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"Not all news is surprising," Jim Cramer told viewers of his "Mad Money" TV show Friday.
He said that when analyzing why the market only dropped 143 points after such a horrible unemployment number, he concluded that the market simply saw this bad number coming, and that the bad news was already baked into the Dow.
"We've finally reached the moment where everyone is convinced that everything bad is already priced into the market," said Cramer.
Why did stocks like
, both of which reported horrible quarters, only fall slightly before rebounding? Cramer said it's because Alcoa was already down 65% from its highs, and Intel was already down 38%.
Cramer continued to say that while much of the bad news is now behind us, that does not mean that there's good news ahead.
He predicted the markets will likely be range-bound as the recession unfolds. "Don't expect much from the market when the economy does nothing more, or nothing less, than what's expected," he said.
Cramer: Forget Jobs Data -- It's a Technical Market
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Going Back to School
Is there a company that actually makes money when more people lose their jobs?
Cramer said there is, and that company is
American Public Education
, which he highlighted for his "Speculation Friday" segment.
American Public Education owns and operates both American Military University and American Public University, two primarily online schools offering substantially reduced tuitions to its students. Tuition for undergrads is typically 60% lower than traditional state schools and 90% lower for graduate programs.
Cramer said the research is clear, for every 1% increase in unemployment there's a 2% uptick in enrollment at colleges and universities as people go back to school in larger numbers to learn new skills and make themselves more marketable to employers.
Cramer said American Public Education is unique in the fact that 60% of its students are in the military and that it's a well-funded organization committed to bettering its personnel. And since American Public's classes are online, they're often perfect for the hectic schedules of military participants.
With estimates predicting 41% revenue growth in 2009, Cramer said investors will be hard pressed to find that kind of growth anywhere else in the market.
American Public Education recently issued a secondary offering of stock at $37.50 a share. Cramer urged investors to be patient, and let the stock come to them. He said $37 a share would be the price to pull the trigger.
Once Hated, Now Loved
In a surprising change of heart, Cramer added home improvement retailer
to his list of the "Top 5 Dow Stocks For 2009."
Home Depot joins
Johnson & Johnson
, which were featured earlier in the week.
Cramer said Home Depot is a play on the coming housing bottom, which he still predicts is only 171 days away. He said the combination of historically low interest rates with a federal government now pulling out all the stops to help people buy and save their homes with be a boon for Home Depot.
"People will be buying homes and fixing them up," said Cramer, who admittedly still likes competitor
, but noted that since Lowes was not a Dow stock, it couldn't be added to his favorite Dow stock list.
In addition to the macro-economic forces pulling in Home Depot's favor, Cramer likes the internal changes at the company now that former CEO Bob Nardelli has resigned. He said the company is getting better with both its pricing and inventory management. Cramer also likes Home Depot for its juicy 3.8% dividend yield.
In this segment, Cramer told a viewer that he thinks
is a terrific stock to own here.
When asked about owning
, Cramer told a second viewer "I think you're in excellent shape with that stock."
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
Chipotle Mexican Grille
Pre-Paid Legal Services
AK Steel Holding
Check out the latest edition of
"Cramer's Take onTop-Searched Stocks" on Stockpickr.
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At the time of publication, Cramer was long Quanta Services.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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