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 commodity beating,
• the next bull markets, and
• the facts about the banks.

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The Herd Is Trampling the Commodity Names

Originally published on Monday, Aug. 4, at 11:18 a.m. EDT

No hope for any commodity plays. That's what people must be thinking. That's what you do when you sell down stocks like Deere (DE Quote) and Freeport (FCX Quote) even after they have been clocked. The thinking is that with the commodity collapse comes drastic cuts in numbers, so the 12 and 7 P/E's for next year aren't realistic at all.

I always come back and say that these are companies that have fundamental international worth, perhaps more worth then their $28 billion and $33 billion valuations, respectively.

I also want to emphasize that these are moving targets. At this point, people are fleeing these because they fear valuations that might be three-quarters of what they are now, as you don't sell down 3 or 5 if you think that the stocks are only going down by one-eighth.

I bring up this analysis because these are companies that traded so much higher, that have so much worldwide earnings power and scarcity value and worth to others, that I simply don't believe they can be crushed like banks from here.

Now, it is possible in a recession that FCX's earnings can get cut, maybe by a quarter, although a half seems like a stretch, and from here I think you are betting on a 50% earnings cut. Deere's harder. Not really linked to the economy, but to worldwide demand for better food and for renewable energy. But, again, I can see a 25% reduction in earnings. More than that seems hard.