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Jim Cramer's Best Blogs


Watch for Opportunity
Posted at 9:40 a.m. EST, Jan. 14, 2009



The opportunities keep knocking, they just knock in strange places. The other day Associated Banc-Corp (ASBC) (a second loser out of Green Bay) priced an offering in the hole, and you made a quick buck if you blinked simply by getting in on a deal meant to appease the regulators.

Today First Midwest Bancorp (FMBI - Get Report) -- another ne'er-do-well bank, this one from Illinois -- looks to be another quick gainer.

In Getting Back to Even, I stress that this strategy of buying merchandise in the hole, even if you don't like the merchandise, is a dynamite idea, just dynamite.

It is counterintuitive to buy anything you don't care for. ASBC and FMBI, like Zions (ZION - Get Report), are banks that I am not crazy about. But when they raise equity, they go from being a bad story to being a good story. Check the REITs -- names like Federal Realty (FRT - Get Report), Brandywine (BDN - Get Report), Boston Properties (BXP - Get Report), and many of the hotel REITs -- if you don't believe me. Or the huge gains in U.S. Steel (X - Get Report) after its deal. Other than Federal Realty, I didn't care for any of these deals before the refinancing. After, though, they are terrific. The Wells (WFC - Get Report)/ Bank of America (BAC - Get Report) bank deals and all of the other secondaries all worked too, including ones like Capital One (COF - Get Report) that seemed like they shouldn't, given Obama's attack on credit cards.

In fact, only Synovus (SNV - Get Report) was a disaster.

So keep an eye on these. They keep happening. Stocks that that are bad before they sell stock and good after.

A great pattern.

Would I hold ASBC or FMBU after these deals? I like to own the well-managed ones, not the "bad" ones, so I am indifferent after the deals are done. Money is money. I like the quick profits.

At the time of publication, Cramer was long Apple and Bank of America.

Jim Cramer, co-founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio, Action Alerts PLUS. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.

Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he co-founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.

Mr. Cramer is the author of "Confessions of a Street Addict," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.

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