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NEW YORK (
) -- "The sectors that were left for dead are rising from the grave," Jim Cramer told the viewers of his "Mad Money" TV show Wednesday.
He said the bears' arguments for why 2010 was to going to be another abysmal year for stocks seem to be vaporizing, as earnings report after earnings report are coming in better than expected.
"When the facts change, I change my mind," said Cramer, who admitted that the doom and gloom of just last week has yielded to a completely new set of rolling bull markets that cannot be ignored.
First on Cramer's list of bull markets were the media stocks. Cramer said this group was left for dead in 2009, but
have come back as solid performers. Even
The New York Times
is crawling out of its grave, he said.
Next on the list, real estate. Cramer said the bears were predicting huge commercial loan defaults, to which he replied "where are they?" Then there's housing, where Cramer said the hardest hit states like Florida, California and Nevada are seeing impressive recoveries. Cramer predicted that the housing market will be able to stand on its own, without government incentives, by the end of the year.
Remember Cash for Clunkers? Cramer said that program was beaten to death by the bears for "stealing" auto sales from 2010. Yet
is continuing to make remarkable strides, he said.
Other sectors are also prospering, said Cramer, like the regional banks, where companies like
are doing well. Then there's the drug stocks, said Cramer, where seemingly everyone from the big boys to the biotechs have been on fire.
Cramer said even with a slowing China, these sectors are heating up, which is making the case for a bearish 2010 seem less and less likely each and every day.
Ready to Roll
In the "Executive Decision" segment, Cramer spoke with John Faraci, chairman and CEO of
, to get that company's take on the health of the global economy. Shares of International Paper are up just 4% since Cramer last spoke with Faraci on Sept. 9, 2009.
Faraci said he was disappointed with his company's most recent quarter. He said the company did not run as well as he'd hoped to and had issues with bad weather and wood issues. "We left some pennies on the table," Faraci told Cramer.
Turning towards the future, however, Faraci was more upbeat, saying that paper is a short-cycle business, so when the economy comes back, International Paper will see it. He said for the second month in a row, the company saw an uptick in its corrugated box business, something that hasn't happened in 18 months.
Faraci said International Paper is a cash flow story, and the company generated a record $2.2 billion in free cash last year and is poised for strong flows in 2010 and into 2011. He said the company plans a balanced approach for its excess cash, including paying down debt, capital improvement projects, energy reduction projects and the reinstatement of its dividend.
Cramer called International Paper the cheapest stock in the world at the moment and said the company is "ready to roll."
In a special Wednesday edition of the "Sell Block," Cramer told viewers it's time to bail out of disk drive maker
, after colleague Ken Shreve flagged the company's chart as being ready for a plunge.
Shreve noted that after a monster run off its March lows, the big money now appears to be exiting from the stock. After Seagate reported earnings last week, the stock ended at the low end of its weekly range on strong volume. The stock then dipped 9.2% on heavy volume, breaking though its moving average.
Cramer agreed with Shreve's analysis, saying that with 18 analysts rating the company a buy, and only 4 giving it a hold with a single solitary sell, Wall Street has gotten too bullish on Seagate. He said historically, times like these lead to overcapacity and falling prices, which often craters the stock.
Cramer said that trading at only 5.4 times its earnings, Seagate is a cheap stock, which is why the analysts are likely bullish on it. However with the chart clearly signaling a shift out of Seagate, he said he is forced to agree with Shreve.
Cramer said he would avoid Seagate at these levels, and would prefer to see investors in
, a stock which he owns for his charitable trust,
Action Alerts PLUS. Intel, he noted, pays a 3.2% dividend, had a monster quarter, and if business really is great for Seagate, it'll be really great for Intel.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included
Procter & Gamble
Cramer said this portfolio was fabulous and well played.
The second caller's top holdings included
Bank of America
Johnson & Johnson
Cramer said he would sell Johnson & Johnson in favor of an industrial stock to make this portfolio diversified.
The third caller had
as their top five stocks.
Cramer said that while on the surface this portfolio looks diversified, JA Solar, Sinclair and Diana are all speculative stocks, and that's way too many for any portfolio.
Cramer was bullish on
He was bearish on
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Intel, BP, Procter & Gamble. Bank of America, Bristol-Myers Squibb, Accenture.
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