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"Oil didn't go up today because King Fahd died," Jim Cramer told his "Mad Money" viewers Monday night. "That's silly."
Indeed, King Fahd had been ill for some time and his influence on oil wasn't terribly important anymore. But King Fahd did keep oil cheap, which cut demand for alternative energy. As a result, we have no real infrastructure for drilling, Cramer said. That's because the Saudis made oil so cheap. What's more, during the past 20 years, when the price of oil did rise, the Saudis always knocked it down.
Interestingly, though, King Fahd's oil policies now translate into higher oil prices. Cramer said he wouldn't be surprised to see oil hit $100 a barrel, as Goldman Sachs projected.
The Saudis have made us ashamed to be bullish on oil. But now it's time to build more infrastructure.
"We need to build new rigs," Cramer said. "It finally makes economic sense to finally build more rigs."
The best way to play late-cycle oil drilling? It's
National Oilwell Varco
. The company controls 50% of the market for rig construction and capital equipment on land. It's easy to build the rigs, Cramer said; it's tougher to find rig guys to run them. But, Cramer continued, National Oilwell just makes the rigs --finding crews to run the rigs isn't National's problem.
Cramer also recommends that investors buy
, both of which are midlevel companies.
Still, Cramer's favorite is National Oilwell Varco. And he believes that investors should buy the stock.
What is the next big thing?
Procter & Gamble
, Cramer said. When it finally closes its deal with
the combined company will be a powerhouse, Cramer said.
What about all of those people who continue to sell Procter? This is the wrong time to sell, Cramer said. "People are selling because they are bored." And that's wrong, he continued.
When Procter buys Gillette, "it will be the captain of its own destiny," Cramer said. The company, with its massive scale, will be able to dictate terms. What's more, when the deal closes, Procter will start buying stock and boosting its dividend.
"If you leave now, you are doing something very bad to yourself," he said. Cramer said that Procter & Gamble spends more on research than all of its competitors combined. "This is why you go with best of breed," Cramer said.
Still, Cramer said investors could go ahead and lose money by owning stock in some of Procter's competitors. Be his guest, he said. But smart investors need to own Procter & Gamble before it finishes buying Gillette, Cramer concluded.
Finally, Cramer spoke with
CEO David Edmondson via telephone. On Monday, the stock climbed more than $3 after the company announced a 10-year distribution agreement with
, the joint venture between
( SBC) and
At the same time, the new deal also meant the end of its current deal with
. Verizon put out a press release Monday afternoon saying that its relationship with RadioShack "no longer made sense ... given the high cost of this channel relative to other distribution channels and our insistence that growth and profit be balanced."
Cramer asked Edmondson if Verizon really did want the business -- even though it said it didn't. Although Verizon was saying it no longer wanted the business, Cramer believes it actually did. Edmondson was unwilling to comment on Cramer's suggestion.
Edmondson said the new deal with Cingular will be more profitable for RadioShack than the Verizon deal was.
Cramer said that with the stock up more than $3 on Monday, it makes sense to ring the register on the stock on Tuesday. Cramer says some analysts will upgrade the stock; if they do, investors could sell stock into those upgrades, Cramer said.
'The Lightning Round'
Cramer was bullish on:
Marvell Technology Group
( PDC) and
CB Richard Ellis
Cramer was bearish on:
Monarch Casino & Resort
( PEET) and
Advanced Micro Devices
At the time of publication, Cramer was long Cimarex, EnCana and Gillette.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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