JBL: Here We Are, Now Entertain Us

Ow! What happened to the market? I wrote just recently that inflation would begin to be a problem, but I didn't believe it would start happening this week.

The 1990s were unusual: The economy and the market were roaring, but inflation was tame. I believe one thing that happened in the rate increases of 1997 was that while several nations followed suit, inflation didn't increase because commodities prices didn't follow.

The world is working right now, and many economies are raising rates to prevent overheating of their respective countries. The difference this time is commodities are on a huge bull run, which is stoking inflation.

There is a ton of money on corporate balance sheets; raising rates will not affect these companies. What inflation does to the consumer will affect the economy, and the consumer is being affected right now.

I do not believe this will be a hard landing, but I do believe certain sectors will underperform, like airlines, shipping and retail. Housing stocks to me are priced almost at liquidation values and will not underperform.

One thing that generally does not underperform in a soft economy is entertainment companies. CBS (CBS Quote - Cramer on CBS - Stock Picks) is a content company and a content provider that I believe will do well.

Content will always be king; only how it is delivered will change. The Da Vinci Code, for example, will do well.

I love to watch movies in the theater with a huge tub of buttered popcorn and a super-sized Coke, but I watch movies in other ways, too, as do most Americans. Although I believe cinemas and music-only radio are on life support, content, content providers and content enablers are going to do well no matter what the economy does.

CBS faces some headwinds. Tivo (TIVO Quote - Cramer on TIVO - Stock Picks) and losing Howard Stern to its radio division are two very big ones. A positive is Les Moonves.

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