Jim Cramer's Best Blogs
02/10/07 - 09:56 AM EST
Jim Cramer
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 it being the wrong time to buy tech, why Countrywide is a buy, Apple deserving a breakout, picking Pfizer's rivals and Level 3's still-good story.
Click here for information on RealMoney.com, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.Not the Time to Buy Tech
Originally published on 2/5/2007 at 11:23 a.m. You want an untold story? How about the underperformance of tech, despite the endless attempts of people to try to flog the story as a major part of the bull market of 2007? In fact, it would be better to be in the homebuilders or the cyclicals; these are the fantastic performers of 2007. Same with the oils. I would take the steels over the semis any day of the week. Check out the SOX and the Semiconductor HOLDRS(SMH Quote - Cramer on SMH - Stock Picks), the tech bellwethers. They peaked at the beginning of the year and haven't come near taking out their highs. Why is that? I would emphasize that we are right at the seasonal change of heart for tech and you aren't going to get the outperformance you are looking for from this group. If you don't believe this -- and you probably don't -- take a look at Seagate(STX Quote - Cramer on STX - Stock Picks) and Komag(KOMG Quote - Cramer on KOMG - Stock Picks). The latter reported a good number but didn't give good guidance. That was totally fatal and the stock has turned into a major-league bow-wow. Seagate, on the other hand, put up gigantic numbers and guided up huge, yet till is down from where it reported -- actually down a lot as a percentage basis. Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) not doing anything either, and is starting to head down now. Hewlett-Packard's(HPQ Quote - Cramer on HPQ - Stock Picks) been stung by the Dell(DELL Quote - Cramer on DELL - Stock Picks) news of Michael's return and is struggling to get back to where it was. Qualcomm's(QCOM Quote - Cramer on QCOM - Stock Picks) gone from $39 to $37 and has failed to rally on good news. Same with EMC(EMC Quote - Cramer on EMC - Stock Picks). Same with Google(GOOG Quote - Cramer on GOOG - Stock Picks). Don't believe the hype. This is not the moment to buy tech, despite the hype. Better to look elsewhere as the seasonal gravity once again takes its toll. Random musings: One small exception to this downturn is MRV Communications(MRVC Quote - Cramer on MRVC - Stock Picks). That's a restructuring story, though. ... College students, listen up! RealMoney is offering you something special... a free subscription through May 31, 2007. The only requirement: You must have an email address that ends in .edu. Email collegetour@thestreet.com to accept my personal invitation to come read my blog every day, plus all the other writers on that great site. Pass it on! At the time of publication, Cramer was long Hewlett-Packard.Why Countrywide Is Still a Buy
Originally published on 2/6/2007 at 7:32 a.m. The conundrum of Countrywide (CFC Quote - Cramer on CFC - Stock Picks) going up even as another subprime dealer, Mortgage Lenders Network, goes under, may be answered by a simple tenet: The weak hands are going under, leaving the biggest and best to triumph. When I pulled up with Angelo Mozilo, the man who built Countrywide -- the man who is Countrywide, some would say -- we joked about how strong Countrywide's business is because it has always "modeled" the bad loans better than anyone. One of the mistakes made by the analyst community is believing that any loans that go under could be death to a lender. In truth, the good ones model what will happen under a lot of scenarios, and it is pretty clear that Countrywide has the best models. Always has. When the company's stock got bid up on takeover rumors, despite insider selling, I expected it to come right back down. It didn't because what's really happening is the long-awaited shakeout. There have been too many crummy players in this business. You are seeing the small ones go under -- and some larger private ones, too. What you aren't seeing is the pullback in the major brokerages' business that is emblematic of a recognition that the margins got too bad in the subprimers that they bought to get the flow for mortgage back. You heard this if you listened closely on all the big brokers' conference calls. If the brokers are pulling back and the smaller independents are going belly up, that leaves Countrywide to reap the benefits of the inevitable expansion in margin that comes from the end of the price wars for subprime. That's why it is going up. That's why it will continue to go up. That's why Countrywide is still a buy, despite the problems in housing and the headlines about how bad this business is. At the time of publication, Cramer had no positions in the stocks mentioned.Apple Deserves a Breakout
Originally published on 2/7/2007 at 1:44 p.m. Could this be the long-awaited breakout of Apple(AAPL Quote - Cramer on AAPL - Stock Picks)? This stock has been, with the possible exception of Google(GOOG Quote - Cramer on GOOG - Stock Picks), the most profound disappointment of 2007. The froth of the iPhone coupled with a belief that the new device must be a failure because of its price point -- even as my teenage daughters tell me otherwise -- has kept a huge lid on the story. I think that lid could be sliding off. Here's why: We are able, now, to see the power of Steve Jobs. He owns a whole industry with this iTunes, a whole industry. Who can imagine what will happen when we get to iTV?!? Jobs is the most important man in media; therefore, Apple is the most important company in media -- again, with the possible exception of Google. To me that's worth more of a premium than Apple currently sells for. Indeed, the great mystery of Apple is how darned cheap it is vs. its growth rate. Apple sells at 26 times next year's earnings estimate, with a 20%-plus growth rate. That makes no sense and reflects a belief that iPhone's a joke like Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) Zune. It isn't. What people are missing is what was in that great article in The New York Times over the weekend about Motorola(MOT Quote - Cramer on MOT - Stock Picks) and how the Razr wasn't fashionable.Pick Pfizer's Rivals
Originally published on 2/8/2007 at 9:25 a.m. Everybody wanted Pfizer(PFE Quote - Cramer on PFE - Stock Picks)! They all wanted to know about Pfizer. I kid you not! You know I always play Lightning Round wherever I go. One guy will ask me about a stock in the airport, and no sooner do I answer than the next guy has a question and then the guy after that. Sure enough, there's a dozen questions, maybe two. On this trip to University of Virginia for the "Mad Money" Back to School Tour, every time we played I got asked about Pfizer -- maybe seven times. Again, I'm not kidding. Perhaps because I had spent the afternoon with Celgene(CELG Quote - Cramer on CELG - Stock Picks) COO Bob Hugin, in each case I shot back Celgene. The comparison can't be lost on people. Think about it: Pfizer's been making its so-called "upside" surprises by firing people. Celgene's been making its real upside surprises by hiring people and selling more. Pfizer's earnings could go down big in the out years as Lipitor comes off patent and nothing of any size replaces it. Celgene has 75 trials out there for Revlimid alone, its homegrown blood -cancer disease cure. Hugin says there are six other compounds coming that could also be huge. It's hard to believe that the earnings for this company won't be much bigger in six years, maybe much, much bigger. But Pfizer has that yield and that brand name, and even though Celgene is a multi-billion dollar company, it's widely perceived as a one-trick nobody that can never take the Revlimid franchise much further than some international sales. I believe that's wrong. More important, when you buy a drug stock you don't do it for the yield; the only reason Pfizer's yield is so large is because the stock has fallen so much. I like Gilead(GILD Quote - Cramer on GILD - Stock Picks). It's now my biotech stock of the year, and it is on a torrid ramp. I believe Amgen's(AMGN Quote - Cramer on AMGN - Stock Picks) cheap; so's Genentech(DNA Quote - Cramer on DNA - Stock Picks). Genzyme(GENZ Quote - Cramer on GENZ - Stock Picks) seems solid to me. And Celgene's done nothing since that last quarter. All of these stocks on their bad days are better than Pfizer. I wish my Lightning Round friends had heard me. But somehow I think that today, they still own Pfizer, and I have failed in my mission. Random musings: Look, you can see from this experience that you've got to get as many angles on a stock as possible. Here's one more tool to help: TheStreet.com Ratings Screener. Use it to take a fresh look at the stocks you hold now (like Pfizer) or to find exactly the stock you're looking for. At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.Level 3's Story Is Still Good
Originally published on 2/9/2007 at 10:37 a.m. Sometimes you get a stock that runs so much that people sell it even if they know the story is good. Other times, people sell it without even bothering to find out if the story is still good. That's how I felt about the darned Level 3(LVLT Quote - Cramer on LVLT - Stock Picks) earnings conference call Thursday. Level 3 had a very good quarter with lots of good things happening, including lots of solid integration of disparate deals put together to extend the terrific franchise that is going to be THE on-line video company. Of course, the losses are substantial. No kidding. That was forecast. But what's missing is that the interest rate environment is so good that Level 3 can refinance almost everything that it can and fix this balance sheet in a form that will change everything for the better. The deals this company made have turned it into a telephone powerhouse that will generate giant cash flow. I don't think it will have to lay out a lot of capital because most of the properties it has are fresh. I'd use this dip to get in. This is the kind of story that's not stopping here, even as traders and less knowledgeable people bolted before the darned conference call! Random musings: College students, listen up! RealMoney is offering you something special... a free subscription through May 31, 2007. The only requirement: You must have an email address that ends in .edu. Email collegetour@thestreet.com to accept my personal invitation to come read my blog every day, plus all the other writers on that great site. Pass it on! At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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