Investment

» lcha - Study Says: Buy what Cramer Says to Sell

In response to Study Says: Buy what Cramer Says to Sell posted by Kirk:

Kirk, what channel is Cramer on? Do you know if their website list his buy and sell recommendations daily? How about shorting his buy recommendations?

-- posted by lcha

» Thruhiker - Study Says: Buy what Cramer Sells

In response to Study Says: Buy what Cramer Sells posted by Kirk:

I was out of town and was using the scan feature on the car radio and actually caught him on the radio as well. I think, but am not sure, that it was a replay of the previous days tv show.

-- posted by Thruhiker

» SteveT - 'Mad Money' Recap: Back to School

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

"Tonight I'm going to give you some of the best educational supplements," Jim Cramer told "Mad Money" viewers Friday in a show compiled of previously broadcast clips that Cramer felt would help educate people.

He said the segments would deal with leaderless markets, volatility and the difference between speculating and investing, all of which would be geared to making money.

"First I'll tell you how to deal with a leaderless market," he said.

The markets need generals, he explained, adding that the leaders of the last market run-up are all played out. "The generals are dead," Cramer said, and listed Cisco (CSCO - news - Cramer's Take), Dell (DELL - news - Cramer's Take), Microsoft (MSFT - news - Cramer's Take), Intel (INTL - news - Cramer's Take), Broadcom (BRCM - news - Cramer's Take), Marvell Technology (MRVL - news - Cramer's Take) and Google (GOOG - news - Cramer's Take) as examples of previously hot stocks that are now lukewarm.

He also added General Motors (GM - news - Cramer's Take) and Wal-Mart (WMT - news - Cramer's Take) as two stocks that may have "lulled us into a false sense of security," but that didn't, in the end, have the right stuff to rescue the market from its latest slide.

"We're leaderless, headless and things will get volatile," he said. "It's because we've got no generals. They shot them all."

To beat the rudderless market, Cramer suggested that investors stand to benefit by buying stocks of commodity companies, as well as recession stocks. "But, he said "they can't go up at the same time. It's like a seesaw."

He recommended Clorox (CLX - news - Cramer's Take) as a good investment in the current environment.

"We need a new general. A new secular growth story that we can depend on," he said. "In this situation where the general is dead, you need some recession stocks and some commodity stocks."

"Remember where ignorance reigns, cash be king," he said.
Volatility: A Love Story

In the next segment, he turned to volatility.

Volatility can be scary, it can make you feel like you understand nothing about the market, and it can make you feel like the market is positively bipolar, Cramer said.

"But [it is] time to stop worrying and learn to love the volatility and make money off of it," Cramer said.

In his two-step plan to profit off of volatility, Cramer said first you must understand the market, and then learn to trade off of it.

"The number one reason getting in your way of making money is lack of understanding volatility, he said. "You get volatility when the market cannot process supply and demand correctly."

When there is no volatility, buyers and sellers are in equilibrium. But this is not the state we are currently in, Cramer said. "Our equilibrium has been destroyed," he said.

The first source of volatility, Cramer explained, is that brokers don't position any more. Positioning is when hedge funds don't dump stock, but instead sell stocks slowly.

"This prevented volatility," Cramer said. But brokers have stopped positioning because it has become less profitable. "Commission is too low, and interest rates are too high," Cramer said.

The second reason the market goes up and down really fast is because of new exchange-traded funds (ETFs). They move much faster than individual stocks, so when you buy or sell ETFs, the stocks in them either get crushed or lifted with a crane, Cramer said.

The third cause of volatility is hedge funds, which buy and sell stocks quickly, Cramer said.

"Hedge funds are pushing stocks up and down," he told his viewers. "You are at the mercy of mutual funds, pension funds and hedge fund accounts."

It's only the big institutional funds that have that power, he explained. And then turned to how even individual investors, which are partly at the mercy of price swings caused by hedge funds, could still make money.

"If there's one thing I'm good at, it's trading," said Cramer.

First, pick a stock that you really like, he said.

To show his viewers how to play the volatility game, Cramer picked Occidental Petroleum (OXY - news - Cramer's Take).

"OXY is the least hedged of all the oils," Cramer said. "It's in the prime position for volatility."

When you're looking for a company that has volatility, Cramer warned, it should not be a bad company.

After you pick a company, take an opinion, he said.

"Opinions matter to make money," Cramer said. "Act on your opinion based on your convictions."

Taking his example of OXY, Cramer said if you have 300 shares of it, drop 50 shares every time it jumps 3%, and when it goes down, buy it back.

"Treat trading like a dance," he said. "When the stock goes up, sell a little and when it goes down, buy a little."

Buy and sell your stock in increments because small trades equal big payoffs, he said.

The bottom line is you can make money off of a volatile company if your trading strategy includes core positioning, Cramer said. "Take my rules and apply them to yourself."

Cramer gave Pepsi (PEP - news - Cramer's Take) and Sears (SHLD - news - Cramer's Take), which he owns for his Action Alerts PLUS charitable trust, as two examples of companies with core positions.
Speculation Recommendation

Cramer now turned to speculation and what it means for would be investors.

"The market is full of people who are speculating," Jim Cramer told viewers. We've got fools speculating, and they don't know what they are doing, he said.

Finisar (FNSR - news - Cramer's Take) has been cut back by 25% because of speculation, Cramer said. You need to know precisely what a company does and what it is levered to, otherwise you should not own its stock, he said.

"I love speculating, but you have to do it right," he said. "Speculating is not investing. When you confuse the two, you get annihilated."

You should speculate only if you are comfortable with it, Cramer said. You have to separate it from investing. If you want to speculate right, this is the time to do it, he said.

"The risk level is totally different," he said.

Speculative stocks often don't have positive earnings yet, they move a lot when there is only a little news about them, they are small, cheap stocks that are much riskier than regular stocks. In addition, there are usually one or two things that could make or break a speculative stock, so you must follow some ground rules, Cramer said.

First, never speculate with borrowed money, he said. These are risky investments, and there is a chance you could lose it all.

Second, only speculate with money you can afford to lose, Cramer said. As you get older, speculate less because then you have less time to make the money back if you end up losing it. He recommended 54 as the cutoff age for speculating.

Third, never put more than 20% of your portfolio in speculative stocks.

Speculative stocks usually trade in the $2 to $4 sweet spot, but you should ask yourself how they got there. Speculative stocks have checkered pasts. You have to make sure you do your homework before you speculate, Cramer said.

Fifth, don't speculate on debt-ridden companies. And finally, keep track of the financing that speculative stocks require.

"The bottom line: Know what you are doing so you don't speculate when you mean to invest," Cramer said. "And when you decide to speculate, do it the right way."

I want to do more than teach you how to speculate like a pro, Cramer said. I have put together 10 stocks with my team to create a "Mad Money" speculative-stock index, he said.

The stocks in this index are:

* Rentech (RTK - news - Cramer's Take)
* Crystallex International (KRY - news - Cramer's Take)
* Ivanhoe Energy (IVAN - news - Cramer's Take)
* Transmeridian Exploration (TMY - news - Cramer's Take)
* Northgate Minerals (NXG - news - Cramer's Take)
* EuroZinc Mining (EZM - news - Cramer's Take)
* JDSU (JDSU - news - Cramer's Take)
* Conexant Systems (CNXT - news - Cramer's Take)
* Finisar
* Ciena (CIEN - news - Cramer's Take)

Rentech is not making money, and there is no guarantee its technology will ever be used; Crystallex is play on a gold mine that might never happen; Ivanhoe's prospects could be fictional for all we know, Cramer said.

Transmeridian is based on one project that could be confiscated tomorrow; Northgate Minerals relies mostly on gold and copper, and its main mine could have a short lifespan; EuroZinc Mining has one main copper mine in Portugal. If there's any disruption there, that project will go down the tubes, Cramer said.

JDSU has an optical market that is volatile, and it has very little insider ownership; Conexant's balance sheet should lose 7 cents per share in 2007, and it needs to refinance, he said.

Finisar has serious competition, and even after reporting a good quarter, the stock got pounded in the market today, Cramer said. And Ciena's future operating margins are questionable, he said.

"Speculative stocks are a sector of their own," Cramer said. "They are radically underperforming. Since May 11, my speculative index is down more than 15.49%."

"When the speculative index is cheap, that is when we want to start to get in," Cramer said.

You should speculate, he said. It's where the big money comes from, but you have to do it carefully and methodically because it is a risky business. You should have a few speculative stocks, he added. You need to be diversified when speculating also. It should only take up a fifth of your portfolio, he said.

"You should do an hour of homework per stock per week," he said and warned that those not keeping up with the research would likely lose.

Steve Thompson

-- posted by SteveT

» doctorj2 - 8/1/06 Bearish on Finisar @ $2.72

In response to 8/1/06 Bearish on Finisar @ $2.72 posted by Kirk:

Looks like the bears may be out in force tomorrow (9/06) on FNSR as revenues and earning came in a little light after the bell. FNSR was down more than 11% in after hours trading.

-- posted by doctorj2

» SteveT - Jim Cramer's Mad Money Lightning Round Picks, Oct. 11

.
http://seekingalpha.com/article/18318

...
LAM Research (LRCX): '... just reported a monster quarter. I predict massive upgrades tomorrow. That one is strictly 'buy, buy, buy!'
...

Does this explain the after hours action?

.

-- posted by SteveT

» PEIC - Oct. 12 Stop Trading! Stock Picks

Thursday October 12.

Phelps Dodge (PD):Hedge-fund Atticus is looking for a buyer for PD and Cramer thinks this copper producer is a good prospect especially given the enthusiasm for mergers in metals.

Pepsi (PEP), Colgate (CL), Clorox (CLX), Procter & Gamble (PG): Although PEP reported a good quarter, Cramer points out that its 8% growth in Gatorade sales show that consumer goods might have reached their peak and he would sell the stock along with CL, CLX and PG.

Yum (YUM), McDonald's (MCD) and Darden (DRI): The food business is good, according to Cramer who notes that there is still some unjustified unease about the market and that "it is very uncool to talk about a rally." Cramer predicts that the market is going through 12,000 on the Dow.

-- posted by PEIC

» PEIC - Mad Money Lightning Round Picks Oct 12

Bullish calls:

Harrah's Entertainment (HET): 'This one is still down substantially from where it traded in May. I think they're trying to steal the company. I'm pulling the trigger.'
Capital One Financial (COF): ' ... by far the cheapest credit card company. I want you in Capital One. You ain't seen nothing yet with COF.'
Phelps Dodge (PD): 'So many ways to win. Housing demand coming back.'
Infosys Technologies (INFY): 'We nailed that thing ... in our game plan last week ... It reported a beautiful quarter, and I think it goes higher. I'm not getting off the bull yet.'
Applied Materials (AMAT): 'Even though it's not my favorite, because I like the fundamentals of tech right here, and seasonality, it's buy, buy, buy!'
RadVision (RVSN): 'I like it even now; it's up big.'
Marriott (MAR)
Hilton (HLT)
Target (TGT): 'I love Target, and I would buy it here.'

Bearish calls:

Perficient (PRFT): '... it's another outsourcing company. There are so many of these. Not for me.'
Morgan's Hotel Group (MHGC): ' ... that company came public, and it's been a total bow-wow. They don't even really own the hotels.'
Acorda Therapeutics (ACOR): 'You bought a stock at 9 and it's at 18. Bulls make money, bears make money, pigs get slaughtered. You need to ring the register, my friend.'
eBay (EBAY)
Chesapeake Energy (CHK): 'You better hope for an ice age. Without a tsunami of ice, you are going to lose money on that. SellSellSell.'

-- posted by PEIC

» Thruhiker - Mad Money Lightning Round Picks Oct 12

In response to Mad Money Lightning Round Picks Oct 12 posted by PEIC:

Re ACOR -- it was just over $2 about 3 weeks ago. Momo guys doing alright.

-- posted by Thruhiker

» PEIC - Mad Money Stock Picks, Fri Oct. 20

Monster Deal: Yahoo (YHOO), Monster Worldwide (MNST)

Continuing his series of discussions about which companies Yahoo should pick up to give the company a lift, Cramer recommended Monster which he described as a 'broken stock but not a broken company." Given Google 's (GOOG) success, it is obvious that Yahoo's problems are not related to the sector but to its management. Even if Yahoo does not buy Monster, Cramer believes it is worth owning since MNST charges more for listings than rival sites, has deals with newspapers and owns 48% of the online job market. However, Cramer would rate Yahoo as a triple buy if it dismisses CEO Terry Semel.

Cheers! Diageo (DEO), Altria (MO), AT&T (T), Catepillar (CAT) and Molson Coors (TAP)

Cramer identifies DEO as a "total-return" stock with high dividends and strong growth which resembles Altria (MO) and AT&T (T). Diageo has a 10% growth, 4.1% dividend and 16% multiple and is an inexpensive stock. He says the DEO is the opposite of Catepillar (CAT) which was down badly on Friday. This high-end liquor company owns "60% of the world's top brands," and Cramer calls Diageo the "greatest marketing company of all time" since it is able to sell basically the same product for more money because it has aged longer and has a classier label. In addition, Cramer predicts that Diageo will "make a killing" next year in China and should do well in other BRIC countries. On the other hand, he says that Molson Coors (TAP) has slow growth and is "falling off the wagon."

Stocks for the Coming Week: Oregon Steel (OS), Alaska Air (ALK), Continental Airlines (CAL), AMR (AMR), Corning (GLW), Anheuser-Busch (BUD), Bristol-Myers (BMY), General Motors (GM), Ford (F), and Comcast (CMCSA)

Cramer recommends picking up OS after Thursday's selloff and since he expects the company to report a "blowout quarter." ALK's performance should equal that of CAL and AMR, and Cramer suggests buying some before it reports on Tuesday, as well as picking up GLW ahead of Wednesday's report. BUD will get "hammered" next week, according to Cramer who would switch to Diageo, and he would also get rid of BMY since it has declined. GM which works as a play off of Ford can be bought after its report comes out on Monday, and Cramer has confidence in Comcast.

Special Guest: Chicago Bears' Wide Receiver Muhsin Muhammad; FedEx (FDX), Exxon Mobil (XOM), IBM (IBM), Bank of America (BAC), and MetLife (MET)

Cramer welcomed Mushin Muhammad onto the show and commented on a story he heard on CNBC that phoney hedge funds are trying to hit up high-profile football players. Muhammad replied that the NFL has an FBI-managed security program that does background checks and that he has "smart guys" working for him. Cramer commented that Muhammad's portfolio, which includes FDX, XOM, IBM, BAC and MET is not only diversified, but he is in 'the house of pleasure." Muhammed discussed the M2 foundation, a charity he founded which is dedicated to the mental and physcial development of children.

-- posted by PEIC

» PEIC - Stop Trading! Stock Picks and Comments, Oct. 20

Catepillar (CAT), Terex (TEX), Parker Hannifin (PH): Cramer calls the major selloff in CAT on Friday "ridiculous" and notes that in spite of troubles with housing, some of its businesses are "on fire." He would buy the stock with two points down and ten points up. Even with no housing exposure, TEX is down 9% and PH has declined 8% and Cramer would buy both of them.

3M (MMM): Cramer says that 3M reminds him of CAT since it went down too far too fast because of July earnings warnings. He predicts that analysts will raise their estimates and says that 3M is a buy.

-- posted by PEIC