Financial Advisor Update
Jim Cramer's Best Blogs
Jim Cramer
07/26/08 - 10:43 AM EDT
Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- a bullish case for the dollar,
- the FHA and
- the big picture for financials and energy.
The Buck's Bull Case
Originally published on Monday, July 22, at 2:27 p.m. One hundred billion in euros for dollars, please! That's the InBev-Roche bill coming due for their acquisitions of American companies. Right now, nobody seems to care that we are seeing some real demand for dollars from these companies. It is almost as if they don't matter. Plus, we sure ship enough dollars overseas because of oil that you can believe it doesn't matter much. But I keep wondering how many more deals are out there, how many more deals will take advantage of the big declines. I wonder if the dollar won't strengthen simply because we may be sending fewer overseas because the price of oil is plummeting so hard and going lower. To date, we have seen no industrial takeovers, which is the real shocker, especially when you get numbers like we got from Caterpillar (CAT Quote) today. We have so many industrial companies that are simply shrinking daily because of buybacks and a weak dollar that it is amazing to me that we haven't seen these. I wonder if Dow Chemical (DOW Quote) and Cleveland-Cliffs (CLF Quote) didn't do defensive acquisitions in the last few weeks in order to ward off attacks by European companies that are hungry for U.S. properties. Those would have been natural to pick up. I also can't believe that Hercules (HPC Quote) and Rohm & Hass (ROH Quote) hadn't been bought already.The FHA Can Get It Done
Originally published on Tuesday, July 24, at 11:27 a.m. During the biggest decline in commercial real estate that this nation had seen since 1929, the government swung into action and created the Resolution Trust Corporation to sop of the bad loans and get things moving again. The numbers we saw this morning in existing-home sales remind me of the same kind of gloom -- pervasive, ugly, even scary. And guess what? We are getting legislation courtesy of the run on IndyMac (ironically the biggest "houses will never go down in value" yammerer out there) and the trashing of Fannie (FNM Quote) and Freddie (FRE Quote) that will start our own Mortgage Resolution Trust, except it will go by the name of the FHA. With $300 billion in money to refinance loans, the FHA can take the job of the RTC. Bank of America's (BAC Quote) Countrywide-servicing division will offload people to it, so will Wachovia (WB Quote). They might do it en masse, they might be able to do it. You will get a chance, by the way, to buy BAC off of what looks like the next big collapse/refinancing-if-lucky -- Washington Mutual (WM Quote), the most reckless lender left.Picture Becomes Clearer in Banks and Energy
Originally published on Thursday, July 24, at 1:12 p.m. Which is more vulnerable here, American International Group(AIG Quote) or Occidental Petroleum(OXY Quote)? Which would you rather sell, ConocoPhillips(COP Quote) or Merrill Lynch(MER Quote)? I think all of these stocks are going down. But I think that I can put values on OXY and Conoco. I like buying stocks at six times earnings. I like buying companies that are buying back stock and can boost dividends. I don't like companies that have to issue stock or cut dividends including ones that have just been boosted -- recklessly, like AIG did. It seems to me that we are getting closer to drawing a line in the sand for Big Oil where we want to buy stocks at six times earnings going to five times earnings. At the same time, we want to buy the fortress banks -- Bank of America(BAC Quote), JPMorgan(JPM Quote), Wells Fargo(WFC Quote) and U.S. Bancorp(USB Quote) -- into the weakness, dabble with Wachovia(WB Quote) when it gets to below what Bob Steel paid, and avoid the unquantifiables like Merrill and AIG, both of which I think need more capital. And I am looking to sell Citigroup(C Quote), which is not a fortress. I am looking at this AIG and MER roll over and all the other financials with them. I am looking at oil crumble again -- and I don't want to bet on crude, which I think is going $110-$120, but I do believe that these stocks are going to be the ones you want to buy down every few points, along with Devon(DVN Quote), and the cheapest of all, Cabot Oil & Gas(COG Quote). The latter two are nat gas, which is poison now but can't remain so once whoever is long gets out. There is a pervasive long out there blowing out every second. The only thing I know is that $8.99 is supposed to be the long-term spot where industrial demand is, and we hit that level and bounced, but I am not a technician, and you don't want me to start being one at this age! Anyway, I think that we can now be selective in what we sell in finance and selective in what we buy in oil. Do not need to scale-sell AIG, I would scale-sell Merrill, and I would scale-buy the major oil companies, lest you wait until they are in buying and miss it. Random musings: You know it is bad in Japan when they stop buying cancer insurance -- look at that Aflac(AFL Quote), and that's a great company! At the time of publication, Cramer was long Cabot Oil & Gas and Devon Energy. |
 |