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:

• defense stocks and the election,
• owning Lehman, and
• whether the sky is, in fact, falling.

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How to Play Defense Stocks Into the Election

Originally published on Wednesday, June 4, at 7:04 p.m.

We've had some interesting pullbacks of late that are really worth highlighting. The defense stocks in particular -- not just because I just got off the USS Harry S Truman, a nuclear carrier -- seem ripe for the buying. We have seen a tremendous hammering in this group as if, somehow, the anointing of Obama means the winning of Obama and then somehow the vivisection of the Defense Department's budget.

It's simplistic thinking. I believe that the stocks, as they go down, are excellent buys on cash flow and on a chance that the single most pro-defense presidential candidate since Scoop Jackson ran in the 1970s could be elected.

This is one of those compelling risk/reward situations where you could find yourself picking up some Raytheon(RTN Quote), Northrop Grumman(NOC Quote) or General Dynamics(GD Quote) (Lockheed Martin(LMT Quote) refuses to come in so is now my least favorite) and you can win either way. I think Obama has to tack extremely right to win, and the easiest way to do that is simply to call for a strong defense and ram it home by visiting defense plants and talking about the need for non-Iraqi strong defense elements.

The propensity is to want to sell GD off, that as it is the most linked to Iraq with the exception of Alliant. But why not split the difference? I have been buying Raytheon ,and I think Northrop Grumman is terrific and in some ways L-3 Communications(LLL Quote) might be best because it is the Democrats' defense company, with all of the homeland security counterterrorism plays.