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"What we have today is just some serious profit taking," Jim Cramer told viewers on a special, midday edition of his "Mad Money" TV show Monday.
He described today's market action as simply giving up some gains, nothing major.
Cramer explained that while the market mulls over the repercussions of a government takeover of
( FRE) and
( FNM), he cares more about the true underpinnings of the market, mainly the price of oil and natural gas.
Cramer discussed that topic with Jim Hackett, CEO of
to find out just how big an impact the declining cost of natural gas is having on his company.
Hackett said there will be continued strong demand for natural gas until a viable alternative fuel comes into fruition. He described the decline in his company's stock as normal market volatility and felt it was nothing to be concerned about longer term.
Cramer: Buy the Right Infrastructure Stocks
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Asked about rising raw costs, Hackett confirmed that costs are indeed up 50% since the beginning of the year, but said that his company has minimized those effects by hedging and what he called "smart drilling."
In fact, he noted, the effect to Anadarko's bottom line has been on the order of just 5% to 7%.
Cramer and Hackett agreed that the price of many oil and natural gas stocks are trading at a big discount to the price of the commodity itself. Cramer reiterated his buy on Anadarko and the sector as a whole.
Outrage of the Day
In this segment, Cramer cautioned viewers not to take their eyes off what's important in the market. While the media may be focused on Iran, the disturbing events in Georgia and the looming tropical storm in the Gulf of Mexico, Cramer said it's the supply and demand of oil that's controls the market.
In the past, said Cramer, any one of the aforementioned media events would have instantly taken oil to $150 a barrel. Yet today, oil remains at $110 a barrel and is likely to fall even further, he said. This only confirms that supply and demand rules the day and at $4.50 a gallon, the demand for oil and gas just isn't there.
Cramer cautioned investors to scale out of the oil stocks that are directly affected by the decline in oil prices. They include companies such as
( XTO) and
He said while it may be tempting to buy into these names ahead of the media events, the market is indicating there is more pain to come.
The Magical Kingdom's Formula
In the "Executive Decision" segment, Cramer talked with Bob Iger, president and CEO of
about the effects of a slowing economy on his company's business.
Iger said that Walt Disney should not be viewed as a media company, since only 20% of the company's revenues come from advertising. He said that Disney has made an intentional decision to continually lower that number as the company diversifies its assets. "We are in the media business, but that's not what we're all about," he said.
Iger said that Disney is in the business of creating and building great, long-term brands that can be leveraged around the globe. Disney, he said, is the No. 1 brand in its space because of the high quality experience it offers.
Iger said company fares well in tough economic times because the company's business is not as cyclical as many analysts believe. He said that Disney offers a great, affordable product and flourishes from its global reach.
Cramer told viewers to consider nibbling at some of the beaten-down bank stocks. He suggested looking into
, both of which recently reported better-than- expected numbers.
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At the time of publication, Cramer was not long on any stock.
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