Jim Cramer's Portfolios of the Week
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By Roberto Pedone
PEWAUKKE, Wis. (
) --According to Jim Cramer,
housing stocks are the key to this market.
Cramer pointed out that the charts of the housing stocks are showing that the group is the weakest area in the markets. Why is this happening? One potential explanation could be that housing stocks are tracking employment and news flow, and both are very bearish. Another reason could be the $8,000 first-time home tax credit, which has yet to be renewed.
Cramer doesn't think the tax credit is as important as the historically low mortgage rates. However, he said the key to the housing bottom is for homebuilders to combine or falter. Right now Cramer thinks the latter is occurring.
What's even more important for investors to know is that the last move up in the markets was led by the housing stocks, or the PHLX Housing Sector index. Cramer said that if this index starts to go down, it could take the entire market with it. He advised investors to short or buy put options on names such as
Fortune Brands
( FO) and
Masco
(MAS) - Get Masco Corporation Report
, because these stocks have moved too much.
Recently, Cramer found opportunity in Chinese growth stocks, stocks for the next 59 days and real estate investment trusts that must be sold. Here are some Cramer highlights from over the past week as aggregated from his "Mad Money" TV show, the "Stop Trading!" segment on
CNBC
TheStreet Recommends
and his
RealMoney
blog posts (these blog post require a
RealMoney
subscription).
Cramer's Stocks for the Next 59 Days
: Cramer sees opportunity in a number of stocks that professional money managers could rush into before the year ends. In an
Oct. 6 blog post
, he wrote: "Believe me there is nothing worse than being on the short side of the market when you only have 59 more days to generate performance." The
Cramer's Stocks for the Next 59 Days
portfolio includes
Apple
(AAPL) - Get Apple Inc. Report
and
Salesforce.com
(CRM) - Get salesforce.com, inc. Report
.
: Cramer thinks some leading tech stocks have gone too far too fast. In an
Oct. 7 blog post
he wrote: "Frankly, I wish these stocks would cool off. That they won't is bullish, for sure, but how about a breather to let people in?!" The
portfolio includes
Research In Motion
( RIMM) and
(GOOG) - Get Alphabet Inc. Class C Report
.
Cramer's Chinese Growth Stocks
: Cramer believes there are only a few safe havens from the jobless U.S. recovery, and they're all Chinese growth stocks. On
last Thursday's "Mad Money" episode,
he said these stocks were marked down on Thursday because of US weakness, but they're China plays through and through. The
Cramer's Chinese Growth Stocks
portfolio includes
BHP Billiton
(BHP) - Get BHP Group Ltd. Report
and
Freeport-McMoRan
(FCX) - Get Freeport-McMoRan, Inc. Report
.
Cramer's High-Yielding Dividend Stocks
: Cramer continues to recommend the plain old high-yielding dividend stocks. On
he told viewers that these types of stocks offer more yield and less risk. Plus, money managers are buying into this group. The
Cramer's High-Yielding Dividend Stocks
portfolio includes
Boeing
(BA) - Get Boeing Company Report
and
Kinder Morgan Energy Partners
(KMP)
.
: Recently, Cramer warned investors that the wrong way to play commercial real estate is with the worst performing REITs. On
last Thursday's "Mad Money" episode,
he told viewers he found the worst REITs by using statistical analysis, and looking at metrics like fund performance and average rent per square foot. The
portfolio includes
Duke Realty
(DRE) - Get Duke Realty Corporation Report
and
AMB Properties
( AMB).
Cramer's Defensive Plan Stocks
: Cramer thinks investors should stick with a defensive problem to fight the market bears. In an
Oct. 2 blog post
, he wrote: "You have to stick with the program as the technicals work their way out -- we are oversold, we look to be holding our 50-day moving average, there are too many bears." The
Cramer's Defensive Plan Stocks
portfolio includes
Altria
(MO) - Get Altria Group Inc Report
and
Hewlett-Packard
.
-- Written by Roberto Pedone in Pewaukee, Wis.
(Editor's note: At the time of publication, Cramer owned Altria, for his Action Alerts PLUS charitable trust.)
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Roberto Pedone, based out of Pewaukee, Wis., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also na outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
