NEW YORK (
) -- 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:
- why investors should own both gold and Apple.
- stocks where short-sellers got ahead of themselves; and
- why the Wells Fargo earnings call was so important.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Gold or Apple?
Posted at 3:06 p.m. EDT, Friday, Oct. 22
Which will outperform? Which will do better?
My colleague, Erin Burnett, asked me to determine which one I like more for the short term and which one I like more for the longer term. I said that I liked Apple more short term and that gold will go to $2,000 long term, but I should have been honest: I like them both and
this morning in a video.
To me, you need one special-situation stock -- I am using Apple -- gold, a dividend raiser, a high-dividend stock or MLP and a foreign ETF or stock. You need them all. And I don't want to make it so it is either one or the other.
Why like them both? First, I think you have a real chance here to get gold now if you haven't bought any because we finally have a down week. I think QE2 means buy gold, and you have to do so.
> > Bull or Bear? Vote in Our Poll
Apple? You have to recognize the power of its innovation. Hardly a month goes by without something new and different coming from the company that brings you back into the stores. This week it's the MacBook Air. My kids have MacBook Airs from 18 months ago, and now, similar to how people used to buy a new car every other year, they want new MacBook Airs!
That's how you keep a retailer growing.
At the time of publication, Cramer was long Apple.
Shorts Got Ahead of Themselves
Posted at 1:31 p.m. EDT, Friday, Oct. 22
Shorted. Hated. Reviled. Overvalued. Way ahead of themselves. Plain nuts. I am talking about the stocks that I have liked so much, stocks like
Chipotle Mexican Grill
What's going on? First, for F5 Networks, Riverbed and Citrix, the cloud is back. It was dinged badly by the screw-up at
, which was all about execution and slowdown in the need for more data-center space. They all sold off on that blow-up. Then Riverbed reported a terrific number today, and that's a pure play on the growth of data centers, I think putting the lie to Equinix. The desktop cloud got a huge boost with the numbers from Citrix. You cannot have this kind of huge growth in Internet data traffic without F5, and so F5 is lifting off.
The shorts went all in on these companies when Equinix blew up. It was just totally knee-jerk, total collateral damage, sympathy with the devil. That's all blown up now.
Amazon is rallying because the volumes are extraordinary. It is
online. But Wal-Mart is a $200 billion company with stalled growth, while Amazon is a $70 billion company with unbelievable, breathtaking growth. People looked at the wrong metric, gross margins, initially, and sold it down. There are tons of shorts here, and they had hoped to sow a negative story about margins, but it didn't stick.
Chipotle is a heavily shorted name because it is considered overvalued and because it, in the end, is just a decent restaurant chain. I have contended that the
is wrong for this stock, that it is way too low given its model's ability to be extended worldwide, which is what is happening. What I didn't count on was an acceleration in store openings, which will mean an acceleration of the top line. It's at $6 billion in market cap. I think that this company might deserve a $10 billion market cap in that accelerated revenue growth.
Netflix? It's always been a customer acquisition business. Customer acquisition costs have come down huge while subscriptions keep going higher. For some growth investors, there is no price that they wouldn't pay for that kind of model. The shorts have paid the price, as one by one they become believers.
There are so many shorts out there and so many people who took their cue for cloud slowing from a wrong source or who don't believe that companies deserve to have valuations so high, given their mundane businesses.
They are wrong.
At the time of publication, Cramer was long AAPL.
Wells Sheds Light on the Mortgage Canard
Posted at 7:47 p.m. EDT, Thursday, Oct. 21
Don't waste another moment thinking about this foreclosure mess until you listen to the
conference call -- a turgid affair, but one that will make you realize that there is no way this process is going to be shut down unless the judges and politicians really do want to bankrupt the banks and kill the U.S. economy. Given how costly it was to save the banking system, even antibank President Obama is not in favor of putting it on its heels again.
Maybe because there are so many business outlets writing and commenting on issues, or maybe because of the unchecked nature of the Web, it has become almost common and accepted wisdom that many things were done wrong on the paperwork of loans themselves. I think that's wrong. If you listen to Wells Fargo -- and I have never thought they were liars -- the process has pretty much been the same all along and there are no title chain complications WHATSOEVER. It remains a good, profitable, growing business for WFC.
Now, of course, Wells is a "good" actor in the system. Many others were "bad" actors, including many fly-by-night outfits that got involved when the nation was buying and selling 7 million homes a year. The spawn of the bad-actor originators that were packaged -- the non-whole-loan mortgages, meaning the ones not owned by the banks -- are problematic in many ways: BUT NOT TO WELLS and not to most major banks, the exception being the convoluted
Bank of America
. Convoluted because it was an amalgam of really bad loans made by
-- worse than
"Pick-a-Pay" loans -- and perhaps decent loans by Bank of America itself.
But let's stick with Wells, because Wells turned the group around.
I think that Wells may allow us to develop a new worldview of the banks as companies that are beginning to make a lot of money lending, and lending more than they were, while they clean up the balance sheets. What does that mean in English? I think at last that the number bumps you see this morning are real. You want to be in the stocks of companies where the estimates are rising, and this was the first quarter where they did it in any uniform fashion for many banks -- and Wells Fargo is probably the best of the large ones.
Despite the propaganda, we do not care at this stage of the cycle how the estimates go higher. We only need to think that when this bank was at $25 a year ago, it was losing money hand over fist and it needed capital. Now it is the exact opposite ... and it is still at $25.
Go through this quarter: no change-of-title worries, lots of new business, lots of cost synergies, far fewer bad loans and a workout of Wachovia's worst loans that has shown the loss estimates to be way too high.
Now, all of this is what the company says. Many think the company is not honest. They don't come out and say that, but that's the tone of the comments. If you don't think they are honest, then what they say doesn't matter.
I think it does.
: I am not viewing
through the same prism as the rest of the banks going forward. It is an international story that will show great growth in a couple of quarters, and this mortgage business will be far less important than it is to BofA or Wells or any of the other majors.
At the time of publication, Cramer was long Bank of America.
Jim Cramer, 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 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.