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NEW YORK (
) -- "You have to learn from the market's mistakes," Jim Cramer told the viewers of his
TV show Tuesday.
His said if a company's fundamentals are intact, sometimes going against the crowd is the perfect move.
Cramer said handling losses is one of the most difficult things for new investors. To help explain what to do with losses, Cramer looked at four stocks from his charitable trust,
Action Alerts PLUS.
was first on Cramer's list. When this company reported a disappointing quarter, its shares plunged from $54 to $43 a share.
But that was not the time to sell, said Cramer, it was the time to buy. While there was indeed a lull in sales, Medco's long-term thesis remained in tact. In the days that followed, Medco recovered $4.68 from its low, and still trades at only 12.5 times earnings.
was next on Cramer's list. In July of this year, Teva shares plunged from $54 to $47 on multiple downgrades. But Cramer said here too, the fundamentals remained in tact, and that stock is up more than $7 from those lows.
One stock where Cramer did sell prematurely was
. Cramer said he sold BP in the low $30s, but admits now that the negativity from a few months ago was too high. While the stock has not moved much since its lows, Cramer said his shortsightedness cost him.
The same was the case in
, which dropped like a stone when Congress and the Securities and Exchange Commission investigated the company. Cramer admitted giving up on Goldman, and in his haste to sell, lost $20 worth of upside as the stock eventually recovered.
Cramer said investors should learn from his mistakes, selling isn't always the right answer.
Whether you're a bull, or a bear, when it comes to the housing market, Cramer said he's got a stock that wins either way. He recommended a little known stock of
, which he says seems to defy traditional market logic.
Cramer explained that CoreLogic provides information services to the real estate market, and profits from both new home mortgages and from bank foreclosures. If you're a bull, CoreLogic makes 50% of its revenues from providing information on appraisals and tax information. But if you're a bear, CoreLogic also makes 25% of its revenues providing similar services to banks for foreclosure proceedings.
In addition to its transaction based services, CoreLogic also sells subscription-based data analysis services that offer higher margins. Cramer said the weak housing market has long been priced into CoreLogic's shares, so whichever way the market turns from here is a win for the company.
Trading at a paltry six times 2011 earnings, Cramer said CoreLogic is a steal, especially since the company is under followed by Wall Street, leaving a lot of room for upgrades and new coverage initiations.
Buy, Sell Higher
"Don't be afraid to buy high and sell higher," Cramer told viewers as he continued with his "Chart Week" series dedicated to exploring technical analysis. He highlighted
, a stock recently featured on his "Made Here" series of the best American manufacturers.
Cramer noted that Caterpillar has had an amazing run, from $25 a share at the lows of March 2009, to a 52-week high over $75 a share today. That's a gain of 240%. Cramer said while novice investors may feel they missed the move, or decide to ring the register, the charts say otherwise. He turned to colleague Ken Shreve for the details.
According to Shreve, with the markets looking so strong, the chart of Caterpillar does as well. The stock broke out of its consolidating phase in April 2009, and again in April 2010. With all of those who owned the stock pre-2009 now back to even, Shreve said it's clear that investors are still buying the stock aggressively.
Cramer agreed, noting that only 381 mutual funds own Caterpillar, as opposed to over 1,000 for other companies. Cramer said he'd be an aggressive buyer of Caterpillar on any weakness.
With a 20% long term growth rate and a 2.3% dividend yield, Cramer said now is a great time to buy some Caterpillar. Investors shouldn't fear the stock just because it has had a big move higher, he said.
A Boring Buy
Cramer said the filtration business may be boring, but it's expanding rapidly, and that makes filtration expert
Cramer explained that Pall Corp makes filters for a long list of applications, from air and water filters to filters for industrial machinery, ships, semiconductor manufacturing, food and beverage, and even blood filtration. That makes Pall Corp a play on the global recovery, as companies add capacity, they need more filters.
Pall Corp has a $39 billion market opportunity, said Cramer, and delivered an 8- cent a share earnings beat when it last reported with orders up 19%. With only 33% of sales stemming from the Western hemisphere, Cramer said Pall is a winner in the global recovery.
Cramer said Pall Corp may also be a takeover target, as others in the industry have received bids at a 50% premium to their share prices.
Cramer was bullish on
Cramer said that
had an awful quarter, and it really looks like Action Alerts PLUS stock
is hurting their business.
He was bearish on
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long MedcoHealth Solutions, Goldman Sachs, BP,Teva Pharmaceuticals, and Apple.
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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