Silver, Gold Plays
In the "Off The Charts" segment, Cramer went head to head with colleague Dan Fitzpatrick over the chart of iShares Silver Trust (SLV) to see if silver is actually a better investment than gold.
According to the weekly chart, Fitzpatrick noted that the silver ETF has traded sideways for almost a year, but recently broke through its resistance levels. The ETF has also seen consistent support at its 40-week moving average, and with the charts Bollinger bands narrowing, Fitzpatrick sees the silver ETF as a coiled spring ready to head to $24 over the next year.
Turning to the fundamentals, Cramer said he agrees with the charts. Silver is probably the better play, he said, but only after September. Cramer reminded viewers that September has been the best calendar month for gold, as the Indian and Chinese wedding seasons begin. He said over the past 17 years, gold has risen on average 8% in the month of September.After September, however, Cramer said he'd swap into silver, which unlike gold, see 49% of its production used for industrial applications. "That's exactly what we want in a recovery," he said.
A Good DealIn an exclusive "Executive Decision" segment, Cramer sat down with Emanuel Chirico, chairman and CEO of Phillips-Van Heusen (PVH), a retailer that is not worried about a double-dip recession. Chirico said he's very excited about his company's acquisition of Tommy Hilfiger, a deal which has exceeded expectations. Chirico said Van-Heusen saw value in Hilfiger, and was able to acquire the company for just eight times earnings. Thanks to the Hilfiger deal, Chirico said Van-Heusen has accelerated its debt repayments, paying down $400 million in debt so far. The company will also recognize $40 million in cost savings during the second half of 2010 and into 2011 thanks to the deal. When asked about how the company was able to fare so well during the tough times, Chirico said he quickly drew down inventory levels and cut costs, but also positioned the company for the recovery and is reaping the rewards of those decisions now. Chirico said the consumer has changed in the ailing economy. He said consumers are indeed looking for more value in what they buy, but that doesn't mean they're not willing to still pay for quality. Cramer said Chirico was a money maker, and continued his buy recommendation on the Phillips-Van Heusen.
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