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NEW YORK (
) -- The charges against
, a stock which he owns for his charitable trust,
Action Alerts PLUS, aren't enough to sway the markets' direction for long, Jim Cramer told viewers of his "Mad Money" TV show Friday.
In a nutshell, Cramer said that stocks go up and down based on one thing, corporate profits, and today's news against Goldman have absolutely nothing to do with the corporate profits of
, another Action Alerts Plus name, or
. To think otherwise "is just nuts," he said.
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Cramer said today's selloff provides an opportunity to review his rules for investing, which include staying diversified, doing your homework, not being greedy when you have big gains, and sticking with high paying dividend stocks when times get tough.
Cramer said that one event, at one company, should never be enough to change investors opinions on the entire market. He told viewers to stay in the game, and to always trust that the market is not rigged, and the chips are not stacked against you.
Next Week's Game Plan
So how should investors play the market in a post Goldman world? Cramer laid out his game plan for next week's action. He said that he'd start by doing nothing Monday morning, as the markets will still be processing this weekend's negative headlines. But by Monday afternoon, Cramer said opportunities will emerge.
Cramer said he'd first look at companies that have just reported great numbers, and have nothing to do with Goldman, companies like
, an Action Alerts Plus name, and railroad
Cramer said he'd next look at the financials brought down by the Goldman news, stocks like
Bank of America
, two more Action Alerts plus names. Cramer said he'd also keep an eye on
, which reports on Monday.
Next, Cramer said he's consider big industrials that have not reported yet, such as
Cramer also gave the nod to
, and retail plays like
, said Cramer. This Action Alerts Plus stock also reports next week, said Cramer, but he wouldn't buy it for the quarter but rather for the next few years.
A Case of Arrogance
Cramer took a few moments to sum up today's Goldman news by saying that there's a line like between illegal, and just plain stupid. He said that while he's been pro-prosecution in his career for years, based on what he's seen so far, the government's case against Goldman is weak. at best.
Cramer explained that Goldman doesn't appear to have done anything wrong. When a hedge fund client came to them asking for an investment tool to play the housing market in 2007, Goldman did what it was supposed to: It hired an outside firm to provide the due diligence. He said the resulting prospectus on the new investment tool seemed to be very thorough and transparent.
So Cramer wondered whether it was illegal for Goldman to then sell this new product, or just stupid for anyone to buy it. He said he's not sure, but he does know that people made money hand over fist before the market ultimately collapsed.
Cramer said he's all in favor of financial reforms, and he likes a vigilant prosecution, but not an over-zealous one. He said at first glance Goldman appears to be arrogant, and arrogance is not illegal.
Chip IPOs on Fire
In the "Know Your IPO" segment, Cramer said that Alpha & Omega Semiconductor, which will begin trading under the ticker "AOSL" in about two weeks, is a deal worth getting in on.
Cramer said the semiconductor stocks are on fire, benefiting from both the mobile Internet tsunami and also a cyclical upturn in corporate and personal computers. He said the last two semiconductor IPOs,
both had successful IPOs.
Cramer said the Alpha & Omega comes from strong bloodlines, with the company's nine member management team racking up a combined 180 years of semiconductor experience.
The company manufactures power management chips, with an impressive portfolio of over 600 products. With 60% of Alpha & Omega's revenues coming from PCs, 20% from consumer electronics and 20% from industrial applications, Cramer said the company is also well diversified.
Cramer said this venture-backed IPO is shaping up to be a hot one, with none of the current partners selling out on the deal. He said he'd be willing to pay 12 times earnings, or $23 a share for Alpha & Omega, which is above the projected IPO range of $17 to $19 a share.
Cramer was bullish on
Kinder Morgan Energy Partners
City Telecom HK
He was bearish on
Hartford Financial Services
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Goldman Sachs, Apple, Intel, Intel, JPMorgan Chase, Bank of America.
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