You Don't Have to Chase the Improving Consumer

You don't need to own the retailers that are levered to the consumer doing better. Today's a great example.

People might want to catch Kohl's (KSS - commentary - Cramer's Take) and J.C. Penney (JCP - commentary - Cramer's Take) or Macy's (M - commentary - Cramer's Take).

But you would be doing just as well or better owning the three trade-down names, TJX (TJX - commentary - Cramer's Take), Wal-Mart (WMT - commentary - Cramer's Take) and Costco (COST - commentary - Cramer's Take), as well as the only upside surprise name in the game: Urban Outfitters (URBN - commentary - Cramer's Take).

The trade-down names have little to no earnings risk and are somewhat immune to downgrades. Consider that BJ's (BJ - commentary - Cramer's Take) was downgraded yesterday, and yet it is moving up smartly today. That's a trade-down name that works.

Wal-Mart is such a better alternative to Home Depot (HD - commentary - Cramer's Take), Lowe's (LOW - commentary - Cramer's Take) or Sears Holdings (SHLD - commentary - Cramer's Take), because on the up retail days Wal-Mart goes up as much or almost as much as the Home Depot/Lowe's/Sears group. But on down days, the Home Depot/Lowe's/Sears troika is total poison.

I don't like retail, but I do like retail that is twice-blessed. If you can find retailers where the estimates can be met -- Costco/Wal-Mart/TJX -- or beaten - Urban Outfitters -- you are going to outperform the whole market, because portfolio managers need to own something retail. You do fine on days like today with these, because hedge funds come in and buy ETFs to get into reverse oil plays -- gasoline going down -- and you get to benefit, too!

Random musings: The best oil play at this very moment would be XTO Energy (XTO - commentary - Cramer's Take), down 4 because the numbers are too low. The best coal play is Peabody Energy (BTU - commentary - Cramer's Take), as China needs coal. The best infra play is Foster Wheeler (FWLT - commentary - Cramer's Take), which tends to have massively exaggerated moves on days like today. Ag? Let them come down a little. That's tomorrow's play.

At the time of publication, Cramer was long Wal-Mart and Foster Wheeler.

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