This column was originally published on RealMoney on July 20 at 10:03 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.
Are we supposed to sell all of those
right now, now that the
might almost be done raising interest rates?
History's unclear. In 2000, you got outperformance from the group for at least nine months because we didn't avoid a recession.
But after that, they treaded water as the cyclicals (but not the techs) went nuts to the upside.
I believe that you have to maintain a balance. The other day I told
ActionAlerts PLUS subscribers that the cyclicals had now gone down
and that you had to switch to buying them.
My advice is to use the weakness in the staples to pick up the ones that can have upside surprises from here or ones that are restructuring. That means yes to an Altria or a drug company that is just turning around. But for the slower-growth plays, the Hersheys and the
and the Kelloggs and the
, those have to come in.
The only real staples that have earnings momentum, the only real ones that can surprise to the upside, are
. I would be buyers of all of them as they came down in this rotation.
At the time of publication, Cramer was long Altria.
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