He said that the sky is not falling because of rising commodity prices, and smart investors can profit from them.Cramer said the moves in commodities are of self-correcting and not signs of rampant inflation. He said when grain prices soar due to weather and drought, the following year farmers buy more equipment, plant more crops and produce as much as they can to take advantage of higher prices. When oil prices are high, oil companies explore more, drill more and build more infrastructure to do the same. Even in the supermarket, Cramer said consumers will trade down to private-label brands when prices get too high. In fact, Cramer said rising commodity costs are what investors should be hoping for, as they signal a strong and growing economy. Only wage inflation and housing inflation is really bad, he said, and fortunately we have neither. That means that now is the time to buy those who benefit from high commodity prices, companies like Nucor (NUE), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, along with Union Pacific (UNP), Freeport-McMoRan (FCX) or Vale (VALE). Cramer also recommended companies that have been cutting costs, like Stanley Black & Decker (SWK), and those expanding internationally, like Eaton (ETN). Cramer also likes companies that can pass high costs to consumers, such as Polo-Ralph Lauren (RL) or those like Chipotle Mexican Grill (CMG) and Apple (AAPL), another Action Alerts PLUS name, which don't seem to be affected by commodities at all.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV