NEW YORK (Real Money) -- Immunity? That's what it seemed like yesterday when Caterpillar (CAT) didn't go down on those hideous November sales or when Herb Greenberg delineated the misdeeds of CEO Doug Oberhelman.
I like Caterpillar here; it is a stock that we own for Action Alerts PLUS because we think that the downside is minimal and the upside (from a pickup in orders, a restructuring or a firing of the CEO) takes the stock to the mid-$90s in a heartbeat.
The main thing you need to know about Caterpillar is the calendar. We are in "hope springs eternal" limbo. We have no Fed to wreck us, no Washington to torture us, no companies left to preannounce.
This is fertile ground to dream that 2014 could be a big up year for the earth-moving giant that will cause people who say, OK, I missed the runs in Emerson Electric (EMR), Parker-Hannifin (PH), Deere (DE), Boeing (BA), Honeywell (HON), even General Electric (GE), so I am going to buy this laggard.
They will do so because it is well behind the market, heavily shorted, and you are going to get new adherents and new themes such as the Merrill Lynch analyst who came out this morning and suggested that Caterpillar be bought on compression sales related to shale exploration and the Gulf of Mexico. In other words, the metals and mining weakness, which is still very much there (as you can tell from the price of minerals around the globe), will be offset by other lines of business.
Let me say from the outset that I don't think this kind of logic is needle-moving to the earnings; it is just needle-moving to the stock. That means the purists and the dyed-in-the-wool shorts will battle it, but it will be to no avail. In fact, I think that, if history is any guide, the big battle for Caterpillar will be how to stay long it through what I believe will be a real run-up here into the quarter, which, unless the CEO is fired and a gigantic restructuring occurs, will cause the stock to be hammered.
That's right: I am predicting that Caterpillar breaks out here despite all of the badness because it didn't go down this time on retail sales. It always goes down on retail sales. That's how the run begins.
I think that it's the next big stock to take off here (the DJIA laggard, the dog of the Dow) and the question will be, How can you lose -- you get either a turn or a new CEO?
Works until it doesn't.
Random musings: Thanks for the kudos for those who have had a sneak peak at Real Money such as James Altucher, who did a trenchant series of interviews with me that will be posted on this site shortly.
At the time of publication,, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long CAT, EMR, HON and GE.
Editor's Note: This article was originally published at 7:51 a.m. EST on Real Money on Dec. 20.