very much. Cramer—whose fans like to call him Jimmy and Jimbo and, for some reason, Skee-daddy—is fifty-one, and he is a boomer in more ways than one. Some years ago, he blew out an eardrum; perhaps, in addition to wanting to make his followers as rich as he is, Cramer wants to make them half deaf, too.

Making the viewers rich—that’s Cramer’s constant refrain on “Mad Money.” (He also has a daily syndicated radio show, and a column in New York.) He is well qualified for the mission: he made a fortune managing a hedge fund in the nineties, and he co-founded the investment-news Web site TheStreet.com. “Let’s try to make some money!” he screams in the opening title sequence of every show; it must kill this prophet of profit that he can’t responsibly drop that wimpy, tempered “try” and shout out a more emphatic call to arms. Cramer isn’t a halfway kind of guy; he wrote a book four years ago called “Confessions of a Street Addict.” It’s a pretty good yarn, too, full of outsized exploits and outsized self-justifying apologies for his behavior during those exploits. He has two other books, whose titles are similarly self-explanatory: “You Got Screwed! Why Wall Street Tanked and How You Can Prosper,” a thin book meant to capitalize on investors’ outrage at corporate scandals and the burst stock bubble, and “Jim Cramer’s Real Money: Sane Investing in an Insane World,” which came out when “Mad Money” started last year. (Cramer has now entered the pantheon of writers whose names are in the title of their books; the cover of the latest one actually names him twice, once as Jim Cramer and once as James J. Cramer. Callers still mention the book on the air, and whenever they do Cramer holds up a copy and shouts something like “The book! The book!,” then tosses it off to the side in yet another signature gesture. A big bombastic branding-bonanza boo-yah to ya, Jimmy!)

Cramer understood stock tables by the time he was nine, and even someone who is not able to be truly discerning when it comes to TV money mavens can see that he has a gift. He has been called a genius, often by his critics; in fact, Cramer’s critics seem to use the word more freely than his admirers, as if to prove that they are generous in spirit and not merely envious. (He is said to be worth between fifty and a hundred million dollars. His father gave him Business Week when he was nine, but I know that can’t be why he is so rich today, because my father also gave me articles from Business Week when I was that age, and I am, like, so not worth between fifty and a hundred million dollars.) In most of his shows, there is what Cramer calls a “lightning round,” when he gives rapid-fire buy-and-sell advice to callers who ask about particular stocks. It’s a test of the depth and breadth of his knowledge, and he always puts on a topnotch performance.

A site called CramerWatch.org, which is healthily skeptical and funny about Cramer, pits a monkey called Leonard (really just a picture of a monkey that when you click on it says “Buy” half the time and “Sell” half the time) against Cramer; Leonard and Jimbo come out roughly equal when it comes to the subsequent thirty-day prices of the lightning-round picks. (Other sites have checked the performance of stocks that Cramer recommends during the less game-showy segments of “Mad Money,” and he fares much better.) But if there are viewers who get burned by Cramer’s fire, we don’t hear from them on the air, and in any case the show is sprinkled throughout with disclaimers, including a long, scrolling document that is part of the opening credits. Cramer constantly urges people to do their homework—to research and track their investments, and to know why they are buying something in the first place. He says that he wants to educate as well as entertain, but it’s hard to know how many people are being educated in the circus atmosphere that is “Mad Money.” The cameras appear to be operated by Leonard the monkey: they zoom in and out and swoop down and around, and shots rarely last longer than a second. A stock ticker and a news zipper and a jagged orange banner with thumbnail versions of whatever Cramer is ranting about take up a third of the screen, and metal music plays during the lightning round. (At the beginning of the round, Cramer typically throws his desk chair across the room.) Maybe he makes some people feel as though they were really in the game, like the passionate bystanders who call sports-radio shows and talk about scores and prospects as if they themselves had a hand in the outcomes. The students who attend tapings on the college tours that Cramer has taken to doing are often made giddy by his presence, whooping and waving big foam fingers in the air, as if they were trying to get picked out of the crowd by Bob Barker on “The Price Is Right.”

A month or so ago, Cramer devoted an entire show to “vice” stocks, to make a point: investing, he said, has to be unemotional, removed from considerations of ethics. (“I’m determined to rid you of that ethical inner voice,” the orange banner said.) He talked about a tobacco company, a bullet manufacturer, and Smith & Wesson. Finally, about a half hour into the show, he said, “Yes, we are being a tad facetious . . . because I need you to be thinking that you can make the money and then free yourself, do whatever you want with the money. I have made a fortune in firearms stocks, and I’ve given a fortune to gun control.” He added, of the profits to be made, “Somebody somewhere is going to take it. Why shouldn’t it be you?” Whaaa? This wasn’t facetious. He meant it. I find Cramer’s egomania hugely entertaining, yet I feel flattened by the hurricane force of his monomania. In any case, if getting rich is your goal, you’re not going to get there by watching Cramer’s show. Remember, he didn’t get rich by sitting around watching TV.

http://www.newyorker.com/critics/televis...

-- posted by PEIC

» hairie13 - Cramer's Tracked Performance

A June 5, 2006 article in the Seattle PI, quotes a study by Doctoral Students at the Kellogg School of Management at Northwestern University.

"Students tracked the performance of about 250 companies that drew a favorable mention on Cramer's evening progaram between late July and mid-October, 2005.

Overall, shares of the recommended companies outperformed the market by an average of 3.5 percent on the first day after Cramer's tout. The smallest companies outperformed by 6.2 percent on average.

Almost immediately, however, the stocks beat a hasty retreat. Within 12 days, they had surrendered the initial gains and then fell further behind, with the smallest companies underperforming by 6.6 percent overall.

In tandem with this activity, the researchers found a sharp uptick in opportunistic behavior among short sellers, who sell borrowed shares with plans to buy them back at a lower proice later, pocketing the difference.

Starting with the next morning's opening bell, short-selling in a Cramer-reommeded stock spiked to six times the normal volume in the first few minutes of trading and then remained abouve average for three days."

In a earler article, I read a blog site that listed and tracked the perfomance of all of Cramer's picks, was issued a "cease and desist" order by CNBC.

-- posted by hairie13

» Jas_Jain - Mad Money Recap 06/9/06

In response to Mad Money Recap 06/9/06 posted by Kirk:

--

"what other tech stocks has he been recommending over and over?"

JDSU, over and over. I recall him pumping the Scam at $3.50+. I don't know if he told people to get out since then.

His popularity is the best evidence that the Scam Market has lot lower to go. The Sacm Market is anything but despised over the past 5 years, which is the condition for a long-term bottom.

Jas

-- posted by Jas_Jain

» BoltonCT - All the indices point to last Thursday as the market bottom.

Everyone was disappointed when Friday did not close above Thursday's close but one has to recognize that Thursday was an extraordinary day. It began with what looked like a stampede and then completely reversed. That exhausted the bears and volume declined Friday as the dust settled. I looked at the DJI, DJT, DJE, GSPC, IXIC and QQQQ and all have their Relative Strength Indices saying the market bounced and their MACDs saying it was a typical bottom. All remained above their Thursday lows. Volume dried up everywhere. Some of the indices did close higher on Friday.

Dow Jones Theory followers and BB followers were not shaken but any followers of Cramer or the Merd Spiral clones were panicking. I believe the Cramer and the Spiral worshippers are market risk factors. You expect them to come out of the woodwork when the market is at a frothy high. So seeing them now makes people feel nervous. They give people random buy and sell advice that causes people to eventually leave the market. They are precisely the opposite of the 1990s advisors who recommended buy and hold or Bob Brinker who at least is not a complete lunatic. BB is a stabilizing influence but Cramer and the Spiral Clones are like having people in the audience setting off firecrackers at a track event.

Last Thursday the bears did their best and were exhausted. Hopefully people will realize that and discount the Cramer and Spiral worshipers before the Monday opening.

-- posted by BoltonCT

» EPS - Is this opinion worth anything?

From Cramer's lightning round of June 12:

Finisar: "People just took that stock to the woodshed. ... It's almost as if had they had a horrible quarter. They had a good quarter." Cramer says he would do a 'mon back* at $2.25.

OK, I can accept revising stock targets based on earnings reports. But Cramer's opinion has any merit, he or his disciples would short FNSR now, right? Also, what about "his" buy at $4.25? Sell or hold?

It's this kind of stuff that gets me upset with "gurus" who don't put their money where there mouth is.

The thing I respect about Kirk and others in these forums is when they put their trades on the table.

-- posted by EPS

» SteveT - Cramer's 'Mad Money' Recap: Going 'Postale

http://www.thestreet.com/_tscnav/funds/m...

By TheStreet.com Staff
6/16/2006 7:58 PM EDT

To make money, you have to be able to anticipate moves and think months ahead, Jim Cramer told viewers of his "Mad Money" TV show Friday. It may only be June, but he's already thinking back to school.

Cramer believes the No. 1 back-to-school stock this year will be Aeropostale (ARO:NYSE - news - research - Cramer's Take).

Although this stock was once a dog, it is now on the road to recovery. Aeropostale, which is headquartered in New York City, aims to sell clothes to young men and women between the ages of 11 and 18, but it totally "flubbed it" last year, Cramer said.

This year is the first time the company is selling shorts past June, and into July and August. Every year since it was founded in 1987, it has phased out shorts early, but this year the retailer will wait until summer ends. Last year, Aeropostale was selling sweaters and fleeces during the summer.

Plus, the company had the fashion wrong, he said. Aeropostale was not on top of the fact that denim was in last year. Now denim is out and twill is in. Aeropostale has a number of twill items.

In case people need more proof that the company is going to be the best back-to-school stock, Cramer said the two best retail analysts out there, Stacy Pak from Prudential and Dana Cohen from Bank of America are all for Aeropostale and are recommending buying it.

Cramer believes this stock is a buy for five reasons.

This is the first time the company's back-to-school products will coincide with when kids go back to school. Second, this could be Aeropostale's best year selling shorts ever. Third, while it didn't win the battle with denim, it's likely to win with twill. Fourth, the company has figured out what is in style; and finally, the company is currently doing a share buyback, which illustrates management's confidence in the company, Cramer said.

"The company blew it last year and worked extra hard this year," he said.

Three-Part Game Plan

Jim Cramer also offered viewers a three-part game plan for next week: buy stocks that have reported good news, redeploy money if your stocks made too much money the week before and buy stocks ahead of earnings reports.

Even after a two-day rally, the market is oversold, he said. Next week is a time when we will be approaching the end of the quarter, which is when all the hedge funds and mutual funds are required to reveal what they own, Cramer said. Investors want to see the results, they want to see performance.

You can profit off of this, Cramer said, advising his viewers to buy stocks that have recently reported good news.

Bear Stearns (BSC:NYSE - news - research - Cramer's Take) is one such company that has reported a great quarter, said Cramer.

Another one reporting strong results is Best Buy (BBY:NYSE - news - research - Cramer's Take). The stock for Best Buy has just started going up, Cramer said, and he believes it is a great retail play.

Goldman Sachs (GS:NYSE - news - research - Cramer's Take), another company that recently reported good news, is currently buying back shares; and Caterpillar (CAT:NYSE - news - research - Cramer's Take), another strong stock, just raised its dividend after declaring bullish comments at a recent shareholders meeting.

"Usually I say buy weakness, but next week I'm saying buy strength," Cramer said.

Second, if you made too much money in Thursday's rally, that means you are not diversified enough. If everything in your portfolio made too much money, get out and redeploy your resources into other stocks.

"I'm still suggesting going into supermarkets," he said. Or put it into a company like Ralcorp (RAH:NYSE - news - research - Cramer's Take).

Cramer also suggested General Mills (GIS:NYSE - news - research - Cramer's Take) and said he adored Pepsi (PEP:NYSE - news - research - Cramer's Take).

The third play, Cramer said, is buying stocks ahead of earnings. This play is specific to high-risk players.

In this case, he suggested looking into buying Bed, Bath & Beyond (BBBY:Nasdaq - news - research - Cramer's Take) and FedEx (FDX:NYSE - news - research - Cramer's Take), both of which report earnings on Wednesday.

For a video presentation from Cramer on how to approach the market after Thursday's big rally, click here.

Two Ways to Pick From Oil Patch

It's time to make money off of the oil-patch resurgence, said Cramer. He offered two ways to play the field and both picks are based in Canada.

For aggressive players, who feel like risking some capital, he suggested Talisman Energy (TLM:NYSE - news - research - Cramer's Take), which has operations in more than 16 countries.

The Calgary-based company is searching for oil in unexploited regions and is the single most aggressive in its industry, Cramer said.

For more conservative players who are looking for a more reliable source of income, he suggested Trinidad Energy Services Income, a trust that trades on the Toronto Stock Exchange under the symbol TDG.UN.

Although both plays are in Canada, Talisman is into the riskier oils, Cramer said.
Mad Mail

In the Mad Mail segment of the show, when a writer inquired about how one would go about finding a company's margin debt, Cramer suggested using the NYSE to find margin debt information.

Cramer told another viewer that every time Starbucks (SBUX:Nasdaq - news - research - Cramer's Take) goes into a store, it makes gold, so it is a buy. He told another viewer that Energy Partners (EPL:NYSE - news - research - Cramer's Take) has real value and recommended sticking with the stock.

Lightning Round

Cramer was bullish on Harris (HRS:NYSE - news - research - Cramer's Take), Triumph Group (TGI:NYSE - news - research - Cramer's Take), Merrill Lynch (MER:NYSE - news - research - Cramer's Take), Staples (SPLS:Nasdaq - news - research - Cramer's Take), Network Appliance (NTAP:Nasdaq - news - research - Cramer's Take), General Dynamics (GD:NYSE - news - research - Cramer's Take), Quest Diagnostics (DGX:NYSE - news - research - Cramer's Take), Old Republic International (ORI:NYSE - news - research - Cramer's Take), Allegheny Technologies (ATI:NYSE - news - research - Cramer's Take), Nucor (NUE:NYSE - news - research - Cramer's Take), Smith & Wesson (SWB:Amex - news - research - Cramer's Take), Newcastle Investment (NCT:NYSE - news - research - Cramer's Take) and Qulacomm (QCOM:Nasdaq - news - research - Cramer's Take).

Cramer was bearish on Univision Communications (UVN:NYSE - news - research - Cramer's Take), EMC (EMC:NYSE - news - research - Cramer's Take), Syngenta (SYT:NYSE ADS - news - research - Cramer's Take), Mittal Steel (MT:NYSE - news - research - Cramer's Take), Advanced Micro Devices (AMD:NYSE - news - research - Cramer's Take), Juniper (JNPR:Nasdaq - news - research - Cramer's Take) and Sirius Satellite Radio (SIRI:Nasdaq - news - research - Cramer's Take).

-- posted by SteveT

» SteveT - Cramer's 'Mad Money' Recap: This Magic Momentum

http://www.thestreet.com/_tscnav/funds/m...

By TheStreet.com Staff
6/23/2006 7:58 PM EDT

The game plan for next week is getting into stocks that have reached their 52-week high as the market edges closer toward the end of the quarter, Jim Cramer told viewers of his "Mad Money" TV show Friday.
Three companies that Cramer advised getting into are J.C. Penney (JCP:NYSE - news - research - Cramer's Take), First Marblehead (FMD:NYSE - news - research - Cramer's Take) and Garmin (GRMN:Nasdaq - news - research - Cramer's Take).
Right now, these are the stocks that should get marked up at the end of the quarter, he said. They are the winners. After all, every mutual fund and investor wants to get into the top-performing companies as we reach the end of the quarter, Cramer said.
However, Cramer wants market players to take the safe route and buy half their positions before the Fed meets and to buy the other half after its meeting next Thursday.
The first company that Cramer believes is near or at its 52-week high and will be marked up is J.C. Penney, he said. This company is a little off its high, he said, calling it the most consistent retailer in country.
The company, which has high-range and midrange products, reported an 11% increase in May same-store sales.
The second stock on the high list is First Marblehead (FMD:NYSE - news - research - Cramer's Take), a private-education lending business, Cramer said.
First Marblehead has seen huge growth and has an ideal business model, Cramer said. In addition, the stock has more than 10 million shares that are held short, which is more than a 30% short position in this company.

"When you have a short position that high, it's almost inevitable that you'll see a squeeze that pushes the stock higher, especially when the stock has great momentum," Cramer said.
The store recently signed a three-year agreement with General Electric (GE:NYSE - news - research - Cramer's Take) to market private student-loan services.
The third stock Cramer recommended was Garmin (GRMN:Nasdaq - news - research - Cramer's Take). This company manufactures global positioning system (GPS) technology, and it keeps winning, Cramer said, adding that it had the single best quarter of any company he follows.

Also, Palm (PALM:Nasdaq - news - research - Cramer's Take) and Research In Motion (RIMM:Nasdaq - news - research - Cramer's Take) are set to report their numbers on Thursday after the close, Cramer said.
Because this is the same day as the Fed meeting, Cramer wants to make sure the results don't get lost in the shuffle.
He recommended both as trades off the weakness of the market earlier this week and believes that the Fed meeting will precipitate a rise in stocks.
Value and Growth
There are only three kinds of stocks that are worth owning, Cramer said. They are high-growth stocks, consistent-growth stocks and value stocks, he said.
Too many people don't have a method when investing in stocks, but when people buy a stock Cramer believes that they should know precisely what they want out of it: high growth, consistent growth or value.
Cramer advised picking one of the groups or investing a little in each of the three groups. However, only pick the best-of-breed, not the second best, he emphasized.
For people who like high-growth stocks, he recommended Panera (PNRA:Nasdaq - news - research - Cramer's Take).
The company has consistent high growth, and Cramer likes it better than Starbucks (SBUX:Nasdaq - news - research - Cramer's Take).
Even when the country was going through a protein phase that shunned carbohydrates, the company reacted by coming out with great salads, he said.

For consistent growth, Cramer recommended General Mills (GIS:NYSE - news - research - Cramer's Take).
It even received an upgrade from Merrill Lynch because of consistent growth potential. Cramer believes that share buybacks and dividend increases are in the cards for General Mills.
A great value stock is construction-services company Walter Industries (WLT:NYSE - news - research - Cramer's Take), Cramer said.
When people look for a value stock, they should look for big discrepancies between the company's assets and its valuations, and its growth and its valuations, Cramer said.
Walter Industries has both.
In addition, it is the parent company of Mueller (MWA:NYSE - news - research - Cramer's Take), which recently went public, Cramer said.
Walter Industries also has a homebuilder that built 760 homes last quarter, he said, adding that value is when you have a subsidiary that is almost as valuable as the parent company.

The Next Big Acquisition
Oil and gas producer Anadarko Petroleum (APC:NYSE - news - research - Cramer's Take) acquired two smaller competitors Kerr-McGee (KMG:NYSE - news - research - Cramer's Take) and Western Gas for $21 billion, Cramer said.
After, Kerr-McGee started selling at a huge premium, Cramer said, adding that he believes that the next big acquisition in this sector will include Devon Energy (DVN:NYSE - news - research - Cramer's Take).
Devon Energy is the best-run domestic oil and gas play out there and is selling below the value of its assets, he said.
It has 7% growth and is selling at seven times earnings. In addition, the stock is down 14 straight points from its high, and it is a few points away from its low, Cramer said.
Cramer also believes that Devon is one of the hardest-hit stocks because it has a lot of natural gas exposure, and people think short-term when they think about natural gas, he said.
However, all it could take is one bad hurricane or winter to bring the price of natural gas up.
"Every time natural gas takes a hit, think of it as an opportunity," Cramer said. "Because in the long-term, there is not enough of this stuff out there, and it needs to be bought hand over fist."
BP (BP:NYSE - news - research - Cramer's Take) and Royal Dutch (RDS-B:NYSE - news - research - Cramer's Take) are two big players in the oil and gas arena that Cramer believes need to make some acquisitions because of their maturing oil fields, he said.
Devon Energy is super cheap for a bad reason, Cramer said, adding that he wants people to take a look at the stock and buy it.
Cramer welcomed Knight Capital Group (NITE:Nasdaq - news - research - Cramer's Take) CEO and chairman Thomas Joyce onto the show and asked him how May was for his company's business.
May was a continuation of the earlier part of the year, but it changed after Bernanke's speech a couple of weeks ago, Joyce said.
The good thing about the company's hedge fund business is that it gets its results reported about every three weeks, he said, adding that things are going well there, and Knight is outperforming.
As far as the company's global equity market business is concerned, Joyce said that Knight is still a cyclical company of sorts and is volume-sensitive. But he said he feels really good about the company and way things are going.
The biggest change from when Joyce came to the company and now, in addition to changes in the company's financial results, is that the culture has changed, Joyce said.
Now the culture is focused on the company's clients.
Lightning Round
Bullish
Cramer was bullish on Coherent (COHR:Nasdaq - news - research - Cramer's Take), Newell Rubbermaid (NWL:NYSE - news - research - Cramer's Take), Alliant Techsystems (ATK:NYSE - news - research - Cramer's Take), Pantry (PTRY:Nasdaq - news - research - Cramer's Take), Serologicals (SERO:Nasdaq - news - research - Cramer's Take), Baxter (BAX:NYSE - news - research - Cramer's Take), Rio Tinto (RTP:NYSE - news - research - Cramer's Take), BHP Billiton (BHP:NYSE - news - research - Cramer's Take), Foster Wheeler (FWLT:Nasdaq - news - research - Cramer's Take), ABB (ABB:NYSE - news - research - Cramer's Take), Schering-Plough (SGP:NYSE - news - research - Cramer's Take), Volt Information Sciences (VOL:NYSE - news - research - Cramer's Take), Basic Energy Services (BAS:NYSE - news - research - Cramer's Take), Hewlett-Packard (HPQ:NYSE - news - research - Cramer's Take), Best Buy (BBY:NYSE - news - research - Cramer's Take) and Circuit City (CC:NYSE - news - research - Cramer's Take).
Bearish
Cramer was bearish on Sirius Satellite Radio (SIRI:Nasdaq - news - research - Cramer's Take), Pactiv (PTV:NYSE - news - research - Cramer's Take), AT&T (T:NYSE - news - research - Cramer's Take), Sprint (S:NYSE - news - research - Cramer's Take), Verizon (VZ:NYSE - news - research - Cramer's Take), Casey's General Stores (CASY:Nasdaq - news - research - Cramer's Take), Adtran (ADTN:Nasdaq - news - research - Cramer's Take), Shaw Group (SGR:NYSE - news - research - Cramer's Take), Merck (MRK:NYSE - news - research - Cramer's Take), Chicago Bridge & Iron (CBI:NYSE - news - research - Cramer's Take), Teva Pharmaceutical Industries (TEVA:Nasdaq - news - research - Cramer's Take), Dell (DELL:Nasdaq - news - research - Cramer's Take) and RadioShack (RSH:NYSE - news - research - Cramer's Take).

-- posted by SteveT

» SteveT - Cramer's Mad Money Recap: Profit-Mining

Note this is what Cramer was saying back Feb.
By TheStreet.com Staff
6/30/2006 6:57 PM EDT

Editor's note: The following is a recap of "Mad Money" that originally aired on Feb. 21, 2006. It was rebroadcast on Friday, June 30.

Jim Cramer spent his "Mad Money" show telling viewers why they should invest in companies that "pillage the earth" of its natural resources.

Cramer said that while the strength in minerals, base metals, and in commodities in general has come from a strong U.S. economy, that isn't the full story. Industrialization in what he calls the BRIC countries -- Brazil, Russia, India and China -- is also contributing to growth in this sector.

That industrialization is taking form in the growth and consumption of metals. If you want to build buildings, machinery or roads, you need raw materials, like iron and nickel and copper and rock, he said. Prices for raw materials have been increasing, and they could still go higher.

"Not one of the BRIC countries is finished. In fact, they're just getting started," Cramer said.

A caller asked Cramer if, when trying to make "mad money" off of commodities, it was better to invest in a native country -- like China or India -- or in a western country doing business abroad?

Investors should stick with the companies that make their living out of mining and "we don't care about those host countries at all." The reason? "Because the financials of those host countries are suspect," Cramer said.
The Magnificent Six

Cramer then went on to share his six stock picks for making money off of the "bull market in minerals and their forceful extraction from the earth."

For Cramer, buying "best-of-breed" companies is still the way to go because in a bull market they should make you the most money. They have good balance sheets and good management.

Cramer's first pick was BHP Billiton (BHP - news - Cramer's Take), the Melbourne, Australia-based company is the "Mad Max of mineral stocks." Cramer said. BHP is the second-largest producer of copper in the world, the third-largest producer of nickel, fourth in uranium and fifth in aluminum and also mines zinc. BHP is the No.1 seaborne supplier of coking coal and manganese.

A caller later asked if BHP -- as the world's fourth-largest uranium producer -- was really positioned for the future in nuclear energy. Cramer conceded that Cameco (CCJ - news - Cramer's Take) was a better pure uranium play and that he still likes ABB (ABB - news - Cramer's Take) for nuclear power.

His second pick was Freeport-McMoRan (FCX - news - Cramer's Take) It's the lowest-cost copper producer in the world and "Cramer likes companies that can keep their cost down."

Most of their operations are in Indonesia where labor and land are cheap, "and bribing public officials is even less expensive," Cramer said. The New Orleans-based company will be big in gold and copper for years to come, and he recommended them as a buy.

Don't worry about the company getting its copper in Indonesia, even if it is not considered a developed or stable nation, Cramer said. Freeport is one of the biggest tax payers and employers in Indonesia -- the government can even be considered as an extension of the company." It also awards a nice dividend of 2.4% and because the company generates so much cash, they are inclined to pay special dividends.

As for copper in general, Cramer told a caller that he liked Phelps Dodge (PD - news - Cramer's Take), but that Southern Copper (PCU - news - Cramer's Take) was the best copper play.

Rio Tinto (RTP - news - Cramer's Take) was Cramer's third pick, calling it the "metal supermarket to the world." Cramer said its precious metals operations were OK, but this stock merits attention because of the ongoing industrial bull market.

He said all of these companies should benefit from higher prices because the BRIC companies will create more demand.

Cramer said any concerns about these companies' environmental practices or ethics should not bother investors. Individual investors will not stop the companies from strip mining. These companies are big and powerful and they get what they want.

"My point is that you can never let your politics interfere with your investing," Cramer said,

Another caller asked Cramer about consolidation in the industry. He said he could see Phelps Dodge and Alcan (AL - news - Cramer's Take) as consolidators, and that Falconbridge (FAL - news - Cramer's Take) and Southern Copper could be targets in the industry.

Cramer then moved on to the mineral-extraction picks. His first was Manitowoc (MTW - news - Cramer's Take), which makes refrigeration equipment, and has a shipbuilding and maintenance business. But the main business to care about, Cramer said, is their "superior" mobile cranes.

In addition to benefiting from mineral extraction, Manitowoc should also benefit from the highway bill and rebuilding the Gulf Coast, Cramer said.

Cramer's second extraction pick wasn't a "best-of-breed" but was still underappreciated: Terex (TEX - news - Cramer's Take) The company makes heavy trucks and construction equipment and Cramer likes them for their hydraulic excavators and surface trucks for mining. Cramer suggested investors buy the stock on any weakness.

A caller asked if there were any high-tech plays in the minerals sector. Cramer pointed her to Joy Global (JOYG - news - Cramer's Take), which was a little more of a proprietary company.

Last, but certainly not least, was Cramer's selection of Caterpillar (CAT - news - Cramer's Take), his "best of breed" for the mining equipment sector. "They make the best mining trucks in the world," Cramer said.

Furthermore, Caterpillar's construction equipment business should benefit from the highway bill. Also, it broke its union in the 1990s, so it's not saddled with pension and health care costs that are facing other industrials.

Caterpillar, Cramer said, "quite frankly is the best, and "you never need to apologize for buying the best."

-- posted by SteveT

» muckdog - Jim Cramer

If somebody followed all of Jim's recommendations they would own a diversified mutual fund. So many buys and sells. The blogs that follow Jim religiously say he is beating the market by a little this year. (I did not verify.) But who could manually follow all those recommendations? And what about transaction costs? I think it would be cheaper to just buy a mutual fund with a good track record than trying to follow all of his comments.

-- posted by muckdog

» SteveT - Cramer's 'Mad Money' Recap: De-fense! De-fense!

By TheStreet.com Staff
7/7/2006 8:28 PM EDT

Pepsi (PEP - news - Cramer's Take) and Genentech (DNA - news - Cramer's Take) are two defensive stocks that can make you money come Monday, Jim Cramer told viewers of his "Mad Money" TV show Friday.

In addition, two aggressive plays that he believes could also make people money are AAR (AIR - news - Cramer's Take) and Alcan (AL - news - Cramer's Take), which he owns for his charitable trust, Action Alerts PLUS.

Stocks have been getting killed left and right, but not defensive stocks -- they have hung in there, Cramer said.

Not only were Friday's employment numbers bad, but companies like 3M (MMM - news - Cramer's Take) and Advanced Micro Devices (AMD - news - Cramer's Take) announced that their earnings were expected to fall short this quarter. Cramer said this tells him one thing: "We need more defense."

"I have the defensive plays when the market starts to stink and sink," he said. "These can make you money even in a hard-landing scenario."

While going defensive, Cramer reminded his viewers that they still need to remain diversified. Food and drugs are defensive stocks.

Pepsi, which is coming out with earnings before the bell on Monday, just did a great buyback, which acts as a cushion during a decline, he said. The company also cut down on its share count, which increases earnings per share, he added.

Gatorade and Frito Lay, two of Pepsi's divisions, are also expected to report better-than-expected results.

Genentech, another defensive play Cramer likes, is leading the biotech rally, Cramer said, adding that the Food and Drug Administration recently approved Genentech's Lucentis drug.

For an aggressive play, Cramer said he likes Alcan. Although Cramer earlier in the week had blessed a buy on Alcoa (AA - news - Cramer's Take), he now believes it can wait, and prefers Alcan right now, since he believes it's more of a legitimate takeover target than Alcoa.

Another aggressive stock he favors is AAR, which reports its number on Wednesday.

"The strength we've seen in the airlines should translate directly into an upside surprise for AAR," Cramer said.
King of Hogs

People in the market like companies that can feast on other companies as they go out of business, Cramer told his viewers. One such company is Smithfield Foods (SFD - news - Cramer's Take).

The company, which has a lock on the other white meat market, is the king of hogs, killing 27 million of them a year.

This company "tries to make money, not friends," Cramer said. "They kick competitors when they're down. When they see weakness in a company, they go for blood."

Recently, Smithfield bought Sara Lee's (SLE - news - Cramer's Take) European meat business.

Since Sara Lee didn't have a lot of options, Smithfield was able to take advantage of its situation and take Sara Lee to the cleaners, Cramer said. While Smithfield was to originally pay $900 million, it ended up paying $575 million, practically stealing Sara Lee's European business, he said.

Before Sara Lee, Smithfield went after ConAgra Foods (CAG - news - Cramer's Take) and bought its Cook's Ham division for $260 million.

However, just last year Cook's reported $330 million in sales, Cramer said, adding that when a company buys assets for less than they're worth, it creates a lot of value.

In addition, ConAgra is still weak and might need to sell two more of its brands. If Smithfield keeps feeding on ConAgra's remains, it could buy them both for less than their annual revenues, Cramer said.
Great Expectations

"Sometimes the stock market will do things that don't seem to make sense at all," he said.

Recently, J.C. Penney (JCP - news - Cramer's Take) reported great numbers and raised its earnings forecast.

On the other hand, Abercrombie & Fitch (ANF - news - Cramer's Take) came out with 4% decrease in same-store sales.

However, while J.C. Penney's stock went down, Abercrombie & Fitch's went up. This is because a lot of people know J.C. Penney is a well-run place and Abercrombie & Fitch is a disappointment, Cramer said. It's all about expectations, he said. And the expectations got out of control for the upside of J.C. Penney and for the downside of Abercrombie & Fitch.

Although Cramer believes J.C. Penney is a great stock, he said people knew they were going to beat numbers, and their upside had already been priced into the stock. This is why the company's good news had no positive effect on the stock.

Abercrombie & Fitch has been the worst performer in its group. Thus, there have been a lot of people shorting it, and it has had a lot of put option activity, Cramer said.

While the company did a lot worse than expected, no one sold it, and the shorts panicked, he said. Now, only value investors own Abercrombie at this point, and value investors stay put as long-term buyers.

Cramer said his viewers need to think about buying Abercrombie & Fitch because he believes the value investors know what they are doing. Same-store sales don't matter, he said. Abercrombie & Fitch didn't change its guidance, its inventory is not too high and Hollister, one of their franchises, is the "biggest force in teen retail," he said.

"Fashions might change, but Abercrombie & Fitch is here to stay," he said. "I like J.C. Penney, but if you have value on your mind, Abercrombie & Fitch might be for you."
Heavenly Penney

Cramer welcomed J.C. Penney Chairman and CEO Myron Ullman to the show and asked him how the company delivered its unbelievable number.

"Our team has been consistent quarter after quarter, we've been executing our growth plan, and we have a consumer offering that gives them style and quality at a smart price," Ullman responded.

When Cramer asked him about the company's merchandise mix, Ullman said they have four different lifestyle offerings between the conservative, traditional, modern and contemporary trendy customers. He said merchandising by lifestyle with brands that customers recognize makes J.C. Penney the No. 1 preferred place for brands.

With gasoline prices going up, Cramer said consumers still seem to be spending a lot in J.C. Penney and asked for the reason behind this.

Ullman said that while customers are being careful and smart about how many trips they make, one advantage that J.C. Penney has is that one trip covers 18 different merchandise categories, and customers are finding a lot of things they like at the stores.

To view Cramer's interview with Myron Ullman, click here.
Lightning Round
Bullish

Cramer was bullish on Transocean (RIG - news - Cramer's Take), Nabors (NBR - news - Cramer's Take), Valero (VLO - news - Cramer's Take), Walter Industries (WLT - news - Cramer's Take), Enbridge (ENB - news - Cramer's Take), Nucor (NUE - news - Cramer's Take), AT&T (T - news - Cramer's Take), Lowe's (LOW - news - Cramer's Take), Southwestern Energy (SWN - news - Cramer's Take), Canadian Natural Resources (CNQ - news - Cramer's Take), Citigroup (C - news - Cramer's Take) and Ameritrade (AMTD - news - Cramer's Take).
Bearish

Cramer was bearish on Frontier Oil (FTO - news - Cramer's Take), USG (USG - news - Cramer's Take), Intel (INTC - news - Cramer's Take), Kinder Morgan (KMI - news - Cramer's Take), Insteel Industries (IIIN - news - Cramer's Take), Sprint Nextel (S - news - Cramer's Take), Home Depot (HD - news - Cramer's Take), Chesapeake Energy (CHK - news - Cramer's Take), eBay (EBAY - news - Cramer's Take), Mentor Graphics (MENT - news - Cramer's Take) and St. Joe (JOE - news - Cramer's Take).


Steve Thompson

-- posted by SteveT