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:
- Stock picks for a theoretical Fed;
- looking beyond homebuilders; and
- moving on growth stocks now.
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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Pick Stocks That Work With a Theoretical Fed
Originally published on Sept. 10 at 1:03 p.m. EDT
Fluke vs. no fluke. That's what the
debating with that employment number last Friday. If the number is out of whack and employment rebounds, then the Fed was right not to panic. If the number is in sync with a slowdown, then there's plenty of time to act. That's why these Fed governors are spending all their time watching and talking.
Wall Street doesn't view the employment data like that. This number has
had an outsized impact on the stock market. Always. It is never dismissed as a fluke and is always taken as part of a trend. That's just the way it is.
What's dawning on people today is that Alan Greenspan was from Wall Street and he understood the weight of this number. Bernanke is from academia and the number in itself has no particular import.
I know a great number of people who thought that this employment number could trigger something this week. I know people who were buying financials and retailers Friday -- two short-term rate-cut winning groups -- not realizing how different this Fed is.
These people are idealogues. Some of them, I believe, even question the role of having a Fed. I know that may seem preposterous, but any Fed that was leaning toward a tightening a few weeks ago I think comes from the school that says "Look, the reckless lenders, whether they be the in-house captive lenders at homebuilders like
of the world, have to be destroyed before we even take the downside seriously."
That theoretical approach is a fine one. It just isn't a fine one if you want to own equities.
I think that the selloff by mutual funds who genuinely thought the fundamentals were sound is ongoing. I think the rosy hue of
matter, is being downplayed right now with no pin action.
I say let the sellers dump, buy tech first, right here. And then a few days from now buy oil.
And if you speculate on financials, make sure they have good dividends that can't be considered in doubt:
Bank of America
. They have a floor. If you insist on speculating on the bottom of the brokers, use calls.
Mind you, though, you are speculating.
At the time of publication, Cramer was long Citigroup.
Homebuilders Are Cooked; Look Elsewhere
Originally published on Sept. 11 at 6:15 a.m. EDT
The stocks are telling you what's happening.
, down 50%.
, down 54%.
, down 79%.
, down 69%.
, down 55%.
, off 48%.
, down 53%.
The yields are telling you what's happening: Beazer, 4.23%. Horton, 4.38%. KB Homes, 3.75%.
OK, so most bought stock at higher levels. OK, many built homes in Florida and California and Arizona and Nevada.
True, many offered loans to their customers.
Yes, they only vaguely policed the flippers.
Indeed, they looked the other way when the New Century Financials and the
issued exploding mortgages.
Of course, they paid too much for land at the top of the cycle.
And oh my, did they load up on debt to finance those land purchases.
For that, guess what? They are most likely going to go under. Not all of them, maybe, but the majority of them.
The majority of publicly traded homebuilders most likely will go under -- the homebuilders that built most of the homes that America moved into in the last seven years.
You know what I hear when I write and talk about this stuff? I hear, "They deserve it." What, in the immortal words of the movie
, does "deserves" have to do with it?
Maybe I am nuts to care about any of this. These stocks have been like dot-coms, almost created by the gods to give the hedge funds something to short.
But sometimes I feel that I am the
who thinks that 1. this will happen, and that 2. it might even matter.
When these homebuilders go under there will be a big mess. Their homes will flood the market. The rates will still be high when it happens. Even at a quarter of a point a month most of these guys don't make it and their homes hit the most damaged markets in a fashion that would make you an idiot to buy a home in those areas now.
That's going to happen.
That's what the stocks are saying. When that many stocks are making these kinds of moves any conclusion otherwise is just plain reckless.
There are a bunch of stocks out there that are signaling similar debacles:
. Call me a bull: I think that most of those companies can make it. But do you understand what it is like for a bull like me to write "Call me a bull, I think that most of those companies can make it?"
I read the articles, I know what the pundits are saying about me, that I am a wild-eyed doomsayer.
To that I say, Ha! I think that tech, ag, minerals, infrastructure, health care and defense are all going higher. I believe that if the
cuts two to three times we are going to
In fact, my most bullish case is made by the collapse of the mortgage industry. That's
how I get to
14,500 for heaven's sake.
But don't ask me to cheer for it.
And don't make me say that it isn't of import, that it doesn't matter that the publicly traded homebuilder industry gets eliminated, except for perhaps
, which, not ironically, is the only one that sees the true gravity of the situation or at least talks about it. Don't make me say that if the mortgage origination business goes away it is good and not worrisome.
But look at the stocks for heavens' sake! Look at them! Tell me I am wrong? Tell me how I am wrong, beyond "They deserve it?"
Get ready for it. Get ready for it in
. Be in the companies with low exposure to the U.S. consumer market:
. Own a tobacco company. Own a food company. Get some infrastructure.
But be aware that this homebuilding collapse is a 2007 event.
And nobody even cares!
At the time of publication, Cramer was long CVS Caremark, McDonald's, Hewlett-Packard and EMC.
Now's the Time to Move on Growth Stocks
Originally published on Sept. 12 at 9:49 a.m. EDT
High growth is so right here. And the out-years are being valued so much higher
because of the 10-year providing very little competition
. I think there is a whole group of investors who have no idea about the importance of stocks being considered long-dated assets. The 10-year says that inflation will be very low, and that means the earnings from far away get discounted much more positively.
When we look, for example, at a
, you can put a value on the 2012 year of earnings, because that's the long-dated asset version of Celgene, the true way to look at equities. That's how CELG can be considered undervalued on all the tests on Revlimid uses that will surface in the out-years.
has a great story for 2012 because of the rollover of patented drugs to generics. That gets the value now too, again because of the paltry value of the 10-year. The inflation rate is so low, and the competition from bonds so meaningless, that Medco's numbers seem great.
Which brings us to tech. Why can't we start valuing
obvious revenue stream and its
of big percentages -- gobs -- of advertising from the major players, the magazines and newspapers (how dangerous is that
New York Times
You can simply start taking those out-year gains to the bank.
I see it for a host of stories,
-- after this non-ruling --
and anything else that is so high-growth that it makes bonds seem like a joke. Same with
That's what's going on right now. Growth is still cheap, and it will get more dear as time goes on. Which is why you need to be in it
. And it will only get better as long as the
stays as tight as it is.
At the time of publication, Cramer was long EMC.
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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