Jim Cramer's Best Blogs

Catch up on his latest thinking on the hottest topics of the past week.
Publish date:

Jim Cramer fills his blog on


every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week, he blogged on:

  • Why private-equity deals keep going;
  • how real growth stocks rule this rally;
  • smart fashion stocks;
  • Dow Jones' surrender; and
  • why Sears is rising.

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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

Five Reasons Private-Equity Deals Keep Going

Originally published on 5/29/2007 at 8:18 a.m.

More than $81 billion in buyouts this month. That's extraordinary. All kinds of industries: service, manufacturing, credit-card processing.

And what do we hear from the media? "It can't continue." Funny, this "can't continue" story appeared in abundance last November when we had a similar surge. It has appeared many times since the year began.

Yet the story keeps getting written and nobody apologizes for scaring you into selling stocks that were later privatized.

Funny; it


end. But not before many things happen, including these five:

1. Interest rates on the long end going to at least 6%-7%. At that point, I believe it will get too risky.

2. The equity market being closed to the IPOs of the companies that need to be flipped. It's wide open right now.

3. Not one, not two, but maybe three or four, or even five deals going bust. Can't we wait for even one to go belly-up before we get too nervous?

4. Valuations ramping up more. With the

S&P 500

selling for about 17.5 times next year's earnings, there is plenty of room to keep buying.

5. Private-equity funds running out of money. Very unlikely.

Until we get this litany made real, you should simply dismiss all of the stories you read about the private-equity guys pulling back or getting worried.

Without these five events playing out, frankly, I believe most of these cautionary stories are irresponsible, although no one in the media


has to answer for the sin of keeping people out of a market that goes higher.

Random musings:

Hats off to


Erin Burnett for highlighting the



deal. I was skeptical at first but the company has so much New York apartment rental real estate that I should have been pointing it out myself. ... If you love following stocks as much as I do and want to help me help people make money, you're someone I need. I'm looking for an experienced research assistant based in the New York metro area to help me out (CFAs welcome). Please send your resum

and cover letter to

resumes@thestreet.com, with "research assistant" in the subject line.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.

Real Growth Stocks Rule This Rally

Originally published on 5/30/2007 at 1:48 p.m.

Earlier this week I was freaking out because of the rally in the

Procter & Gambles

(PG) - Get Report



(K) - Get Report

of the world. It wasn't long-lasting. We have come right back to where the wild bull markets are -- don't miss the great recap of my show

every night, including

last night's show, which dwelled on this theme -- and it is helped today by the big


(DE) - Get Report


But take a look at this day. You can see where the money flows right after any showdown between the bulls and bears: infra, oil service, minerals, aerospace. It is as if these stocks had motors that kick in, hidden generators, when everything else is flatlining (read: drugs or banks). These keep going and going and going...

Don't forget, one of the reasons these companies can do that is that they've been shrinking float like mad over the years and just don't have enough shares around to satisfy the myriad buyers.

You need to understand that the market comes back to real revenue growth and earnings growth, not the manufactured earnings growth with single-digit revenue expansion like so many of the packaged-goods companies have.

That's why these stocks -- infra, oil service, minerals, aerospace -- are always the place to go in selloffs like the one we had this morning off of China's decline.

Random musings:

Can't stock the


(CROX) - Get Report

, that's the word I get from my retail friends. ...

Spirited discussion in the

Answers section of

Stockpickr about


(MA) - Get Report

. You know I think it is going much higher. Also catch

the discussion on


(AAPL) - Get Report

and why I think it should be scaled out of in front of the iPhone launch. I just sense the hype is too darned high.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.

Smart Fashion Stocks Change Their Stripes

Originally published on 5/31/2007 at 12:02 p.m.

Is the intellectual property of apparel, the brand of apparel, beginning to win out over the stores that sell it?

That's what I am pondering as I watch

Ralph Lauren

(RL) - Get Report


VF Corp.

(VFC) - Get Report

go up endlessly, even as the stores that sell the products go sideways or down.

In a

Wall Street Confidential video

this morning with the always excellent George Moriarty, I found myself making the analogy to when the balance of power between the PC makers and the insides of the PCs --


(MSFT) - Get Report



(INTC) - Get Report

-- shifted in the 1990s. The brand and the gross margins had been going to the assemblers, the


(DELL) - Get Report

, the



, and it shifted to the insides because the key intellectual property was based on those two suppliers.

Now, with the incredible new products from Ralph Lauren -- including this American initiative at


(JCP) - Get Report

and the Chaps work at


(KSS) - Get Report

, I am beginning to believe that the power, the gross margin, is shifting in Lauren's favor. It has already shifted to VF courtesy of its excellent proprietary brands and its jettisoning of its commodity bra brand, which can be so-called "footballed" by the retailers.

That's why Lauren is up huge today. This transference could lead to much, much bigger gains than we have seen from these two players. I said on Wall Street Confidential that it would not shock me to see these stocks go up 30 to 40 points over time as this trend is recognized. That's what happened with Intel and Mr. Softee.

I think it is happening again.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.

Dow Jones Wakes Up -- Will Others?

Originally published on 6/1/2007 at 7:08 a.m.

Remaining newspaper companies take note, especially

The New York Times

(NYT) - Get Report


Going digital isn't enough. It won't work.

That's the real reason behind the Bancroft capitulation that I have been saying since Day 1 had to happen.

It's the economics of the Web. But first, let's accept that

Dow Jones'


two-tiered structure created a tremendous disincentive by management to develop businesses away from the


. As someone who worked for Dow Jones from 1991 to 1995 I can tell you that the reservations to do anything remotely smart or clever away from the paper were so great that I knew right at the start to shut up.

(Never forget that the publication you are reading was initially SmartMoney.com, my blueprint that I showed Dow Jones in 1995 so they could own the Web space. They wanted it for free and would not even give me a percent equity in it.)

Dow Jones hated new ideas,


them. And hated anything that would make their product more trader-friendly -- read


-like. They also hated to hear any criticism about their TV show offerings -- remember that. Oh yeah, and they hated me for speaking up about it.

Why not? Who cared? As long as the family's trustee gave the execs cover, they were free to go to win as many Pulitzers as they wanted and free to run the place like a real good college.

But somewhere along the line, perhaps in the last five years, Dow Jones got dot-com religion. It developed a fabulous product that is the paid gold standard online. It's terrific.

And therein lay the real undoing of the company. You see every day that customers are switching from the staid off-line product to the cool online product. But customers simply can't be monetized. Every day Dow Jones loses income from the switch. The ads aren't there, the infrastructure's too unwieldy, the headcount way too big.

But that was OK, it had the Dow Jones Wires to make them money. But with the additional competition of


and Thomson on the low end and


on the high end, there was no room for the Wires either.

The one-two punch of the immediate and incredibly stupid kneejerk rejection of the savior bid


the potential annihilation of the wires resulted in a situation where the stock would fall to the 20s, the dividend would soon be in question, and the layoffs (the real compromise of journalistic integrity, not the aggressive muckrake of China that might go away), was actually at stake.

What we know about the Web and newspapers is that their integrity is


every day because every paper in this country is overstaffed vs. what can be made up in ads.

I believe the younger Bancrofts knew this and

as I have been saying

(lonely but right) the lawsuit against the trustees was just too juicy.

The trustees knew they could never get the stock to $60 with these trends, and the big opponents of the bid -- like the two-faced James Ottaway, whose family created one of the journalistically worst chains of papers in the country -- had to accept that the Journal would soon be as bad as the Ottaway papers if the bid wasn't taken.

The bottom line here is that it was always in the bag for Murdoch: Cheaper than it was when he wanted to buy it in 1996 because of the rank incompetence of the management, which didn't know cash flow from Scapa Flow, and more needed because of the business channel. It's just that the trustee, who barely even bothered to show it to the Bancrofts, as usual, didn't know it. (Lawyers, more guys who can't read an income statement.)

The good news? I bet the paper, now well-funded, will be better than ever. The bad news? What a great saga, fun to watch and report on.

At the time of publication, Cramer had no positions in stocks mentioned.

Why Sears Is Rising

This item was originally published for Action Alerts PLUS on 6/1/2007 at 11:30 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to Action Alerts PLUS, please click here.

Why did



spike today? It certainly wasn't anything I saw about the substance of the business; remember, its earnings report Thursday was far from spectacular.

I think it spiked because of the share count. Two numbers tell the story: 153.7 million and 152,492,175 shares. That's the number of shares that were listed in the quarterly release and the number of shares listed in the 10q just released today. That means Eddie Lampert bought back 1.2 million shares between May 5 and May 25.

This is significant because in the last quarter Sears bought back no stock and in the quarter before that it repurchased only 82,363 shares.

The stock ranged from $175 to $182 during the buying period. That means the lowest price Sears could have paid was $175, the highest price $182.52. Again, while we don't know the average price paid for those 1.2 million shares, we do know that it is higher than the $164.91 paid in the fourth quarter. That's very important.

Sears has a ton of cash, more than $3 billion. At this pace, if Eddie miraculously paid the low for all of that stock, he would go through the part of the $600 million buyback authorization that remained as of the press release in about 60 days. When that's gone, I believe he will authorize another one.

The story here has always been one of running the business for a profit and deploying cash through buybacks. This company is worth $23 billion after cash. That's ludicrous. The sales per share here amount to $340.

J.C. Penney

(JCP) - Get Report

, a company only slightly smaller, has sales per share of just $86.



, now Macy's -- also similarly sized -- comes in at $49.

Home Depot

(HD) - Get Report

, almost three times bigger, is $44.


(LOW) - Get Report

is about twice as big yet has just $30 in sales per share.

On any metric -- sales, real estate, brand equity, whatever -- this store chain is cheap and Eddie Lampert still hasn't rationalized the darned business! He hasn't closed the overlapping stores, he hasn't sold real estate, he hasn't closed nonperformers. That's bad; I don't like it. He hasn't even solved Sears Canada yet.

But that's in the future. And that's what matters.

I'm still not happy about the last quarter. But I'm going to stand pat with this, my third-largest position in the portfolio. With action like this, I'm happy to wait for this story to play out.

At the time of publication, Cramer was long Sears Holdings.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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