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Despite the passage of federal bailout package, Jim Cramer told viewers of his "Mad Money" TV show that he did not trust this market.
He reminded investors to sell into any moments of strength and play defensively as the details of the bailout plan begin to play out.
Cramer then shifted his attention to
, saying its shareholders have good reason for hope after some nifty behind-the-scene moves by CEO Bob Steel.
Cramer praised Steel for working out a deal with
He admitted he was wrong when he placed Steel on his "Wall of Shame" list of the worst CEOs on Monday. He said he did so because he was disheartened by the federal government's decision to sell Wachovia's assets to
and the fact that Steel had not come forward to defend his position.
However, after today's announcement of a deal with Wells Fargo, Cramer said he had an entirely different view of Steel.
Cramer: Being Too Negative Hurts
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Cramer credited the CEO for putting his company before his own reputation and staying quiet while the Wells Fargo deal was being done. "I thought the shareholders were finished," he said, "but now there's hope." He added that Steel should be commended for not quitting and giving up on his company.
Filling the empty slot in the Wall of Shame, Cramer added Sen. Harry Reid (D., Nev.) for a comment he made Wednesday that a major insurance company was preparing for bankruptcy.
Cramer said that irresponsible comment caused the stocks of
to suffer double-digit percentage drops.
Cramer said Reid deserved to be on the Wall of Shame for adding fear to an already fearful market.
Cramer spoke with Henry Termeer, chairman and CEO of
( GENZ) to find out if the biotech stock has what it takes to be a recession-proof stock.
Since Cramer last recommended Genzyme on August 12 at $79 a share, the stock is down just 3.8% in a turbulent market. But he said he's now high on Genzyme's prospects since biotech companies often shine during recessions and should fair even better if a Democrat assumes the White House.
Termeer noted that Genzyme's strategy is different from that of most other biotechs, in that the company focuses exclusively on "orphan" drugs, or drugs for rare diseases or diseases where there are no other treatments. He said that while these markets are small, patients often start treatments and stay on them for life, creating a stable earnings for the company.
Termeer also said insurance companies are often not resistant to paying for these treatments since they work well and are often the only option available. He said that while the FDA remains a big, complex hurdle for drug approvals, Genzyme is managing the process effectively.
Cramer said he likes Genzyme for its diversification into drugs in larger markets such as cholesterol, MS and renal failure. Termeer confirmed that the company does have drugs in late stage testing in all these areas.
A New Metric
While Cramer remains bearish on the market as a whole, he's now beginning to prepare for the situation to improve. He continues to look for value in stocks that have been relentlessly beaten down by seemingly endless hedge fund redemptions. One sector that's been hit especially hard are the industrials.
Cramer said he's evaluating the industrial stocks by two simple measures: their dividend yield and how much cash they have on the balance sheet. Earlier in the week, he recommended
, a company where two-fifths of its marketcap is cash.
Tonight he recommended two other companies that he says are approaching the "value" threshold. The first on his radar screen is steelmaker
, with its 3.6% dividend yield. The company was downgraded today by an analyst at Merrill Lynch. With a share price below $30, Cramer said Nucor is solid value stock.
Cramer also recommended
, a stock which he owns for his charitable trust,
Action Alerts PLUS, as another company close to a value moniker. With a 4.4% dividend yield, Cramer said he's beginning to buy additional shares to reinforce his position for his trust.
Admittedly, Cramer said gold and steel prices continue to fall, but in the case of Freeport, the stock has fallen from a high of $127 to $44 today. With such a decline, Cramer believes the downside has to be minimal going forward.
In this segment, Cramer told a viewer that he's not recommending any insurance companies, including
Cramer told a second viewer that
is too low to sell, but with continued hedge fund selling, he's still not a buyer of the company yet.
Cramer was bullish on
He was bearish on
Las Vegas Sands
Green Mountain Coffee Roasters
Where will the Dow Jones Industrial Average stand at the end of 2008?Above 10,0009000-10,0008000-90007000-8000Below 7000
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At the time of publication, Cramer was long Freeport McMoRan.
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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