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Viewers of Jim Cramer's "Mad Money" TV show probably expected words of optimism after Monday's historic 926-point rally. Instead they received only words of caution.
"This stock market still cannot be trusted," Cramer told viewers bluntly. He called the meteoric market rise just a logical response to what had become incredibly oversold conditions.
In sorting out whether Monday's monster rally was sustainable or simply a flash in the pan, he looked at the news on which it was based. He said without details on the Treasury Department's latest banking bailout plans, there's no way to know whether it will help or not. Which banks get the money? How much will they get? How will it be implemented and when? All of these questions remain unanswered, said Cramer.
The other "positive" news of the day came when it appeared
won't be going out of business. "What kind of positive news is that?" asked Cramer.
According to Cramer, the pressing issues of the day still remain. He has yet to see details on how anything the federal government has done to get credit flowing to consumers and help small businesses get financing. While another Great Depression may be off the table, the chance of a severe recession still remains on the table, he said.
Cramer continued to advise investors to exercise caution and invest in only recession stocks with large, safe dividends and those whose beaten down value is almost equal to that of the cash they have on hand.
as one such beaten-down stock with great fundamentals.
Cramer: I Was Right - and They Can't Stand It
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With so much of last week's selloff driven by hedge fund redemptions, Cramer said the time is right to buy wind power plays
, both of which have have seen their shares beaten down by hedge funds.
"The time for wind has never been better," said Cramer. With the recent passage by Congress of an extension for wind tax credits, he said the bull market in wind continues to improve. Texas, for example, is spending $5 billion on wind power, while New Jersey recently allocated $1 billion for its first offshore wind power facility.
Trinity has been pushed down over 40% from year ago levels, but continues to transform itself from a railcar- to wind-power play. The company currently derives only 30% of its revenues from rail, down from 54% a year ago, and expects to see $800 million to $900 million in revenue from wind power by 2014.
"Broadwind is an outright buy under $8 a share," said Cramer, noting that the company continues to help build new wind facilities and expand its precision gear systems.
In both cases, Cramer said the current share price only reflects broken stocks and not broken companies. He said the case for wind power is stronger now than when he first introduced his "Wind-ex" index of wind stocks earlier this year.
Girded for a Recession
When it comes to
, Cramer told viewers not to be concerned with CEO Aubrey McClendon's recent sale of company stock. He said the natural gas provider is still a buy.
Cramer reminded viewers that even after Monday's run, Chesapeake is still $6 a share lower than where it was a week ago. He said he'd buy one-fourth of a position now at current levels, and purchase more on any weakness.
Cramer still likes the natural gas story, especially Chesapeake's. The company has no debt due until 2012 and sports huge cash flows, giving it the liquidity it needs to operate in tough credit environments.
Chesapeake has also hedged 81% of its 2008 production at levels $3 higher than current natural gas prices and continues to hedge portions of its 2009 and 2010 production at favorable levels.
With 63% of US homes heated by natural gas, Cramer said Chesapeake is set to weather even a harsh recession. The company also has assets to sell in the unlikely event it needs more cash.
Cramer checked in with David Steiner, CEO of
, to get the low-down on the company's decision to withdraw its bid to acquire competitor
Steiner said that while he still likes what Republic can offer the company, he was not prepared to take on the financial risk during uncertain times. He said investors look to Waste Management for solid, dependable earnings and he's going to continue to generate cash for his shareholders.
Asked what the company might due with the cash on its balance sheet, Steiner said he's considering a stock repurchase plan and boosting the company's dividend, but he also said he'll proceed cautiously due to current market conditions.
Cramer reiterated his buy on Waste Management, with its 3.5% dividend yield and consistent management.
Cramer was bullish on
Research In Motion
Enterprise Products Partners
He was bearish on
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At the time of publication, Cramer was not long on any stock.
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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