What a headache owning these name-brand medicine chest/fridge names has become! The whole purpose of buying
was that you don't have to check in to see how each is doing. That was the whole notion behind global brand stock-owning.
I don't think
bought these because he wanted to hear about number cuts or brokerage downgrades. I don't think he bought them because he expected that they would have flat years followed by flat years. I don't think he was in the market for single-digit growers that augmented their numbers with aggressive stock buybacks.
But the simple truth is you can't sleep at night owning these old safety stocks. Their trends have become frighteningly variable. Their price points, once meaningless, have become meaningful. I love
, but be darned if I didn't find myself questioning why in heck I had to pay eight bucks for a couple of blades this weekend at
When we went bowling two weekends ago my kids wanted sodas. That's $2.50 worth of Coke. I told them to hit the water fountain. They didn't mind. (Believe me, my wife is even worse! She's a
and thinks that
These stocks are becoming cyclical in my mind. Like cyclicals, they can be replaced with cheaper alternatives when push comes to shove. Their managements don't seem to know it yet; their customers, however, do. Nevertheless, it is not the customers that determine the price-earnings multiples, it is the index funds and Warren Buffett. For years, shorts lived in fear that the stocks they were betting against would be rumored up on word that Buffett was buying. It turns out, we learned from
, that Buffett sells, too. It would not surprise me if shorts were to start spreading rumors that Buffett is bailing from these names.
And why not? What¿s the point of owning cyclical brands? If I want that, I'll go buy
. They are cheaper and have managements that are every bit as good as Gillette, Coke or
Procter & Gamble
The only difference? Those two warhorses seem to preannounce to the downside a heck of a lot less than the Cokes and Gillettes. With multiples that are a lot more palatable.
Frightening concept: Buy the can, not the ingredients.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication the fund had no position in stocks mentioned in this column, though positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending an email to