This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

'RealMoney' Radio Recap: Energy Rules

Despite the stark selloff in energy stocks this week, don't lose focus on what propelled the stocks higher in the first place, said James Cramer Friday on his "RealMoney" radio show.

At the core of what has been driving the stocks is demand from China and to a lesser extent, India, he said. Those fundamentals haven't changed.

Don't become too focused on short-term inventory data, figures from Hurricanes Rita or Katrina, heating oil, the amount of gasoline pumped or our inability to conserve, said Cramer. Until demand from China and India is quelled and new reserves are found, the fundamental picture of demand and supply isn't going to change, he said.

Nevertheless, Cramer listed five negatives and five positives for owning energy stocks. The negatives, as he sees them, include:

1. Momentum funds: These funds buy energy stocks aggressively on the way up and dump them with abandon on the way down.

2. The declines in energy stocks have become brutal, taking away much of the fun in owning them.

3. The media and analyst community seem convinced energy prices are going lower.

4. Energy stocks could have "quicksand" underneath them as a result of going up so far, so fast.

5. Energy stocks are no longer under-owned.

The positives include:

1. No other companies have earnings revisions upward as big as what you can expect from energy stocks.

2. We're not discovering a lot of new energy reserves.

3. Terrorist attacks often cause energy prices to rise, and there will surely be more terrorist attacks.

4. Takeovers in the energy sector are likely to pick up again now that energy stock prices have fallen.

5. A big investment theme like energy usually isn't over in 18 months. Such themes usually last three or four years before running out of steam.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,916.03 -69.58 -0.41%
S&P 500 1,965.32 -7.51 -0.38%
NASDAQ 4,398.00 -21.0340 -0.48%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs