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To all the naysayers of the $700 billion bailout package, Jim Cramer told them they're "dead wrong."
He told the viewers of his "Mad Money" TV show on Wednesday that we need to throw everything we can at the financial crisis.
Cramer said the pundits against the plan are dead wrong on the facts. He said he's tired of hearing how this option or that option just won't work. "Tell us what will work," he asked those opposed to the bailout plan.
Cramer said that after the attack on Pearl Harbor, the country did not attack its admirals for letting the attack happen, it attacked the enemy and won the war. "There will be plenty of time for subpoenas later," he said.
Cramer said he understands that it might be difficult for investors to think about stocks at a time when they're worried about losing their jobs or their home, but he feels the market now represents a great value for the long term.
He said Monday's sell-off was a clear sign to sell stocks, but Tuesday's was a sign to buy them. Cramer said he's taking the middle ground, staying defensive with consumer stocks and high dividend stocks while looking for real bargains amidst the rubble.
Cramer: Make Money as Oil Slips
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An Incredible Steal
Cramer said there is one company that's so criminally undervalued he can hardly believe it. That company is
, and he said he's "never seen a company so cheap in my life."
After hitting a peak of $43.25 earlier in the year, the stock now trades at just $15.13. Cramer said the decline in price is not due to the fundamentals, but rather to fears that a Democratic president would cut defense, as well as hedge funds being forced to liquidate their positions to cover redemptions.
With a $15 billion backlog, KBR's paltry $2.5 billion marketcap just doesn't make sense, he said. Furthermore he said the company has $9 per share of cash on its balance sheet, and trades at just 7.5 times its forward earnings, or just 3 times earnings if you back out the cash.
Cramer said that while infrastructure and energy may be out of favor on Wall Street, it's still very much in favor in the real world. The company continues to secure new business and grow its backlog.
Cramer also noted that in April, 2009 KBR will be eligible to sell itself, making it a prime takeover target for a multitude of companies. Giving KBR the same valuation as previous deals, Cramer said the stock could fetch as much as $55 a share.
Even when more conservative numbers are applied, Cramer said the stock would fetch a $33 price target and a 118% gain in the stock.
Am I Diversified?
Cramer talked with callers about their portfolios and evaluated them. The first caller's portfolio included
Proctor & Gamble
Cramer said he liked the portfolio except for the two oil companies with Williams and Exxon. He suggested selling Exxon in favor of a defense stock or a healthcare company.
The second caller's top holdings included
Jos. A Bank Clothiers
Cramer said he's not a fan of Joseph A Bank, but called the portfolio perfect if a better retailer were added in its place.
Cramer was bearish on
Signet Jewelers Limited
United States Steel
Where will the Dow Jones Industrial Average stand at the end of 2008?Above 10,0009000-10,0008000-90007000-8000Below 7000
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At the time of publication, Cramer was long Procter & Gamble, Deere and Pepsi.
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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