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:
- hot coal stocks
- drilling stocks' long legs
- the truth about tech
- why selling has lost its appeal and
- why Microsoft overpaid for aQuantive
Coal's About to Catch Fire
Originally published on 5/14/2007 at 11 a.m. Are the coal stocks enjoying a renaissance because our government actually supports coal? This morning we see the lead story in the Washington Post, "Federal Loans for Coal Plants Clash With Carbon Cuts." Sure enough, a Depression-era program is using taxpayer money, the Post reports, to build coal plants even as Congress tries to cut back on greenhouse gases. When you toss in what we heard last week from McDermott(MDR Quote) and Foster Wheeler(FWLT Quote) about the tremendous build of coal plants worldwide, you get a sense that this is really where the action is. I like Arch Coal(ACI Quote) and Peabody(BTU Quote), the two winners in any surge of coal. I am not alone in thinking about this revaluation. JPMorgan put out a piece last Friday, May 11 saying there is a reallocation from winners to so-called losers, of which coal had conspicuously been one. JPMorgan likes coal plays but doesn't want to go nuts because there aren't enough catalysts or consolidation. I think consolidation's coming. I think the prices of coal and therefore the stocks are going higher. It's not too late to buy these. Random musings: Telling reversal of what happened at the opening. Old pattern that I thought we had gotten rid of. Never a good sign. ... You want to know how to play Chrysler(DCX Quote)? Go buy Toyota(TM Quote). You know Chrysler, like Ford(F Quote) and GM(GM Quote), is shrinking. ... Congratulations to Steve Smith! He writes the fantastic Options Alerts service. As of April 30, the Options Alerts model portfolio had returned 25.79% year to date vs. the S&P 500's 4.52% in the same period. I'm always looking for options strategies that work, and this hot hand holds them. Click here to sign up for a free trial today. At the time of publication, Cramer was long Toyota Motor.Drilling Stocks' Legs Get Longer
Originally published on 5/15/2007 at 1:46 p.m. Geopolitics and reality are driving these drilling stocks relentlessly higher. So many analysts have said that this move isn't sustainable, day rates can't climb or natural gas drilling will remain in a permanent bear market that now, when the stocks won't quit, people are at last talking about the secular growth story instead of the inevitable boom-bust one. Of course, as soon as you say secular growth about a group that has been cyclical, you tempt fate and raise a lot of hackles. But the fact remains that finding oil's become so difficult that you need the help of the major deepwater drillers -- GlobalSantaFe(GSF Quote) and Transocean(RIG Quote) -- along with the service companies -- Baker Hughes(BHI Quote) and Schlumberger(SLB Quote) -- to find and bring the oil to the market. Now we're layering on a spike in nat gas and, I believe, soon a concomitant spike in nat gas drilling that will ignite the Halliburtons(HAL Quote) of the world. I think we are seeing that with Diamond Offshore(DO Quote) today with the strength off the Credit Suisse upgrade. This is an odd time for the group. So many analysts have gone negative that there's really no strong champions. You know what that means: This group has legs. Big legs. At the time of publication, Cramer was long Transocean and Halliburton.The Truth About Tech
Originally published on 5/16/2007 at 1:54 p.m. The truth is coming out about tech: It stinks out there. For weeks on end, we have had to put up with the notion that the semiconductor-equipment companies were doing fabulously, even though the end markets were awful. Then, we got the truth from Applied Materials (AMAT Quote). It was like a reality check that no one expected because the analysts have been recommending this stock left and right, even as recently as this week. To make an analogy to this silliness, these upgrades and praises were happening in a way that would be as if the auto-parts makers were doing great while the auto companies were cutting back, or if the aerospace suppliers were on fire while Boeing's (BA Quote) orders were plummeting. The analysts in this segment could not resist getting behind a stock that they saw going up every day. This was the worst kind of non-rigorous thinking. Painful, costly and stupid. There will come a time when tech is right -- probably three months from now. Until then, they -- and you -- should sit on your hands with the exception of Hewlett-Packard (HPQ Quote), Cisco (CSCO Quote) and maybe Apple (AAPL Quote) now that it has run so much.Why Selling Has Lost Its Appeal
Originally published on 5/17/2007 at 12:10 p.m. Why aren't we down today? Let me take a stab at it: the bid for Acxiom(ACXM Quote) and the bid for Alliance Data(ADS Quote). These are two so-so companies that have been kicking around for a while with no real mission other than processing things. Database management. Credit card services. Loyalty and marketing services. All of that amorphous stuff that feels like First Data(FDC Quote). You might have owned these stocks if you liked that industry. It's like owning Automatic Data(ADP Quote) or DST(DST Quote). Boring; fairly consistent. They might as well be dozens of other companies, everything from Fair Isaac(FIC Quote) to Fiserv(FISV Quote). Unexceptional stock wallpaper. To be, sure they had their champions. But my point is that these are basically humdrum, not-really-interesting stocks that just got very big bids -- the kinds of bids that, if you sell a lot of other companies, you run the risk of looking stupid when they too get bids. These bids make it so you can't resist owning and buying. They have changed the risk/reward for owning hundreds upon hundreds of stocks, That's why, in the end, we are up today. It just doesn't make any sense to sell! At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.Microsoft Overpaid Because It Had To
Originally published on 5/18/2007 at 1:40 p.m. Sure, the aQuantive(AQNT Quote) deal is nutty. Sure, it's an overpay. Sure, it makes Microsoft(MSFT Quote) look stupid. But Microsoft needed to do something. It needed to shut everyone else out. What we don't know is how much anyone else was willing to pay. And we don't know how desperate Microsoft is to leapfrog on the Web, where it seems to fall behind by the day. What's baffling, of course, is that aQuantive is a company that was just a simple roll-up of cats and dogs that no one wanted for a very long time. I can actually remember chatting with these companies when I started TheStreet.com and marveling how overvalued they were originally. Then they went to nothing. Then they went to $6 billion. (I think Anthony Noto at Goldman is right, that now Microsoft can buy Yahoo!(YHOO Quote) and own it all except for Google(GOOG Quote)! If it can pay $6 billion for aQuantive, it will pay $50 billion for Yahoo!.) I would love to tell you this is all nuts, but this ad space has gotten so unbelievably hot that I bet there was someone willing to pay $4 billion or $5 billion out there. And Microsoft had cash. | ||
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Do you agree with Jim Cramer that Microsoft needs aQuantive badly enough to justify overpaying for it? Answer Here |
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