'RealMoney' Radio Recap: Follow the Leader

"The market's got a bad case of 'LGQ,'" or Last Good Quarter, said Jim Cramer on his "RealMoney" radio show Thursday. This happens every time at the end of a cyclical expansion when the economy starts running out of gas, he said.

Companies like Phelps Dodge (PD Quote), Caterpillar (CAT Quote) and Black & Decker (BDK Quote) have reported good quarters, but investors don't believe the good times will last, he said. "LGQ" also has been affecting natural gas stocks, oil stocks, mineral stocks and fertilizer stocks, said Cramer. Or, for example, take the homebuilders. "Is there anything they can possibly say" that would stop those stocks from going down? asked Cramer.

A leadership change is occurring, he said. Stocks of companies that are resistant to an economic downturn will do well in this stage of the cycle, he said. That means you need to look at stocks like Colgate (CL Quote), Unilever (UN Quote), Procter & Gamble (PG Quote), Kimberly-Clark (KMB Quote), Schering-Plough (SGP Quote), Wyeth (WYE Quote), GlaxoSmithKline (GSK Quote), Genzyme (GENZ Quote), Gilead Sciences (GILD Quote), Amgen (AMGN Quote), Genentech (DNA Quote), Coca-Cola (KO Quote), PepsiCo (PEP Quote), General Mills (GIS Quote) and Kellogg (K Quote). ...