Cramer: Worst-Case Dow View

Kraft(KFT): This is the worst-run food company in the Dow. The second worst, Heinz, trades at 10 times earnings, and this one has a Buffett discount too, and I don't know about dividend coverage. Give it a Heinz multiple, and you get $18. Seems right.

3M(MMM) has been crushed here, but in a worldwide recession it won't stop at $40, and the strong dollar is a huge headwind. Estimates are 10% too high in a best-case scenario, and that means, steady multiple, $35.

McDonald's(MCD): A strong dollar could cut estimates, as could a decline in traffic in Europe, where MCD has a big franchise, Still, it's a solid company and a good bet, so I will call it no lower than $45, as dividend protection and great management could cushion any decline. I want to buy this one, too, when it gets to $50, as you have to start somewhere, and the idea of it going to $45 implies a garden-variety worldwide depression.

Merck(MRK) has patent issues, and the new Supreme Court decision makes its products, particularly its vaccines, a free-fire zone. Also, this is the company that could be one of the most hurt by Obama's pitting of drug companies against each other to get a great price for the government. Chop a multiple point off it and cut earnings by a quarter, and let's call it $15.

Microsoft(MSFT): Another one with the estimates too high and the dividend too low. $12-$13 gives it dividend parity to Intel, but it has a less cyclical earnings stream, so I don't think it has too much downside here. $13 is the high end -- let's take that.

Pfizer(PFE): A disaster with a dividend that is too high once again and a merger that will put a lid on the stock for the foreseeable future. Don't forget huge, huge patent expiration problems and a government that's gunning for it. I think this one's going to $8 as the estimates and the dividend are too high, the latter even after the cut!

Procter & Gamble: Earnings estimates are too high, and dividend protection is slim, and the strong dollar will hurt here, hurt badly. At $36 it is more like Coca-Cola, a good compare, so I bet it gets there, and that's not nearly the haircut that it deserves in this environment. Still a PG premium.

United Technologies(UTX): The dollar is killing this company, and we believe that there is a good chance of a 10% cut in estimates, or $31, which gives it about a 5% yield. I think it would be a stretch to go down there, given its steady businesses, but aerospace and elevators could hurt them.

Verizon's(VZ) estimates are probably good, and the dividend is safe and should go higher this year, but at the same time it could return back to $23, the October low, in a hard selloff.

Wal-Mart(WMT) just boosted the dividend, it delivered an excellent quarter, and I truly believe that we might have seen the low of the year at $46. We tend to revisit the lows in this market, although IBM reported better and it didn't. But 3 points isn't much of a decline, so I like it just to that level.

Remember, this is the bearish view, no worldwide pickup or continued decline, no kick-in of stimulus, no change in the Obama plan. That's how you get to these levels. Put simply, they are not unrealistic, although it is unlikely to think they all get to these lows at once, as they didn't in October or November. So consider this the worst case, and be ready if it happens.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting

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