Jim Cramer fills his blog on RealMoney 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:
- the beating financial stocks are taking;
- the innovation of U.S. CEOs; and
- how the extension of unemployment benefits will help retailers.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Owning Financials Just Got Even Harder
Posted at 12:50 p.m. EDT, July 23
How much harder can they punish these financials? How much worse can they make owning this group? It is almost as if they have become worldwide pariahs, stocks that simply can't be touched, that have to be written off and written off worldwide.
As I see the stress tests unfold in Europe, you have the worst of all worlds: Half the people think they are phony and not tough enough, and half the people want to sell them because they are too tough and are going to force capital raises left and right. We know from when that happened in U.S. that you get hammered quickly, and who wants to get hammered? I don't know if they are tough enough or not; they don't seem so to me. But it doesn't matter. There's a split, and that's negative.
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There are certain stocks that you need to have go higher in order to have a sustained move. You need tech, you need health care, and you need financials. Why? Simply because they account for too much of the
and are considered too important to the capital formation that the world needs.
Anyone who owns a financial right now is taking his or her life in their hands unless they own a couple of regionals that are deemed "safe," like
, even if, if I might add, they aren't any good.
Plus, as Tim Collins showed in my "Off the Charts" segment on
, nobody's bothering to discern now anyway. Credit loss declines should matter; they always have. But the investment banks with appreciable declines are trading like the bank index because of financial regulation, but it isn't like the market loves the others too; it just hates them less.
is up from when it reported, but the market was up huge yesterday, and on a make-or-break performance day it did nothing for you.
So the lesson is, unless you own nothing but multinational stocks, especially with business in Asia, nothing is forgiven. The inverse is true, too: We forgive a
of China. Owning something that can't be forgiven is totally treacherous. Hence the financials. You own them, they will take the money away. Or at least it feels like it.
At the time of publication, Cramer had no positions in stocks mentioned.
Innovative CEOs Created Today's Market Winners
Posted at 11:25 a.m. EDT, July 22
The world is collapsing, and the U.S. is leading the way. So go buy multinational U.S.-based companies to profit off of it. The counterintuitive nature of this market, the disconnect not between the macro and the micro but between what some companies are doing to trump the gravitational pull of an uncertain economy and what others are doing, looms large today.
In other words, today's rally has less to do with improving trends in Asia, Europe or North America, and more to do with CEOs taking matters into their own hands and profiting from innovation (
), from a switch from straightforward shipping to logistics (
United Parcel Service
), from being a domestic jeans company to being an international sportswear powerhouse (
), and from being a mediocre railroad into a well-run transport company (
). A company goes from being a provider of machines to build roads and homes in the U.S. to being the leading machinery company for infrastructure worldwide, especially emerging markets, even if today it's not loved as it should be (
That reinvention has actually been the theme all earnings season.
goes from being a domestic truck drive-train supplier to an international engineered products company for aerospace and fluid controls, and it blows away the earnings.
doesn't tolerate the slowdown in the domestic soft drink market and hits the ball out of the park in emerging markets.
Stanley Black & Decker
shifts from being an also-ran domestic tool company to being the dominant tool suppler to contractors and do-it-yourselfers.
realizes that there's not a lot of growth in its domestic elevator or heating ventilation and air conditioning domestically, so it swings rather radically to being an international company -- ahead of most others -- with an emphasis on China, where construction and infrastructure are booming and adds a non-cyclical fire and safety business.
goes from being Pittsburgh Plate and Glass to a company that might as well be called Worldwide Coatings and Value-Added Chemical and Plastic Solutions. It might as well be located in Hong Kong, not the town of the Pirates, Steelers and Penguins. As for
, CEO Peter McCausland takes a local cyclical gas company -- local for me, I am from Philadelphia -- into one of the largest secular industrial gas companies in the world and outperforms just about every company in the
by doing so.
And of course
goes from a personal computer company with a good music business to the greatest cellphone company in the world with a brand new device, the iPad, that is going to crack into the enterprise. It's got an iPod business that should have peaked years ago and is the foundation for a dominant intellectual property site. Oh, and it's got a personal computer business that has been reignited by the rest of the product lines.
We always think about Apple as the innovator, but a huge part of 3M's gains come from new products -- some would say a third of its growth is from products that didn't exist a couple of years ago, a la Apple. In other words, we expect innovation from Apple. But do we really expect innovation from a company that used to be Minnesota Mining and Manufacturing. Shouldn't it have gone out of business by now?
When we sift through this stock market era, we are going to recognize that there were real heroes here, mostly nameless to you, even as I recount them: George Buckley and 3M, Louis Chenevert at United Technologies, and his predecessor, George David, who started UTX down the international path, John Lundgren at Stanley Black & Decker, Doug Oberhelman and, before him, Jim Owens from Caterpillar, James Young at Union Pacific, Charles Bunch at PPG, Sandy Cutler at Eaton, Indra Nooyi at Pepsi, Peter McCausland at Airgas, Scott Davis at United Parcel Service, Eric Wiseman and before him, Mackey McDonald at VF Corp. and, of course, Steve Jobs at Apple, the one CEO you may have heard of.
These are men who did not need this country to do well, they did not need the federal government to deliver, who did not sit back and have their industries taken away from them but pressed for innovation and profit generation, pressed for their shareholders.
That's why I just wanted to take time out to salute them as we watch Congress grill Ben Bernanke and as our president stumps the country saying how great the stimulus plan is.
These men and women deserve our praise, not our scorn. We want to share the wealth they create and have created. Amazingly, they will let us do so, in their stocks. Unfortunately, people aren't buying them. They are leaving the market, and the leaders of our country couldn't care less what they are doing for those who work with them and those who invest with them. Frankly, they deserve better.
At the time of publication, Cramer was long AAPL, SWK and UPS.
Unemployment Extension Is a Boon for Retailers
Posted at 7:39 a.m. EDT, July 23
Looks like 2.5 million people just got $34 billion more than they had to go spend money at
and go buy
Stanley Black & Decker
hammers. That's how you have to view this unemployment legislation, as a gift to the retailers.
It comes at an interesting time. My contacts in retail are indicating that June, unlike April or May, was a decent month, and that it got better as it went along. The possibility of better numbers from outfits like Macy's or
should not be overlooked. Of course, we have to consider the idea of just going with
and to a lesser extent
as ways to play it. I always shudder at Wal-Mart because I know the president and labor organizer in chief wants it unionized through easy Card Check recruiting. But the idea of doing a high/low Williams-Sonoma/Dollar General trade may be the single best way to play the benefits bonanza and the better consumer feel (Williams-Sonoma will not get a dime of the unemployment benefits, believe me).
Retail's been crushed here for a while -- in fact, ever since
Bed Bath & Beyond
got annihilated on a not-all-that-bad quarter. It has been giving up points left and right until VF Corp. said things are better yesterday and we got the short squeeze.
Now, though, I am thinking -- with the benefits, with what looks like to be the end of the malaise-inducing
spill, we could very well be in a situation where estimates for the autumn could be too low.
The group, to me, seems compelling and for once has a bit of macro information in the form of handouts that makes it better than it was when they sold off on the denial of the extension of benefits last time.
: I see some upside ennui coming after yesterday's rally. I will look at
now that the fluff is gone. I thought
and Skyworks remain great
derivative plays even though
is trading like a disk drive company!
At the time of publication, Cramer was long Apple, Home Depot and Stanley Black & Decker.
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Jim Cramer, co-founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio,
. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.
Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he co-founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.
Mr. Cramer is the author of "
," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.