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"The oils and staples are out, and tech is in," Jim Cramer told viewers of his "Mad Money" TV show Thursday. The only big risk, he warned, is in not buying the big tech names.
"Right now, I see a bull market in tech," and it's not going to stop going up, Cramer said. People have been selling the oil stocks and are starting to sell consumer staples. "When you move your money out of a sector, it has to go somewhere else."
Cramer noted that if you want to make money, you have to buy the obvious, not the obscure, adding that "you should be able to get in now and not miss much." The fourth quarter is nirvana for technology, Cramer said, pointing out that tech stocks have consistently outperformed all other stocks. On average, over the last five years, the Goldman Sachs Technology Index has been up 17.3% in the fourth quarter, compared to the
8% move, he said.
Cramer said that the big names you should be buying now are
. "These are the tech stocks that should make you money."
Cisco is in a great position fundamentally, Cramer said. Meanwhile, Apple is having a monster back-to-school season. "Now their machines are much better than Microsoft's. They've become more than an iPod store, and they're taking more market share," he said.
Cramer said that Adobe has new software updates set to debut that should launch the stock, while Microsoft is expected to launch the Vista operating system to business users next month and then to home users in January.
Motorola is not complicated, said Cramer. "They have market share gains and have a lot of room to expand
their margin," he said. Qualcomm is another name to get into because they make the guts of these cell phones. In addition, the stock "had been totaled from a lawsuit," but since that case was thrown out, there's still 7 points of upside left for the stock to make up, he said.
Cramer again reiterated that Google is a $420 stock that can go to $500, adding that the Internet company has locked up a key demographic with its purchase of YouTube.com. Meanwhile, Cramer said that Oracle just broke through a 52-week high and is still cheap.
Tech stocks generally have great fourth quarters, Cramer said. "We're following the money into tech. It's a gift. I need you to be pulling the trigger."
In response to a caller, Cramer said that
Advanced Micro Devices
realized that video games are the growth part of the industry. The combination with
, which AMD announced it will be purchasing for $5.4 billion, will have big returns.
The Boom in Sonic's Bust
has been left behind because Wall Street thinks the restaurant company is insane, but Cramer said this is your chance to get in cheap.
In August, Sonic announced a Dutch auction of epic proportions, Cramer said, dramatically reducing the number of shares outstanding. "The stock had a sickening slide from $24 to $19. Everyone thought it was a train wreck, but it wasn't."
However, if management has faith, you should too, says Cramer. "Sonic has two great things that could make you some mad money. It has infinite replay value. Sonic also has the regional-to-national concept that I love, which means it can expand."
The restaurant chain has also seen 20 consecutive years of positive same-store sales growth, Cramer said. "The fundamentals are fabulous. Sonic has a fabulous record and tons of room for growth."
Currently, Sonic is in only 29 states, so there's no saturation, he said. "Sonic has the ability to become a growth machine. I believe they will execute."
You have to compare this Dutch auction to others, not just specifically in the fast-food-restaurant sector, Cramer said. Sonic said it will pay $23 a share for the stock when it started the auction, but Cramer said the stock could go well above that level.
The bottom line: Sonic is left behind, and this is your chance, Cramer said. "Sonic has a great growth story that should drive it long term."
Responding to another caller, Cramer said that the reason fast-food companies are hitting near 52-week highs is because gas prices are lower, giving people more money in their pocket to spend elsewhere. "Restaurants are back," he said.
On a previous episode's "Sell Block" segment, Cramer said you shouldn't sell
, and now he's whipping himself over that call since the stock has plummeted following a lower earnings forecast. "It's a thoroughly broken company," he said. "I think it's going lower, not higher."
was added to the Sell Block, as Cramer said he was also wrong on his recommendation because "the decline in newspaper advertising is falling at an astonishing speed. The only direction they're going is down. If there's any bounce, sell," he said.
is a biotech company in disguise, but it's not going in Cramer's Sell Block yet. It reported a wider-than-expected loss, but the decline Wednesday was a buy opportunity, he said.
is still "a terrific long-term story."
was also in the Sell Block. It fit in perfectly with parent company
First Data Corp.
before Western Union spun off, perplexing Cramer. In addition, Western Union could really get hurt by falling international wire transfers, he said.
New River Pharmaceuticals
is up so much, Cramer doesn't think it could go up anymore, and that it's time to ring the register.
It is time to sell
Abercrombie & Fitch
now that it has a high valuation, as the stock has hit $76 a share, Cramer said. "You are now being a hog. I think you should sell and swap into
was a broken stock, but not a broken company, Cramer said. On Thursday, the stock went up nearly 8%, but it's not on the Sell Block. "I wouldn't be surprised if it goes higher."
Mad Mail & Sudden Death
In the "Mad Mail" segment, Cramer said that after Google's purchase of YouTube.com, the video-sharing Web site's relationship with
Level 3 Communications
is still intact.
Cramer told another emailer that he wasn't crazy about
SiRF Technology Holdings
, instead suggesting the purchase of
In response to an email asking if there is a play for a stock likely to be added to the S&P 500, Cramer recommended looking at
Hudson City Bancorp
. Hudson is "the best bank," Cramer said, before reminding viewers that "we go for fundamentals, not S&P add."
Cramer said that "you don't create any value with a split," in response to a question about gauging if there is stock-price mobility left in a stock after a split.
Cramer also reiterated that
is a sell.
In the "Sudden Death" segment, Cramer was bullish on
and was bearish on
Dr. Reddy's Laboratories
Cramer was bullish on
Capital One Financial
Cramer was bearish on
Morgan's Hotel Group
For more of Cramer's insights during the most recent Lightning Round,
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At the time of publication, Cramer was long Capital One Financial, Qualcomm, Schering-Plough and Sears Holdings.
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