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:
- What's fueling Crocs' run.
- How bonds hurt stocks.
- Dow Jones' merger follies.
- Three speculative stocks that work.
- 10 stocks not to panic out of.
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Two Factors Still Fuel Crocs' Run
Originally published on 6/11/2007 at 3:25 p.m.
When a product can't be stocked, the stock of its maker goes up. Right now there are stocking problems with
Research In Motion
iPhones (lotta panic there), with
products and with
The most severe, blow-the-doors-out shortage is with Crocs.
Plus we still don't have enough analysts on the stock. Given its multi-billion market cap -- $3.8 billion at last count -- it sure seems mighty undercovered to me. There are only two New York-based firms following the stock, and one has a hold on it. We get a couple more buy ratings, though, and that might trump the company's pipeline not being filled yet.
How important is the inventory issue to the stock? Reebok went up tenfold before the stores had too much inventory.
So it can happen to Crocs.
It's getting there for certain, but isn't there yet.
Either the pipe being filled or the additional recommendations could turn this stock down. Until we have those, though, stay the course.
While you're thinking mall stocks, click on over to Stockpickr's
Mall Rat picks for June.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
How Bonds Really Hurt Stocks
Originally published on 6/12/2007 at 11:38 a.m.
When I used to trade "versus" the bonds, meaning that I would take heed of them, I would often marvel at how quickly the market repriced the long-term risk of stocks. We like
knowing that the 2012 earnings could be great, but we hate Celgene because if the bond trajectory continues, we won't pay $50 for those earnings.
You see the only way to value these long-term assets, meaning stocks we buy for earnings way in the future, is to figure out how much we will pay today -- and many people use the bond market to gauge what they will pay. As rates go up, we pay less for the outyears.
That's what you see right now. Only low-multiple stocks will get a boost here, if there is one, and anything high-multiple gets crushed.
The good news here is that there really isn't that much difference between 4.5% and 5.25% -- the 10-year's range.
The bad news is that there is a difference between 5.75% and 4.5%. That's just a quantum leap that will play havoc on this being a way to figure out those future earnings.
When you overlay the technicals -- will we take out the
low of last week? -- and you decide that interest rates are too much on the move to make any discount rate calculations, you just sell. You sell the very high growth stocks that you normally would buy.
That's why I say again,
just follow the 10-year. Until it settles, even if it settles at 5.5%, I would go right back to growth. But if we get to 5.75%, the majority of people out there will use 6% and at 6% on the 10-year you are going to get tons of money out of this market and a lot of people who truly don't want to own long-term growth stocks.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
10 Stories You Won't Read About Dow Jones' Merger Missteps
Originally published on 6/13/2007 at 2:39 p.m.
I keep thinking about what
The Wall Street Journal
would write about the following company's takeover trials.
1. The company gets the takeover bid and the senior officers sit on the bid and disclose it to no one as the stock goes up, making it likely that there will be trading on inside information. That's why the law wants timely dispersal of material information. Can you imagine the field day the
would have with that?
2. There's an incredible amount of call-buying after the receipt of the bid -- but before it is announced as a scoop, no less. Who knows how long the company in question would have sat on it?
3. The board turns out to be a total nonentity and doesn't even take a position on the bid. Can you imagine what the
reporters and editors would do with that?
4. The controlling shareholder family's spokespeople, before the bid is even cold, say the word is "no." Without even polling the family? Can you get more duplicitous? The polling turns out to be wrong.
5. The scion of a subsidiary chain without any reputation for greatness or even goodness turns out to be the most vociferous board member against the bid. (OK, by now you've figured out that I'm abstracting the
situation with this
bid from Rupert Murdoch. Frankly, I would rather work for the worst Murdoch property than the best Ottaway paper. Nobody takes Ottaway to task for that "irony.")
6. There seems to be only one kind of independence the
cares about: reporting independence. How about editorial independence? Why doesn't anyone there talk about how the editorial page's view would be preserved under Murdoch
but not other owner in the media?
Why isn't that pointed out? Ron Burkle sure wouldn't preserve that. I think that's a great point in favor of Murdoch.
7. The resumes are flying out of the bid-for company, yet it never gets reported. (And everyone knows it.)
8. The numbers are so bad since the year began that the hypothetical company in question would be laying off people right now, but management wants to wait because it would look bad and make the need for a deep-pocketed bidder much more evident. (Wouldn't do to look like they need Murdoch, would it?)
9. The paper seems reluctant to report on the myriad failures to diversify away from anything except for newspaper. (So what? The reason you needed the diversification was to pay for the paper. Instead, all we hear about is the need to preserve purity. You know how preserve purity? You make money away from it.)
10. The new travesty: How could
all of these promotions be made today fully knowing that the paper and the company will most likely be sold? What the heck? Where's the questioning and reporting of that?
Nah. Too close to home.
This story, if it had been
business, not just the press, would have produced an endless series of stories about how rogue this company has been, how anti-shareholder, frankly, how disgraceful this whole episode has been.
Fortunately for Dow Jones, its executives, its board members and the clueless controlling family, the company owns the most important business newspaper in the country.
What a break.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.
These Three Speculative Stocks Still Work
Originally published on 6/14/2007 at 10:58 a.m.
Five-dollar and ten-dollar stocks don't trade like
There. Now I have explained a mystery that continues to confound newer investors.
I have been adamant that speculation should be a part of your daily investing regimen. I want you to get involved and I want you to stay involved, and that means having fun and having some excitement with 20% of your portfolio.
So, when I mention a stock like a
, I mean them to be in that part of the portfolio as the specs that can keep you in the game and make you some big money.
I mention all of these because they are now stalled. They are all digesting stock issuance or merger issues. They all have supply out there. Supply can weigh heavily on a stock, particularly with a Dynegy, where
just dumped 96 million shares on the market at $9.70. That's a real stench.
What to do? I think that this behavior is typical of stocks that have had big moves,
even as the enterprise values are increasing
This pattern exists with all comeback stocks that have had big moves. You have to accept it. When they back off, you have to buy more unless something has changed.
I changed my opinion on
after big runs because of changes at the top. I have not changed my views of Level 3, Dynegy or Rite Aid because I have
to do so. Everything I want to have happen -- the Eckerd deal, broadband shortage, power plant shortage -- is happening or playing out.
I don't know what to do other than stay the course when the fundamentals are working.
I hope that helps. I don't want to handhold on spec stocks, but I need to do that on these. I accept the responsibility, but I also think that people who own these should not be relying on me from here. They should be doing the work on the fundies themselves. If they can't, ring the register and find something you can tolerate.
It's a different world, a younger world. Go watch
my series of videos with Cliff Mason introducing his
new column. It is so heretical that I shudder. But I was an icon-smasher 20 years ago. Now I am an icon; I need to be smashed, too. ...
, the June 230 puts are being sold furiously. That's going to push the stock back to $230, where I believe it will settle. ... Why do people continue to doubt
?!? They are just plain silly and do no work.
At the time of publication, Cramer was long Goldman Sachs.
10 Stocks Not to Panic Out Of
Originally published on 6/15/2007 at 12:25 p.m.
Let's go over the stocks you were supposed to sell during this stretch.
I heard negative things about
. Sellers of Google, have you thought about the disintegration of
in front of your eyes? Those are the competitors.
MSN? Insistent on not doing a good job.
AOL? It has degraded its brand with endless ads and new editions of AOL that load you up with ads. That won't cut it.
Meanwhile, Google just keeps innovating.
You were supposed to sell
. Wasn't that one dead? If you were s scale seller, you were able to buy some back perfectly and rebuild your position to be able to sell it into the launch and buy it right back. Those who sold none are doomed to repeat themselves.
was supposed to be dumb here, tapped out. Plus we were headed into Visa-ville. Forget it; this story gets more exciting because I believe fees will soon be raised. The secular trend out of cash into cards remains a key driver.
Everything housing and auto was supposed to be chucked. But
leading this rally and I now believe that
could tack on a quick $10. Meanwhile,
is breaking out.
was supposed to fail here on the top in corn. I heard this stock written off by everyone and his brother.
got downgraded; housing was supposed to matter. The farmers keep getting richer; Caterpillar's an infrastructure play.
I got the call over and over again to sell
. Copper was going to crash. A couple of strikes and an activist filing later and the stock ramps higher. What a joke the bears played on us!
-- the key to this market -- broke down to $82, I saw the freakout. It quickly reversed and now has some real momentum to go to $90, where I think it is headed.
As rates went higher, we had to fear the banks, right? Don't they do badly? No, they do well when there is inflection in the bonds, when they can take in deposits lower than where they lend. We are at last getting there; not yet. But earnings will ramp big if bonds keep going down. They are buys, not sells.
disappoint? Aren't we supposed to be dumping them furiously? Aren't they supposed to have down earnings? Please. Now I have to panic and sell companies that trade for 9 times earnings?
I don't think so.
We were betting on bonds going to 92 and we were betting on ferocious consumer price increases. All wrong. The market was supposed to be overvalued but the rest of the world was much cheaper.
Once again, the prudent thing was to stay the course and
not panic, or do what we did for
Action Alerts PLUS, which was put money to work in the downturn. The reckless thing? To cut and run.
When will they learn? Hopefully never, so we can make much more money.
What's the real worry here? What should we
care about? I only really worry about one thing: government intrusion, like the silly thing that the government wants to do with Blackstone. The key to this run is our government for, by and of the corporation. If that changes, I will get real worried.
Away from that, we sell on some bad news to buy it back when things settle.
Rail breakout, rates going higher. ...
breaking out here. ...
be bought here: Citigroup, Merrill, Goldman, Keefe Bruyette and Credit Suisse all have holds and numbers that are too low. I suspect we will see some people breaking ranks and going to buys next week. I would buy Fannie July 70s for a buck and change. ... Still liking
on multiple approvals. ...
Poor little lamb
. ... If you haven't read
Cliff Mason's column yet,
what are you waiting for?
At the time of publication, Cramer was long Yahoo!, Toyota Motor, Caterpillar, Freeport-McMoRan, Corning, Fannie Mae, Citigroup, and Goldman Sachs.
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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