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"When it comes to investments, Brazil makes the U.S. look like wimps," Jim Cramer told viewers of his "Mad Money" TV show Thursday.
He wondered why investors would want to invest in U.S. stocks, with all their recession fears and economic issues, when they could in Brazil instead?
According to Cramer, the Brazilian economy has a lot going for it. "Brazil is a country in charge of it's own destiny," he said.
Cramer noted the Brazilian currency, the Real, is one of only a few currencies that's appreciating in value. Even billionaire investor Warren Buffet is long the Real, he noted. Cramer also touted Brazil for its energy independence and abundance of natural resources.
On Feb. 5, Cramer recommended four Brazilian stocks. Since then, those stocks are up an average of 11%, while the S&P500 was down 1.2% during the same time period. This has sparked Cramer to revisit the Brazil and recommend mining giant
Vale is largest producer of iron ore and the second largest producer of both nickel and coal. "These are all resources that are in high demand," said Cramer.
Cramer said Vale looks attractive for investors after its failed attempt to acquire the European mining company Xtrada. "It doesn't look like Vale is going to pay up for Xtrada, and that means they're smart," he said. But he also noted that once the arbitrage pressures are relieved, Vale's stock will be a coiled spring headed higher.
Using estimates from Goldman Sachs, Cramer sees Vale hitting $57 a share.
"In this market, nothing is more important than safety," Cramer told viewers. That's why he recommended
(DOW - Get Report)
as a high-quality, high-yielding stock for consideration.
Cramer said Dow has what investors need: a great dividend that is yielding 4.5%. The company also has a long history of paying that dividend and raising it, something the company has done 47 times in the past 95 years, Cramer noted. "This is not a fly-by-night operation," he said.
Cramer likes Dow for the way it is reinventing itself as a non-cyclical stock. "Typically, you wouldn't consider a chemical company at this point in the cycle," but Dow is not a typical chemical company, he said.
Cramer pointed out two recent partnerships to support his point. First, Dow entered into a joint venture with Kuwait on Dec. 13 to help lower the company's cost for oil and natural gas. Since that announcement, Cramer noted, Dow's stock has fallen.
Cramer also pointed out Dow's recent partnership with agriculture favorite
(MON - Get Report)
to create new hybrid corn seeds. "As Dow becomes less of a chemical stock and more of an agriculture play, it gets more and more attractive," he said.
Much of the downside is already priced into the stock, said Cramer, but none of the upside is yet. "Things are tough for Dow, but the company is responding."
Scale Out of Nokia
In the "Sell Block" segment, Cramer recommended investors begin selling
(NOK - Get Report)
into any strength.
According to Cramer, the time to sell Nokia is now, due in part to the
conference call Monday. On that call, Texas Instruments lowered its guidance, citing slower orders from a "large wireless customer." Cramer believes that customer to be Nokia.
Cramer also sees problems on the horizon for Nokia due to a looming price war with the faltering
and increased competition from
(AAPL - Get Report)
The sell call was especially painful for Cramer, who's been a fan of the company since April, 2005. Since first recommending it, Nokia is up 100%, and is up 14% since July 2007.
Although Nokia is the "best of the breed," he said, "you have to sell it in the face of lower demand and increased competition."