Click here for an archive of Jim Cramer's Mad Money recaps.
U.S. markets are holding up fairly well compared to the rest of the world, Jim Cramer told viewers his "Mad Money" TV show Monday.
Dow Jones Industrial Average
has lost 38.3% of its value so far this year, it pales in comparison to losses suffered by China, Russia and Brazil, which are down 70%, 75% and 52% respectively year to date.
Cramer said there are two good reasons for the discrepancy. First, the international markets simply have had further to fall. While the Dow is now essentially flat over the last five years, Brazil's market, for instance, is still up 72% over the past five years.
Second, the U.S. dollar, now "the strongest currency in the world," is making U.S. stocks more attractive to foreign investors.
Cramer said high-yielding dividend stocks have become the flight-to-quality play for foreign investors. He noted
, two stocks which he owns for his charitable trust
Action Alerts PLUS, along with
as the perfect safe haven.
Cramer said he's also warming up to the regional banks, now flush with cash thanks to Uncle Sam. He singled out
as one of his favorites.
Cramer: Citadel's Getting a Free Pass
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1879680759; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);
In a normal market, a stock trading at just two times its earnings would be incredibly cheap. But in this market, Cramer warned that a stock's price-to-earnings ratio can not only be deceiving, it can be horribly, horribly wrong.
Such is the case of
, a stock that has had a remarkable five-month decline from $196 a share to just $30, where it now trades at a paltry two-times earnings. But Cramer asked, two times what earnings?
Earlier today, UBS downgraded its earnings estimates for US Steel from $8.15 a share to just $5 a share.
Despite the downgrade, Cramer said the remaining 10 analysts of the stock still rate it a buy or hold and have earnings pegged at an average of 2.5 times that of the new USB estimates.
US Steel is bracing for a wave of downgrades and earnings cuts that will likely pulverize the stock even harder, he warned.
Cramer said US Steel suffers from the age old problem in the steel business that end-market pricing can fall far faster than that of production. In addition the outlook looks bleak because the company is levered to autos and appliances, which are suffering from slowdowns and credit issues.
Cramer told viewers to take a lesson from the history books with Bethlehem Steel in the 1980's. That stock, he recalled, went from just one-times earnings to huge losses and eventually bankruptcy in less than a year's time.
Even U.S. Steel's 3.5% dividend yield may not be safe, he said.
A Dim Future
For years, the coal industry was simply a dirty, smelly industry that made nobody any money, and it looks like those days are here again, Cramer says.
He said that it's no secret that prices for coal have fallen off a cliff, taking a larger hit than both oil and natural gas. However with the earnings now in for industry giant
, "none of the coal stocks are safe," said Cramer.
Arch Coal reported earnings of just 49 cents a share, a full 10 cents below Wall Street forecasts. The company also noted that inventories are building, which Cramer called "the kiss of death for the coal industry."
While Arch attempted to put a positive spin on the story, citing strong exports for coal, Cramer said it'll be only a matter of time before worldwide demand slows, accelerated by a stronger dollar.
Cramer said it doesn't matter who takes the White House in November, as both candidates support "clean coal," which is not likely to translate into a boon for the overall industry. "Unhappy days are here again for the coal stocks," said Cramer.
In this segment, Cramer told a viewer that recession-resistant stocks like
should still be bought on weakness, despite recent declines.
Cramer told a second viewer that investors should stay away from
because it is a cyclical play that's levered to autos.
Cramer was bullish on
Johnson & Johnson
Public Service Enterprise
He was bearish on
Want more Cramer? Check out Jim's rules and commandments for investing by
Read more of Cramer's Mad Money Lightning Round insights
For "Mad Money" performance statistics and other links, check out Mad Money stats
At the time of publication, Cramer was long Altria, Pepsi, Foster Wheeler, Freeport McMoRan and Johnson & Johnson.
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."
None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.