Focus on Demand, Not Forecasts

Nothing like demand. When you have a terrific demand story, even if you execute poorly, your stock can be a buy. Let's contrast Phelps Dodge (PD - commentary - Cramer's Take) with Intel (INTC - commentary - Cramer's Take).

Phelps Dodge reported a miserable quarter, really awful when it came to its execution. The stock got hammered. Now it is back to where it was. That's incredible -- giant number cuts and boom, right back. Just a terrific opportunity, because copper demand is out of control, courtesy of China.

Now, Intel, on the other hand, has a lot of chips for the wrong products -- personal computers -- and not much for communications. Intel reports a bad quarter -- not as bad as Phelps Dodge, though -- and it hasn't had an uptick since. It is just plain ugly and nasty.

I believe that increasingly, when we look at selloffs, like the selloff I am praying for in Halliburton (HAL - commentary - Cramer's Take) so I can buy it for Action Alerts PLUS, you need to check demand, not forecasts, which are now genuine Main-Street gibberish meant to appease Wall Street. No thanks!

By the way, if you want a demand story that isn't reflected in a stock, I want to go back to UnitedHealth (UNH - commentary - Cramer's Take), which is way down even though the federal government is creating demand left and right when it comes to Health Savings Accounts, Medicare expansion and new tax breaks for health care.

Random musings: The endless plays on the generics -- AmerisourceBergen (ABC - commentary - Cramer's Take), Medco (MHS - commentary - Cramer's Take), Cardinal (CAH - commentary - Cramer's Take) -- are incredible. No one ever believes those stocks have gotten expensive. Who am I to disagree?

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At the time of publication, Cramer was long Intel, Halliburton and UnitedHealth Group.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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