Jim Cramer's Best Blogs

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:

• the five stocks to watch;
• getting the oil game plan;
• the supply squeeze behind the surge;
• a 'what works' shopping list; and
• long-term defense-stock picks.

Click here for information on RealMoney.com, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

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Five Stocks to Watch This Week

Originally published on 4/23/2007 at 7:02 a.m.

We could use a breather here. I just don't know if we will get it.

So many stocks went up so much last week that you could argue that too many were propelled by the machinations of options expiration. I just don't believe we should see so many stocks that didn't report great quarters as high as we have seen them.

We had a lot of Dow stocks, like Honeywell(HON Quote - Cramer on HON - Stock Picks), United Technologies(UTX Quote - Cramer on UTX - Stock Picks) and Merck(MRK Quote - Cramer on MRK - Stock Picks), just roar upward a huge number of points without any profit-taking whatsoever.

It is entirely possible that those leaps will have firm footing. We have seen that happen during the periods when we have tacked on 1,000 points in the Dow. But right now there's no skepticism whatsoever about this move, and I can't recall moves that were permanent where you didn't have more skepticism.

This is a key week. There are no expiration games. I am keying on these stocks that reported just so-so earnings in the last few weeks to determine whether it was expiration that drove things, particularly Friday:

1. Nike(NKE Quote - Cramer on NKE - Stock Picks)
2. IBM(IBM Quote - Cramer on IBM - Stock Picks)
3. FedEx(FDX Quote - Cramer on FDX - Stock Picks)
4. Illinois Tool Works(ITW Quote - Cramer on ITW - Stock Picks)
5. United Health(UNH Quote - Cramer on UNH - Stock Picks)

These companies all started going up at the end of the week, and I think they were simply swept up by futures. If they begin to go down we will get a sense that a non-futures related market may not be as robust as last week and could be vulnerable. It's the weak companies that fail first in a repeal of a good run.

Let's take a look.

Random musings: The strong bond market, which was not supposed to be in the cards for the perma-inflationists, of which there are many, gave an extra boost to the high multiple companies last week -- everything from Intuitive Surgical(ISRG Quote - Cramer on ISRG - Stock Picks) to Google(GOOG Quote - Cramer on GOOG - Stock Picks). If we go to 4.5% on the 10-year, I think we will get another wave upward.

At the time of publication, Cramer was long UnitedHealth Group.

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Get the Oil Game Plan

Originally published on 4/24/2007 at 11:17 a.m.

After all the talk about energy independence and more drilling and a sense that there's oil, oil everywhere, we find once again that we are always one producer away from the posse. Nigeria, yes, Nigeria, can take us perilously close to $70. You get Nigeria and Venezuela off their games and you are in the mid-$70s per barrel of crude.

That's why you can still buy drillers, something that you're getting a chance to do off the BJ Services(BJS Quote - Cramer on BJS - Stock Picks) quarter. I know that Halliburton(HAL Quote - Cramer on HAL - Stock Picks) is like BJ and I have no expectations for this quarter. I also know that the international drillers -- Transocean(RIG Quote - Cramer on RIG - Stock Picks) and GlobalSantaFe(GSF Quote - Cramer on GSF - Stock Picks) work best -- and that National Oilwell Varco(NOV Quote - Cramer on NOV - Stock Picks) makes a ton of sense.

But I also have to caution that oil going higher is still a gigantic negative for so many companies that you can expect it to be a damper until we see the Fed reacting to the new tax on the consumer -- at the pump -- and make a move that is so darned necessary.

So, the takeaways: International oils now, domestic drillers after these quarters (go read Schlumberger's(SLB Quote - Cramer on SLB - Stock Picks) quarter if you disagree) and oil and gas plays, domestic and Canadian, in the third quarter.

Random musings: Is there any season when Medco Health Services(MHS Quote - Cramer on MHS - Stock Picks) can't be right? Kudos again to Dave Peltier with another great call: ATP Oil & Gas(ATPG Quote - Cramer on ATPG - Stock Picks), right on top of Hasbro(HAS Quote - Cramer on HAS - Stock Picks) and Oakley(OO Quote - Cramer on OO - Stock Picks). Click here to see more of his picks.

At the time of publication, Cramer was long Halliburton and Transocean.

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Tight Supply Squeezes Market Higher

Originally published on 4/25/2007 at 11:26 a.m.

Where the heck is all of the supply? For six years stocks have meandered with sellers always above the current prices. That caused an endless chew-through that often could not be eaten.

How many times have you seen big upside surprises and gotten nothing special in the stock's price action, maybe a point up, and then two weeks later, the sellers would be back, motivated and blowing out of shares. This is the concept, if you have ever traded institutionally, of having heavy offerings that serve as a roof and then, in a few days, you get the sellers off the offering and hitting the bids.

Now, you have the opposite. Whether it's today's Amazon(AMZN Quote - Cramer on AMZN - Stock Picks), Aflac(AFL Quote - Cramer on AFL - Stock Picks), Air Products(APD Quote - Cramer on APD - Stock Picks), Black & Decker(BDK Quote - Cramer on BDK - Stock Picks) or Bard(BCR Quote - Cramer on BCR - Stock Picks), or all-week stocks such as Honeywell(HON Quote - Cramer on HON - Stock Picks), Paccar(PCAR Quote - Cramer on PCAR - Stock Picks), Cummins(CMI Quote - Cramer on CMI - Stock Picks) or Whirlpool(WHR Quote - Cramer on WHR - Stock Picks), you have limited supply. That's how you get these gigantic one-day moves that are then not repealed.

Earlier today I opined that if you just willy-nilly buy back stock without a sense of cheapness, you waste shareholders' money. But if you have conviction, as all of the companies mentioned here have, you get a delicious combination of buybacks that have taken out excess supply and institutions that can't get in without paying up.

But let's add in something else, something truly amazing, an away team that gets blown out by these numbers. That's the hedge funds. They are providing the offerings ahead of many of these quarters -- check out Amazon -- and just borrowing that inventory, and have to buy it back much higher.

It's amazing to me, as someone who has had to ask for offerings to buy stocks when I wanted to buy them in size, how few firms will even offer stocks. They don't want to be in short supply. So the supply can't be found until you take stocks up two, three or four points in a session, or even 10 points over a multiple days.

(Classic that when B&D went up $5 last week, it was from institutions furiously trying to build positions and shorts trying to cover. Not enough stock to go around, like Whirlpool.)

We saw these patterns with a lot of stocks during 1999 and 2000: tech stocks. They were heavily shorted and there was no supply. But before you make the analogy to them, let's remember that the supply did come out, in the form of secondaries. IPOs were artificially limited to get the stocks higher, and the earnings weren't there to generate enough cash to sop up the supply.

Now, I'm not even talking about the private-equity put that keeps a bid underneath stocks. Nor am I talking about the incredible merger movement, one that I think will accelerate as the dollar gets weaker. I also am not including the possibility that the Fed recognizes the weakness in America and flushes cash into the market through lower interest rates.

I am not addressing companies that want to create value by breaking up because they can't take the heat: Alcoa(AA Quote - Cramer on AA - Stock Picks), Temple-Inland(TIN Quote - Cramer on TIN - Stock Picks) and American Standard(ASD Quote - Cramer on ASD - Stock Picks), to name a few.

Nor am I thinking about the activist hedge funds that force unlocked value on companies such as Time Warner(TWX Quote - Cramer on TWX - Stock Picks), MedImmune(MEDI Quote - Cramer on MEDI - Stock Picks) and the aforementioned Temple-Inland.

Of course, all of these are driving this excellent market. The important thing to remember is that this is the first quarter we have had this combination.

When I came up with my aggressive target of 14,500 for the Dow at the end of 2006, I didn't even include a lot of these amazing factors. I now begin to believe that I am being too conservative, but I will stick with it anyway given, distinctly happy if we beat it.

Random musings: Is Halliburton(HAL Quote - Cramer on HAL - Stock Picks) going to be Baker Hughes(BHI Quote - Cramer on BHI - Stock Picks) -- the old analogue -- or BJ Services(BJS Quote - Cramer on BJS - Stock Picks), the new one, which is just a pure play on Halliburton's worst division. We do have 100 million-plus shares short and reduced expectations. The company has yet to buy back a share of its stock from the KBR(KBR Quote - Cramer on KBR - Stock Picks) deal. But we also have a management that has been totally incapable of bringing out any value to speak of. ... I read Black & Decker's power tool strength as being positive for Sears(SHLD Quote - Cramer on SHLD - Stock Picks). Remember, it was that division that kept things back, not apparel. I know Sears makes Kenmore, which is really Whirlpool, and Whirlpool made it clear that it wasn't doing well domestically, but I remain convinced that Sears will do much better than Target(TGT Quote - Cramer on TGT - Stock Picks), Home Depot(HD Quote - Cramer on HD - Stock Picks) or Lowe's(LOW Quote - Cramer on LOW - Stock Picks). ... I think the Limited(LTD Quote - Cramer on LTD - Stock Picks) breakup story is real and you will see $31-$32. ... Corning(GLW Quote - Cramer on GLW - Stock Picks) is Level 3(LVLT Quote - Cramer on LVLT - Stock Picks) as I have said earlier. ... How maddeningly inconsistent is Panera(PNRA Quote - Cramer on PNRA - Stock Picks)? It's worse than 3M(MMM Quote - Cramer on MMM - Stock Picks). ... These health maintenance companies, like WellPoint(WLP Quote - Cramer on WLP - Stock Picks), have become toxic again, as opposed to the Medcos(MHS Quote - Cramer on MHS - Stock Picks) of the world. ... U.S. beer for Anheuser-Busch(BUD Quote - Cramer on BUD - Stock Picks) looks like U.S. sodas for Coke(KO Quote - Cramer on KO - Stock Picks) and Pepsi(PEP Quote - Cramer on PEP - Stock Picks). ... Could Tellabs(TLAB Quote - Cramer on TLAB - Stock Picks) be in talks with Alcatel-Lucent(ALU Quote - Cramer on ALU - Stock Picks)? What else would explain those increases? ... How easy was that darned VF Corp.(VFC Quote - Cramer on VFC - Stock Picks)? I think Allergan(AGN Quote - Cramer on AGN - Stock Picks), which reports on May 3, is the next big upside beat in health care. ... Transocean(RIG Quote - Cramer on RIG - Stock Picks) remains the cheapest driller, even up here. ... Caterpillar(CAT Quote - Cramer on CAT - Stock Picks) is resting before the next big move. ... Moody's(MCO Quote - Cramer on MCO - Stock Picks) is fine. I would buy it.

At the time of publication, Cramer was long Halliburton, Sears Holdings, Transocean and Caterpillar.

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Stick With 'What Works' Shopping List

Originally published on 4/26/2007 at 10:37 a.m.

Stick with the themes. Don't drift.

Capital goods aren't done. This was their first good quarter of rest-of-world activity. I'm thinking:

• Caterpillar(CAT Quote - Cramer on CAT - Stock Picks)
• Paccar(PCAR Quote - Cramer on PCAR - Stock Picks)
• Cummins(CMI Quote - Cramer on CMI - Stock Picks)
• Terex(TEX Quote - Cramer on TEX - Stock Picks)
• United Tech(UTX Quote - Cramer on UTX - Stock Picks)

Health care works, on a recognition that a weak dollar and cost cuts are producing blowout numbers: Merck(MRK Quote - Cramer on MRK - Stock Picks), Schering-Plough(SGP Quote - Cramer on SGP - Stock Picks), Zimmer(ZMH Quote - Cramer on ZMH - Stock Picks), Allergan(AGN Quote - Cramer on AGN - Stock Picks).

Oil drillers are so right, as long as they are far from here: Schlumberger(SLB Quote - Cramer on SLB - Stock Picks), GlobalSantaFe(GSF Quote - Cramer on GSF - Stock Picks), Transocean(RIG Quote - Cramer on RIG - Stock Picks). Some oils work: ConocoPhillips(COP Quote - Cramer on COP - Stock Picks) is cheap, and I'd take Exxon(XOM Quote - Cramer on XOM - Stock Picks) on a pullback.

Telecom works: AT&T(T Quote - Cramer on T - Stock Picks) and Verizon(VZ Quote - Cramer on VZ - Stock Picks).

And materials work: Freeport-McMoRan(FCX Quote - Cramer on FCX - Stock Picks), BHP Billiton(BHP Quote - Cramer on BHP - Stock Picks), Lundin Mining(LMC Quote - Cramer on LMC - Stock Picks), Alcoa(AA Quote - Cramer on AA - Stock Picks).

Ag works: Deere(DE Quote - Cramer on DE - Stock Picks), Monsanto(MON Quote - Cramer on MON - Stock Picks), DuPont(DD Quote - Cramer on DD - Stock Picks), Mosaic(MOS Quote - Cramer on MOS - Stock Picks).

International brokers work: Goldman Sachs(GS Quote - Cramer on GS - Stock Picks), Lehman(LEH Quote - Cramer on LEH - Stock Picks) and Bear(BSC Quote - Cramer on BSC - Stock Picks) are my faves.

Household products work: Pepsi(PEP Quote - Cramer on PEP - Stock Picks), Coke(KO Quote - Cramer on KO - Stock Picks), Clorox(CLX Quote - Cramer on CLX - Stock Picks).

Beyond that, I wish I didn't have to say this, but I think you are on your own.

At the time of publication, Cramer was long Caterpillar, Transocean, Freeport-McMoRan, Goldman Sachs and Clorox.

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Shoot for the Long Term With Defense

Originally published on 4/27/2007 at 11:31 a.m.

Here go the defense stocks again, with Lockheed Martin(LMT Quote - Cramer on LMT - Stock Picks) rallying nicely. These companies seem to trade in a very strange pattern: They deliver great numbers, raise guidance and then start retreating when everyone thinks the numbers can't be sustained and the Democrats will bust up the party.

They are just like the drug stocks!

But in some ways, they're better. You should go listen to the LM call. Not only are the earnings consistent but the programs are so long-term that anyone who is concerned about a Democratic slowdown is just wildly off base.

Plus, the headline risk -- Lockheed Martin has taken endless heat for one program, the Littoral Combat Ship program -- that you would think it was in the penalty box with Washington. Totally untrue. LM has 3,000 programs, and this is the only one that has been hit with really bad publicity.

To me, LM and General Dynamics(GD Quote - Cramer on GD - Stock Picks) and L-3(LLL Quote - Cramer on LLL - Stock Picks) and Northrop Grumman(NOC Quote - Cramer on NOC - Stock Picks) should be bought. They haven't kept up, they are all doing well and I think they will continue to do well for several years hence.

Random musings: Speaking of being late to the party, if you still want to play something Cummins(CMI Quote - Cramer on CMI - Stock Picks)-like, I'd go for Parker Hannifin(PH Quote - Cramer on PH - Stock Picks), which is just now playing ketchup!

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.