This article was originally published Jan. 27.
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"There are times when we get way too negative and become blind to opportunity," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.
He said while it's prudent to be skeptical, it's foolish to use pessimism as your only compass.
Cramer said that some of the most hopeless, written-off stocks on Wall Street, have been posting the most surprising gains.
, a stock which he owns for his charitable trust,
Action Alerts PLUS, as four recent examples.
Cramer said while all four of these names posted horrible quarters, none of them was as bad as Wall Street expected, resulting in quick profits for those who saw the opportunity.
US Steel, for example, has fallen from $196 a share to a low of just $20 this past November. Yet the company earned $2 a share in its most recent quarter, ahead of expectations, sending the stock up a quick 6.9%.
Nucor also surprised the Street, posting 34 cents a share in earnings, compared to the 12 cents the analysts forecast. That stock popped 6.3% on the news.
Peabody said there are 30 new coal power plants being built in 19 states, set to consume another 70 million tons of coal annually. Both Peabody and Freeport enjoyed a 12% pop on their earnings.
Cramer also mentioned
Research In Motion
, which fell Monday following a
Wall Street Journal
article calling the company's launch of its Blackberry Storm disappointing.
Cramer: Coal is the New Black
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said sales for the Storm topped 1 million units since its launch in November, sending that stock up 6.3%.
Cramer warmed "don't believe everything you read and never be blind to opportunity."
Weathering the Recession
Cramer talked with
chairman and CEO Rick Goings to find out how just how well his company is weathering the recession.
Goings explained that the stock market doesn't seem to be working for a lot of great stocks, including Tupperware. He said his company does very well in times of higher unemployment and is doing well again.
Asked about Tupperware's dividend, Goings said the company is very aggressive about growing its top line and entering new markets, but remains conservative with its financial policies. He said the company maintains its consistent dividend strategy.
Regarding its business, Goings said Tupperware is experiencing a second wave of employment as the national jobless rate topped 6%. These new recruits are now in the process of growing their businesses and adding to the company's top and bottom lines. He dispelled the myth that people don't buy Tupperware in tough times.
Goings said Tupperware remains strong overseas as well, with 70,000 women in Russia now looking for the solid income potential that only Tupperware can provide.
Gold Loses Luster
In this segment, Cramer examined gold, the hot commodity that's now en vogue with many large fund mangers on Wall Street.
Cramer said the chart of the Market Vectors Gold Miners ETF (GDX), along with the charts of many gold stock such as
, look bullish according to many technical analysts.
Since its November lows, the
has rallied only 12%, while the GDX is up a whopping 84%. Cramer said this means more buyers are coming into these stocks and are more eager to buy.
But based on the fundamentals, Cramer said he'd ring the register and take profits in the whole group. He said gold is used as hedge against two things, chaos and inflation. And with much of the chaos of 2008 behind us, and inflation at bay, he sees no reason to buy any of the gold names.
Cramer said under $44 a share, he'd consider buying Agnico-Eagle, but until then, the current market action says nothing about the future.
Outrage of the Day
Cramer added Andrew Liveris, CEO of
to his"Cox-Madoff Memorial Wall of Shame." He detailed how Liveris, in the short span of a year, turned Dow Chemical from a blue chip icon to a bad joke.
Cramer said Liveris told analysts on Jan. 29, 2008 that there was no way Dow's earnings would ever fall below $2.50 to $3.00 a share, due in part to the company's new joint venture with Kuwait, which guaranteed low raw costs. He also pledged the company's dividend was safe. Back then, the Dow traded at $37.94 a share.
Then on July 10, 2008, Liveris announced a takeover bid for
Rohm & Haas
at a staggering 68% premium to the company's true value. Cramer said if investors look up the definition of "overpaying," they'd find Liveris listed
Since July, Dow Chemical has come unraveled. On Dec. 8, 2008 the company cut 5,000 jobs, only to have Kuwait pull out of the joint venture just 20 days later. Liveris announced his abandonment of the Rohm & Haas deal just this week and today announced the possibility of a dividend cut.
Dow Chemical now trades at just $13.19 a share, having lost two-thirds of its value based solely on the promises and mismanagement of Liveris, said Cramer.
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At the time of publication, Cramer was long Freeport McMoRan.
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