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:
- Dow stocks to own,
- the coming rally, and
- insurers' big problem.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
What to Buy in the Dow
Posted at 8:00 a.m. EDT, March 9, 2009
When I arrived at
could reach 5320, my first reaction wasn't, "Look out below." It was more like, "Wait a second, how much I would like to buy these stocks at those levels?" Then I started thinking, "What do I do if it gets there and I am
in? Will it stay down there? Is it right to avoid a market that's cut by almost two-thirds in such a short period of time when some companies with really good earnings power might be selling at prices that we might never see again?"
But which ones?
Certainly not the under-$5 crowd --
Bank of America
. Pass on ABC because you have to bet that Citigroup isn't
, that Alcoa isn't the old Asarco and that Bank of America can't stanch the bleeding caused by Tim Geithner's indecision, which is allowing the
ProShares UltraShort Financials
to destroy the stock.
No, I like eight of them, eight that I would be buying right here. If you buy in quarters -- 25 shares per 100 you want owned -- you'll need to start today.
The first is interchangeable because of the price,
at $20 or
at $23. Why? Certainly not growth; there won't be all that much because of the recession. However, they have so much cash flow and they can slow deployment of expensive equipment -- yes, even with Verizon's FiOS -- to the point where a dividend boost will take them to about 8%, a level that
, the best-performing stock in the
, shows can withstand the onslaught. Verizon has a tad more growth because of FiOS, but it could cut both ways in a severe slowdown as the FiOS build-out will cost them.
at $18 is just too juicy. I think that it will be like CAT in 1985 when it sold down low on a weakened balance sheet and a war with labor. The company has much more wherewithal now. This is still the single best machinery company in the world, and I think that if you abandon it at $18 you are simply betting that things will never come back. That's a difficult bet to make because, if it has to, CAT can move the whole shebang overseas to where the markets are heating up again or recovering.
Here's a tough one:
at $30. Tough because I think that means
probably trading below $40, a better buy because Pepsi has less dollar exposure and also a snacks business that will have a fabulous commodity swing in its favor. Oh, and for the record, it is intriguing that Barry Diller bought a ton of KO shares here, but why should I think that it can't go lower anyway?
Every insider who has bought stock in this era has done badly
, with the exception of the director who bought
a few weeks ago! (I think these copper guys know something, because
( PCU) is now expanding like mad.)
at $24, cut in half off
one bad quarter
, is preposterous. If HPQ gets to $24, I don't know if
will make it. The competition will be blown away.
Johnson & Johnson
at $40 -- just put the stock away. Some companies have a history. You can track them. When they trade at a certain yield, they are buys. At $40, JNJ is about at a level where it gives you a yield that is much, much larger than it has ever been. I know Johnson & Johnson can get there because it has big weak-dollar needs and because the president doesn't like the health care complex. And you know that if I love this stock at $40, I will have to put as much money possible on every point drop from there.
isn't cheap at $45 in that it traded there not that long ago while almost every other stock in the Dow hasn't been at these prices in ages, if at all. But, like J&J, it is a level where you buy it and then you just keep buying it because it is doing better than all of its foes, has made its numbers in huge fashion and -- I think -- has the best growth prospects in the Dow. It would be a gift.
. Well, here's something. I am saying that Wal-Mart's basically a buy right here, give or take a couple of points. This is my favorite stock in the Dow simply because almost every single retailer is too indebted or too stretched financially to compete. This is Wal-Mart time. I would buy this one at this very moment, and I would make it my biggest position under $45.
At the time of publication, Cramer was long Altria, Caterpillar, Freeport-McMoRan, Hewlett-Packard, Johnson & Johnson, Pepsi and Wal-Mart.
Here Comes the Rally
Posted at 2:57 p.m. EDT, March 10, 2009
I'm going with Doug Kass. He says this rally is different. I say the facts are different. Over and over again I have said I will get more positive when something positive happens and when stocks are low enough that they factor in the worst case.
Last Friday I did
this distressed analysis of the
, using dividend cuts that no one is thinking about, bagels for all the financials (zero) and a decline in every single Dow stock, and I still couldn't get below 5320. With the market ticking at 6300, let's face it -- that downside is actually fathomable.
I have to admit I did the analysis because I wanted to go with Doug, because his conviction level is so high.
But I needed something besides just sentiment -- which is horrible, as witness the coronation of Roubini. I needed other bears to say "buy" -- I got them in Rick Bensignor and Bert Dohmen, two trusted technicians who had been bearish as all get out. Bert said, "Cover your shorts" on Friday. Rick predicted a rally to start today.
Finally though, I needed some facts. Some darned facts. When
said they had the best quarter in a couple of years, that was the fact I needed, because if Citi is doing well,
are off the charts.
Why does this matter? Because can you imagine what would happen if either company
preannounced an upside surprise
Now, let's layer on one more fact: Two of the most important people in Congress are now calling for a reinstatement of the uptick rule on top of Ben Bernanke calling for forbearance on the banks!
WOW -- DOUG'S GOING TO BE RIGHT with a huge call right here!
At the time of publication, Cramer was long Goldman Sachs and Morgan Stanley.
Know what you own: Cramer mentions the banks. Companies in the financial industry include Wells Fargo (WFC) - Get Report, Bank of America (BAC) - Get Report, JPMorgan (JPM) - Get Report and U.S. Bancorp (USB) - Get Report.
Insurers' Troubles See the Light of Day
Posted at 8:40 a.m. EDT, March 12, 2009
Finally it is hitting home. After months of toiling in the outskirts, the life insurance woes I have written about endlessly here and on
(where I tell you what to do if your insurer can't pay) are coming home, at least to
The Wall Street Journal
, which means it may be considered at Treasury, because when the clever Tim Geithner talks to his reporter friends to get today's agenda, they might bring it up.
I was thinking about the
and their ilk when the market almost took out 6000, because I know that each depth level down, the problems become more dire. These companies are like giant margined investors who come closer to breaking EVERY SINGLE TIME a new
level get taken out.
It is so bad for these companies that when the market almost plunged into the 5000s, a bunch of my friends thought there would be an insurance plunge protection team out there saving the market.
I am not kidding, that's how big an issue is.
This issue is so dangerous to talk about because there are lots of elective annuities tied into the S&P that if the people who took them found out about and surrendered their policies, many of these companies simply couldn't make it.
Now that the issue is being talked about, look for the shorts to press harder and cause this calamity to happen quickly rather than over time, when the authorities would have a chance to deal with it.
At the time of publication, Cramer had no positions in the stocks mentioned.
Jim Cramer is co-founder and chairman 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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