Too Early to Sell the Soft Goods

So now we hate the drug stocks. Now we think they aren't delivering on the numbers. We are selling Merck (MRK - commentary - Cramer's Take) and Schering (SGP - commentary - Cramer's Take) and we hate Johnson & Johnson (JNJ - commentary - Cramer's Take). We dismiss the upside surprise for Forest Labs (FRX - commentary - Cramer's Take). Celgene's (CELG - commentary - Cramer's Take) weak again, so hated, so despised despite so many positives.

I say this is all business as usual. Every time we think oil has bottomed, we sell these stocks. When we see anything good -- a Freeport (FCX - commentary - Cramer's Take) that doesn't go down on a downgrade, a Baltic Freight Index rally, anything that shows a pulse for the economy -- we get a selloff in the stocks of businesses that are delivering double digits.

I have a problem with this. Take J&J. Here's a company that's taking advantage of the declines in stocks and is buying up higher-growth companies to ensure out-year growth. The market doesn't like that? What does it want, Pfizer (PFE - commentary - Cramer's Take), which does nothing to help the out years?

Of course, these declines are coupled with the declines in General Mills (GIS - commentary - Cramer's Take) and Pepsi (PEP - commentary - Cramer's Take), two other steady eddies that go down when oil goes up, even though we know that year over year, the comparisons will be hugely positive.

Don't blame the dollar. J&J has huge strong-dollar exposure, but GIS and PEP have far less than many of the other soft-goods plays.

I am not backing away from the recession-resistant names. (Oh, and I think that Wal-Mart (WMT - commentary - Cramer's Take) is a great recession-resistant name.) I truly wish there was more oomph to the economy to justify selling these stocks.

But we just don't have it, and we don't see it in sight.

You don't sell these stocks until you see the economy bottoming -- not going up, but bottoming.

It isn't.

You can't leave them yet. Too early.

Random musings: Love the Bob Marcin comments in the Columnist Conversation. ... At least Abbott (ABT - commentary - Cramer's Take) is bucking the drug trend. ... MasterCard's (MA - commentary - Cramer's Take) a terrific gauge for shorts vs. longs, but remember it is Visa (V - commentary - Cramer's Take) that is in the ProShares UltraSHort Financials (SKF - commentary - Cramer's Take). ... I can't believe that the exchanges out there, London, Germany and the NYSE Euronext (NYX - commentary - Cramer's Take), don't just merge. ... Yes, we need Geithner, even though I have myriad reasons not to support him. He is Obama's man, and the banks can't handle many more days of indecision.

At the time of publication, Cramer was long Johnson & Johnson, Procter & Gamble, General Mills, Wal-Mart, Freeport-McMoRan, Celgene and Pepsi.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman 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. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.