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 the demand for copper is real;
- a notable move by bank stocks; and
- the importance of investing in dividend stocks.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Copper Demand Is the Real Deal
Posted at 11:45 a.m. EST, Thursday, Nov. 11
Not everything that goes up is in a bubble. Right now I am hearing endless chatter about the big bubble building in copper. People talk about it as if it is trading like some sort of precious metal up on speculation.
I think this is all dead wrong. What makes me think this? First of all, the 34 cities in China with populations of more than 6 million people certainly play a big role. You have to house these people. You have to build electric lines to those houses. That's intense copper use. You can't build out either without copper. That's one of the reasons that 30% of copper demand comes from China, up from 10% a decade ago. Ironically, 10 years ago, the U.S. accounted for 30% of copper demand, a figure that has since tapered down to 10%.
Now can you imagine if we start building
commercial or residential construction in this country? Talk about trough! We are building the same number of homes we constructed when our country was half as big as it is now. HALF! The household formation that determines so much of housing build has also been falling by 50%. That means people are just not leaving the homes of their parents. That is unsustainable by nature.
Finally, I have some personal experience in this process. Two of my close friends are in the demolition business. Each day they schlep copper to the traders that they have schlepped it to for years and years. Now when they go there, they see eager foreign agents ready to buy their copper for prices that you'd normally expect for what is known as "clean" copper, or copper that's had all impurities removed.
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One of my friends just sold a boatload of red metal to Turkish agents who need copper because they do not have adequate smelting activities. The scrap yards are begging for copper from these people -- some of it just used to be thrown out because merchants used to demand only clean copper. But that's all changed in the last year.
The inability of the media to understand the difference between a speculative bubble and genuine demand shocks me. This stuff is blowing the doors off. It is why I continue to like the copper producers, such as
and why I believe that
, which has the largest unexploited deposit of copper in North America (and possibly the world), must be bought -- even after this magnificent run.
The rally in copper is real. Stop doubting it. Those who mine it in mines and those who mine it in old homes and buildings know better.
At the time of publication, Cramer was long NG.
This Bank Move Is Real
Posted at 4:16 p.m. EST, Wednesday, Nov. 10
Can you believe this bank move? I think it is totally related to the job creation we are beginning to see. I think that we are all so mesmerized by mortgage morass stories and foreclosure stories and now FDIC stories that we are missing the forest for the trees.
Think of it: This morning there's a big story about the shocking increase in FDIC fees for the big banks. But there was nothing shocking at all about it. It had been written about forever. Right next to the story about the FDIC fees was an article about how the big banks are making tens of millions of dollars each day trading. That's real money that can pay the bills.
The mortgage morass? Jobs cure the morass. I am sick of hearing about weaker pricing and more foreclosures, as they are totally in the cards, too. The reserves are taken. But more important is the future: The mortgage applications were up, and we know that a person with an underwater mortgage isn't skipping if he or she has a job.
Finally, instead of fretting about the 30-year bond, remember that the banks need to make money on their loans, and the 30-year trajectory helps them as well as Ben Bernanke's mission to get some pricing in the marketplace. Banks are finding it hard to lend because the appraisers keep coming in with lowball numbers that
presume lower valuations in the future
. Through QE2, Bernanke is working to break that spiral, and you know I think he will succeed.
They have been throwing things at the banks for months, and they have always stuck. But have you noticed
creeping up to $28 and change? Now you are starting to get back to where people bought stock on big deals. The taste of the losses is going away.
The group acts great. As it you knew it would when we started getting lower claims.
They are working. It's been a long time. But it matters. Now, can you imagine what would happen when the bearish analysts upgrade? You want to be out of the group then?
Wow, I just wrote the inconceivable. I wrote that you should fear missing a move in the banks!
Now that's a breath of fresh air.
At the time of publication, Cramer had no positions in stocks mentioned
The Dividend Difference
Posted at 4:19 p.m. EST, Friday, Nov. 12
Do you do dividends? As we look at the rally in the face of this nasty selloff that
is giving us, we should take a moment to reflect on what it means to own these stocks.
As my friend and colleague Matt Horween reminds me, the market is basically back to where it was in April, but if you owned the stocks that give you bountiful dividends -- and I am speaking about the master limited partnerships --
Kinder Morgan Energy Partners
Energy Transfer Partners
Enterprise Products Partners
MarkWest Energy Partners
-- and you own utilities like
-- you are slaughtering the market if you add them back.
I think that every time we get his kind of shelling, it is worth it to remember that there are non-Chinese-reliant ways to make and keep money. But they tend to be snail's-pace ways.
Days like today are perfect reminders that you don't have to shoot the lights out in order to, well, shoot the lights out! The
may be headed for its worst week in months, but a dividend portfolio? Nope. Just another "three yards and a cloud of dust" week that makes everything much more palatable and much more rewarding.
Sugar shortage? Whoops, there goes India. They have it in spades. Remember, these grain and food complex commodities have a way of working themselves out. Remember the big rice shortage?
At the time of publication, Cramer was long INTC.
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.