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NEW YORK (
) -- "You have to be skeptical when it comes to the press," Jim Cramer cautioned the viewers of his "Mad Money" TV show Wednesday.
He said the media has been wrong about the markets for months, and continues to be wrong everyday.
Case in point: the notion that the markets are headed lower because of weakness in China. Cramer said the media has been hammering this issue daily, despite the fact that China accounts for only 15% of the
, and almost two-thirds of that lies in the oil sector.
Cramer told viewers that China is important, but only to oil and natural gas, mining and minerals, and a handful of other names. China has nothing to do with health care, banking, retail or a good part of the rest of the economy, he said.
Where else has the media been wrong? He cited a headline in the
Wall Street Journal
that said the consumer is holding back the recovery. "But that's not true," said Cramer, who noted that
, along with
all said the back-to-school season was looking better than expected.
Another headline warned that
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, and
were also feeling the pinch. "But that's false," said Cramer, given that Home Depot raised its guidance Tuesday and is clearly outperforming Lowe's.
Cramer also called out an article saying that
was a good stock to own since the company's acceptance of food stamps is helping the bottom line. Cramer, though, put that company in the "Sell Block" last week, saying that Family Dollar is the worst stock to own in a recovery.
Still another article said that
profits were up and that it was a good stock to own. Cramer was aghast, noting that company management just
"Be skeptical," Cramer concluded.
Despite fears of a pending collapse in the commercial real estate market, the stocks of the commercial real estate trusts have been soaring higher. Cramer found out why when he spoke with Jerry Sweeney, president and CEO of
Brandywine Realty Trust
Sweeney said while commercial real estate is a challenging and capital intensive business, he's now seeing a disconnect between the headlines and the activity on the ground. He said there's a positive bias in the psychology of his tenants, a stark contrast from that of a year ago. He said as companies begin to expand again, they'll need more office space, and that's good news for Brandywine.
Sweeney also said that it's been a wonderful surprise to see the stock market trending higher, allowing companies to refinance and reposition themselves. He said what will be painful for some in commercial real estate will be an opportunity for others, as the markets revalue commercial real estate and the companies that operate in that market. He said Brandywine will continue to concentrate on strengthening its balance sheet and delivering on its earnings.
Cramer said he's a believer in Brandywine, and said "if I tell you to get in on one of these secondary offerings, you need to listen!"
A Piggyback Trade
In his "Eureka Moment" segment, Cramer took a page from the history books to justify his recent call to buy
, which is already up 9% in just two short weeks.
Cramer said the federal government's bailout of CitiGroup is similar to that of its bailout of Chrysler in 1980. Back then, the government offered the troubled company loan guarantees in exchange for warrants to buy stock in the future, at hopefully higher prices. Chrysler took the money in 1980, invented the minivan, turned a profit by 1982, and the government in turn cashed in its warrants in 1983 for a 280% gain.
Cramer said the same is likely to be true for Citigroup. He said there's nothing like the government owning 34% of your company to prod management into doing the right thing. "The stakes are higher now," he said, and that's why he's predicting Citigroup will see $12, or roughly a 280% rise from its lows, by 2012.
"You can't ignore history," said Cramer, and piggybacking off the government's investment is historically a great move.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included
RF Micro Devices
Cramer said he's not a fan of any airline, including Embraer.
The second caller's top holdings included
Cramer said Oracle and Cisco are two of a kind and this portfolio needs a healthcare stock to be diversified.
Cramer was bullish on
He was bearish on
Burlington Northern Santa Fe
-- Written by Scott Rutt in Washington
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At the time of publication, Cramer was long Home Depot, Wells Fargo, Vale, Cisco.
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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