Mad Money Recap
Cramer's 'Mad Money' Recap: Bye, Bye Bears
Scott Rutt
07/30/08 - 07:40 PM EDT
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"I'm sticking my neck out and calling the bottom," Jim Cramer told viewers of his "Mad Money" TV show on Wednesday. With earnings coming in strong across the board, except in the financial sector, Cramer said the markets may finally be leaving the bears behind. He said the negativity in the market is striking. He cited an investor intelligence survey, which indicated that only 30% of investors are bullish, while 50% are bullish on the markets. "It's always darkest just before the dawn," he said. According to Cramer, Merrill Lynch's (MER) blueprint for jettisoning much of the company's bad debt is one positive sign that the markets may be turning upward. "We've been waiting for a blueprint, and that's exactly what they gave us," he said, noting that shares of the company rose 10.6% on the news. Cramer also noted strength in such diverse companies as Clorox (CL), Cummins (CMI), Avon (AVN) and US Steel (X) as further evidence that the market is beginning to turn. Furthermore, Cramer said with oil prices falling from $148 to $121 a barrel will continue to bode well for the markets. He predicted oil could continue to fall as low at $110 a barrel before finally stabilizing. With other commodities, like gold, also following suit, Cramer said many industries could continue to provide the market with upside surprises.
Cramer: What Merrill and Lone Star Aren't Telling You |
Ride the Blackberry Bold
Cramer proclaimed that August will be Research In Motion (RIMM) month, ahead of the launch of its newest product, the Blackberry Bold. "The iPhone isn't the only way to show off to your friends," joked Cramer, who called Research In Motion a steal at just $119 a share.
A Linux Treat
Cramer talked with Jim Whitehurst, president and CEO of Red Hat (RHT), a company which Cramer said he's never fully understood or appreciated. Whitehurst said Red Hat has a special business model that no other competitors have. The company's large developer community provides it with great software at little cost, allowing Red Hat to have higher than average margins. He further explained that Red Hat's Linux operating systems run in many large, mission critical applications where Microsoft (MSFT) just can't compete. He cited the NYSE Euronext (NYX) as one such large customer. Whitehurst said that Oracle (ORCL) is a partner of Red Hat and not a competitor, saying that the company recently endorsed Red Hat as its operating system of choice. Cramer called Red Hat an inexpensive stock when compared to its growth rate and recommended looking into the company as an investment.Am I Diversified?
Cramer talked with callers about their portfolios. The first caller's portfolio included General Mills (GIS), Boeing (BA), Darden Restaurants (DRI), AT&T (T) and IBM (IBM). Cramer said all five companies are very well run and called this portfolio "perfect." The second caller's top holdings included Vivo (VIV), Dr Reddy's (RDY), Tata Motors (TTM), Coca Cola (KO) and Motorola (MOT). Cramer called two of a kind with Vivo and Motorola. He recommended selling one of them in lieu of a defense contractor or large conglomerate.