Jim Cramer's Best Blogs
Jim Cramer fills his blog on
RealMoney
every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- the stocks to buy on rising oil;
- the wrong way to do a buyback; and
- a great plan to rescue Citigroup.
Click here for information on
RealMoney.com
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
What to Buy When Oil's Up
Originally published on Oct. 15 at 12:32 p.m. EDT
Raising numbers
Core Labs
(CLB) - Get Report
! Raising numbers
Schlumberger
(SLB) - Get Report
! Raising numbers
Conoco
(COP) - Get Report
!
That's what happens every time oil goes up. It is all a given. Some of these stocks, like
the oil technology stocks I told you about last week, get to leap 3, 4, 5 points in a bound because this environment is so bullish for them.
It must be so annoying to people who are not in the oils to see this endless action. But it is exactly what is driving so much of this market because you can also take up infrastructure, agriculture, minerals and solar on the lift in oil's price.
If you go listen to the
Shaw
( SGR) earnings conference call, you will hear that most of the big-margined business Shaw is picking up is all
alternative
energy -- typically nuclear.
Foster Wheeler
(FWLT)
and
McDermott
(MDR) - Get Report
will get the alternative coal contracts, particularly when Congress gets its act together and declares CO2 levels that are acceptable.
Over in ag, you can only imagine how much more needs to be planted. Go listen to last week's
Mosaic
(MOS) - Get Report
call -- that stock was up huge -- and you can see that company is
doubly
levered, to both uranium and fertilizer -- for more plantings for renewable fuel but also for food. (You can get a sense from that call how short we are of all sorts of foodstuffs.)
Minerals as a sector works because oil is also a proxy for worldwide growth in minerals. If oil sells at $85 and there is no cessation of demand, then the thinking is there will be no cessation of demand for any other raw good, particularly for copper. Gold goes up, too, as a hedge against the obvious inflation that oil causes. (Maybe it is wrong that it does that, but it does happen.)
Finally, solar is a must-buy off of this, obviously, and there you are talking about the
First Solar
(FSLR) - Get Report
/
Sunpower
(SPWR) - Get Report
complex, which is just on fire.
All of these stocks work. And because the only businesses that seem to be hurt by oil are pure consumer -- retailers and restaurants, and even then if you have a restaurant with global exposure you aren't hurt, think
McDonald's
(MCD) - Get Report
and
Yum! Brands
(YUM) - Get Report
-- it is actually a
win
for the market because there are many companies that also are adjusting to permanent high prices of oil and profiting from it. (Go listen to the
GE
(GE) - Get Report
call if you don't understand this.)
So when you see oil up, the market will smile. But if you aren't in the Core Labs and the
FMC Techs
(FMC) - Get Report
and the
Bunges
(BG) - Get Report
you will kick yourself
all the way
to $100 a barrel oil!
Random musings
: I am sticking by my prediction that
Citigroup
(C) - Get Report
CEO Chuck Prince will be out imminently because of pressure from the board of directors. This is very
Morgan Stanley
(MS) - Get Report
now, where Phil Purcell had "everyone" behind him and in reality had almost
no one
behind him.
At the time of publication, Cramer was long ConocoPhillips and Citigroup. General Electric owns CNBC, for which Cramer is a featured commentator.
NYT, MTG Show How Not to Do Buybacks
Originally published on Oct. 17 at 10:29 a.m. EDT
Buybacks can be a killer. That's what we are seeing with
New York Times
(NYT) - Get Report
and
MGIC
(MTG) - Get Report
.
This morning, a huge NYT block of 10 million shares -- the same amount that was owned by activist investor
Morgan Stanley
(MS) - Get Report
, traded. The New York Times bought back almost 10 million shares in the last four years at prices that were much higher. NYT's management bought high and couldn't buy low.
MGIC, the mortgage insurer, did the same thing. It bought back 18 million shares in the last four years. Holy cow!
Here it as $27 and I am thinking this one could go much lower
because it needs capital
. Think of it as
Montpelier Re
(MRH)
after Katrina; it needs to
issue
shares. MGIC would be buying high and selling low if it did, but I can't think of how it can pay off these loans without more capital.
These are two sides of the same coin: managements that simply didn't see the big secular winds against them.
They are totally and unequivocally in the "
sell block."
I'll stop short of saying they are pathetic because -- oh heck, they are pathetic.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
The Blueprint for Saving C
Originally published on Oct. 17 at 11:35 a.m. EDT
Enough negativity. Let me give you the blueprint of what has to happen at
Citigroup
(C) - Get Report
in order to save the situation.
First, Chuck Prince must resign.
Second, the board of directors has to choose either Bob Steele from Treasury or perhaps Ronald Logue from
State Street
(STT) - Get Report
to run the place. Both understand what's really going on out there and are realists, not dreamers.
Third, they have to unwind
every single
initiative that Prince has done. They should sell Bisys -- just closed! -- because prime brokerage business is going down the tubes with the shrinking of the hedge fund industry.
They have to reverse the ridiculous move into the worst market, the least-growth market in the world, Japan, with Nikko Cordial.
Finally, they have to close the stupid hedge fund department. The idea that they promoted Vikram Pandit
after he blew up and missed the mortgage market
-- he
headed
the hedge fund group -- is catastrophic.
With the money that they would get from these divestitures, they should begin to buy back stock aggressively as they shore up capital.
The bank's a joke. The board, captured by a Prince and a king -- Bob Rubin -- is now a joke.
But at least they now have my (constructive) blueprint.
Random musings
: I would buy both
United Tech
undefined
on earnings -- they were
good
, for heaven's sake! -- and
ValueClick
(VCLK)
on takeover. ... What is with
Kellwood
( KWD) rejecting that bid?
At the time of publication, was long Citigroup.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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