This article was originally published Feb. 9
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"Meredith Whitney, not Tim Geithner, will determine the fate of the financials tomorrow," Jim Cramer told the viewers of his "Mad Money" TV Show Monday.
He said Whitney, a financial analyst at Oppenheimer, now packs more of a market-moving punch than even the new Treasury secretary.
Cramer said the fate of the financial stocks, including whether they live, die or become perpetual zombies, all rests with Whitney, as hers comments are the only ones investors listen to and trust, given her long track record of being right on the financials.
Despite what plan or comments Treasury Secretary Tim Geithner may make, it's Whitney's comments that will move the financials.
Whitney, a long time bear of the financials, has advocated banks sell their most valuable assets in order to fund their misguided lending operations. This in stark contrast to Cramer's support of a forbearance plan, which would allow banks to keep their prized assets and instead get a temporary "pass" from the government to return to stability.
Last week, Whitney again told investors to not even consider owning banks on a equity basis. Cramer said any change in Whitney's stance on the banks would be huge for stocks like
Bank Of America
. But he said that shift in stance is not likely to come tomorrow, nor anytime soon.
Cramer: Taking Profits on Good Companies
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Cramer said there are only two banks what could potentially withstand Whitney's wrath. They are
, the only two banks he feels will be higher by Friday. Both stocks are in his
Action Alerts PLUS portfolio
Getting Smart Online
Cramer talked with Wally Boston, president and CEO of
American Public Education
to learn more about that company's online education offerings.
Boston feels the possibilities for online education are endless, especially given how technologically astute children are becoming.
He said studies have shown that students learn just as well online, sometimes even better, compared to traditional classrooms. Given the flexibility online classes offer, the benefits are substantial, he said.
Boston also noted that 67% of Americans now feel traditional colleges have simple become affordable, another trend playing in the company's favor.
Regarding the American Public's military offerings, Boston said 50% of their military students hear about the college from a friend. He said the new GI Bill, passed by the Bush administration, allows for higher tuitions and benefits to be transferred to a soldiers' spouse or dependents.
Cramer said he'd be a buyer of American Public on any pullback under $40 a share.
Know Your IPO
In this segment, Cramer examined the right way, and the wrong way, to play the planned spinoff by
, which he also owns for his
Action Alerts PLUS portfolio, of its Mead Johnson baby products division under the symbol MJN.
Cramer said he'd be a buyer of Mead Johnson, but only if he were able to get in on the IPO itself. Otherwise, he said, he'd take a pass. Cramer explained that with the deal priced between $21 and $24 a share, he'd be willing to pay up to $26 a share for some IPO action, but buying shares on the open market would prove costly.
Cramer used last year's IPO of
to illustrate his point. He said getting in on Visa's IPO at $44 a share would still be yielding a profit today, but buying shares on the first day of trading would have that same investment trading flat.
In this segment, Cramer was asked about buying
. Cramer said he's not recommending banks at this time. "I know better than to get in front of a snowplow," he said.
Cramer told a second viewer that he'd be a buyer of
ahead of strength in China.
Cramer told a third viewer that he'd look into
ahead of rising refining margins.
Cramer was bullish on
Research In Motion
St Jude Medical
He was bearish on
Check out the latest edition of
"Cramer's Take onTop-Searched Stocks" on Stockpickr.
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At the time of publication, Cramer was long Goldman Sachs, Morgan Stanley, Bristol Myers.
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