How Far Down for the Dow?

AT&T (T - commentary - Cramer's Take) ($41.95, $32): The stock of the original "Ma Bell" was one of the few to hold up during the 1930s, and her successor, trading not much above investment value, may be one of the few to hold up during the modern 1930s. Bear in mind, though, that she has gotten older between then and now.

Boeing (BA - commentary - Cramer's Take) ($93.90, $21.75): This stock is way overvalued on today's metrics, because it has commanded a "war premium" since 1991.

Caterpillar (CAT - commentary - Cramer's Take) ($73.57, $26): Another cyclical, this one recently traded over three times investment value. There's downside all the way to $25-$30.

Citigroup (C - commentary - Cramer's Take) ($42.36, $46.75): This company is trading below its investment value. Downside is limited if earnings are solid and book value and the dividend are secure, but that's a big "if."

Coca-Cola (KO - commentary - Cramer's Take) ($58.76, $22): Coke is a steady producer of a variation of a necessity (flavored water) that deserves a premium to investment value, but not as large as the current one.

Disney (DIS - commentary - Cramer's Take) ($34.27, $19.50): How much is a mouse worth? Given its brand, it probably deserves only a small premium to investment value.

Du Pont (DD - commentary - Cramer's Take) ($47.16, $26): There are a lot of moving, cyclical parts here. It does not deserve much of a premium to investment value.

ExxonMobil (XOM - commentary - Cramer's Take) ($92.14, $35.50): It often traded at a discount to investment value in the 20th century, and that's a long way down.

General Electric (GE - commentary - Cramer's Take) ($40.04, $22.50): The whole is less than the sum of its parts (GE Capital in particular, ought to be spun off): After peaking at about five times investment value in 1929 (and again in 2000), it sold at only a small premium in the 1930s. That makes it a $20-something stock, not a $30-something.

General Motors (GM - commentary - Cramer's Take) ($37.60, $2.25): Takeover or bankruptcy candidate? The negative book value and shaky dividend say it all.

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At the time of publication, Au was long Alcoa, Johnson & Johnson and Pfizer, although holdings can change at any time.

Thomas P. Au, CFA, is a principal with R. W. Wentworth, a financial services firm in New York City. Earlier he was an emerging markets portfolio manager for the investment arm of Cigna Corp. and an analyst with Unifund, S.A. of Switzerland and Value Line. He graduated cum laude with a B.A. in Economics and History from Yale University and an M.B.A. in Finance from New York University. Au is the author of A Modern Approach to Graham and Dodd Investing. Au appreciates your feedback; click here to send him an email.