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:
- three heartbreaking stock plays;
- why you should ignore stories that say retailers are ailing; and
- why tech companies are poised for a great fourth quarter.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
The Market's Three Biggest Teases
Posted at 4:22 p.m. EST, Tuesday, Nov. 23
Let's talk head-fakes. The three biggest head-fakes in this market to date are:
Health care stocks, particularly HMOs and pharmacy benefit managers, are eventually going to come back, because the regulations won't be that onerous.
Natural gas and natural gas stocks are too cheap vs. oil.
Banks are so cheap that they will have to find buyers.
Lets see how these have played out. Bad to good. First, banks. These stocks trade like death pretty much every day, except when they have their occasional spike on some sort of cessation of news that allows them to run. A reprieve. They tantalize, they entice, they break your heart. They are like a ball club that shows a couple of flashes, like the Vikings and the Cowboys, and then they get obliterated, causing severe disappointment.
They just are heartbreaking, considering that, on paper, they should be winners. They sell around book value, they have already been through the regulatory mill, and they are well ahead of their European compatriots in the capital-raising department. But something comes up nearly every day to derail them, something related to the mortgage morass, or states attorney general investigations, or the need for capital raises, or scorn from bonuses, or the endless indecision from reg reform. Yesterday I even heard someone on TV saying that the banks will be big losers in the insider-trading scandals, and
did get dinged for allegedly being involved.
They are horrendous.
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Natural-gas stocks are from hunger, as my late mother would say. Right now they are enjoying a peak up in the futures above $4 and the takeover by
on the heels of the
But there are so many of them, they are all trying to be more oily, and yet they keep finding too much of the stuff. A billion-dollar commitment to build a port to ship the stuff is in the works, but the Department of Energy has called export unworkable. The fact that they even opined on it is blasphemous. A week ago, we were supposed to see the introduction of legislation that would give subsidies to those trucking companies who switched to natural-gas use, and truckers account for 25% of imported oil. Nope. Failed.
Meanwhile gigantic clean-coal projects go subsidized by the federal and state governments. The fuel is going nowhere, and while the stocks have been tremendous long-term performers, the heartbreak isn't going to end soon. There's just too much supply, courtesy of new drilling, and too much resistance from the feds, and therefore not enough demand.
Finally, there is health care, and here is where there is a glimmer of hope. It starts with
Medco Health Solutions
and David Snow, who told people do not worry about the patent "hole" in the first half of 2011, the pipeline of drugs going generic is huge after that. He has now moved the stock 15 points off a $45 bases by telling people that growth is accelerating.
Yesterday we got some Health and Human Services guidelines for HMOs that were what the banks have to hope for: leniency that will allow them to make a lot of money doing what they do. Ironically, it is a godsend to the health care reform enemy
, which we have been buying for our charitable trust. The tone has changed for generics, for biotechs -- where
is really cheap and will have a slew of good news at an upcoming conference for hematologists -- for pharmacy benefit managers, for wholesalers (
), for medical devices, many of which seem destined to be taken over or have new big products -- like
$800 million acquisition for a device company yesterday and the astounding run of
The resurgence does
include old-line pharma, where even fast-growing
has been a total bow-wow and only yield support and halos -- like that of
Johnson & Johnson
-- seem to hold them up.
It is obvious from the overall averages that we do not need these stocks to outperform to mount rallies, even as that would seem to be highly unusual, given the high profile that energy, banks and health care have. They simply don't matter all that much.
But as we get closer to the year-end, unless banks and nat-gas stocks start mounting rallies, the former on the undervaluation of the group, although I always distrust such a rally or a selloff based on overvaluation, and the latter based on a breakout in the futures and more takeovers like one for National Fuel Gas which has been a real winner, then I think dogs stay dogs.
Given the resurgence of technology, the endless fascination with machinery, truck, chemical and paper stocks, the robust transportation group, and now the steadiness of retail and the staying power of utilities, we seem like we can cruise into the year-end.
It doesn't hurt to have high growth leadership like
, even if some of them faltered in today's weakness.
But the absence of these three major groups in any advance is telling for overall breadth. In other words, I would feel much better with them than without them, especially on heavy days like today, but the same thing can be said for the last 3,000
points, so perhaps their irrelevance is more glaring than their outperformance.
After what happened today with
-- the court defeat for
-- I want to reiterate for those who bought
( JCG) because of me that I think you should ring the register, because I don't know if there will be a higher bid, but I know the stock would be much lower without it.
At the time of publication, Cramer was long AAPL, ABT, MHS and WLP.
Get Ready for the 'Retail Is Hurting' Stories
Posted at 7:58 a.m. EST, Monday, Nov. 22
The retailers are not opening the doors early because they are hurt, unsure or anxious. They are opening the doors earlier because they like it, and so do the customers.
This week will be "the retailers will be in trouble" week in the press, talking about how they have no choice but to offer outrageous bargains because they are in such a tizzy about the weak consumer and joblessness and the credit woes of everyone.
These articles will be anecdotal, they will take into account the three stores that the reporters visit, and they will have great gravitas.
And they will be wrong.
If you read any of the conference calls last week --
-- you know that inventories are lean and that these retailers are probably in the best shape for the holidays in years. In fact, other than
, not a single retailer or apparel maker has had negative things to say. The former remains a mystery, having been hit by seemingly everything that can go wrong -- commodity costs, labor costs, not-that-great sell-through -- and the latter is no mystery: You simply can't go up against
AND Wal-Mart AND Target and win.
The sheer number of encouraging snippets on the calls astounded me, whether it be Target saying credit problems have declined pretty dramatically or Foot Locker saying all athletics shoes were really strong or Nordstrom being proud of its inventory position going into the holiday. Against all of these were some articles about how televisions were being discounted. Maybe half a dozen articles. All linking the television sales to the eve of holiday destruction.
So steel yourself. There will be some manager somewhere who will give some reporter the negative copy he wants. There will be some spokesman who wants to make it SOUND like things are being given away to bring more people clamoring.
And then there will be the truth. The retailers are ready, and not even online -- which will be incredibly powerful -- is going to hurt them.
At the time of publication, Cramer had no positions in the stocks mentioned.
Tech's Secret Resurgence
Posted at 10:39 a.m. EST, Monday, Nov. 22
"Exceed historical patterns"? Strength in the Americas?
These statements from the supermarket of tech,
, make it clear that there is an acceleration in tech spending going on, at the exact time the analysts are being caught flat-footed looking the other way.
It is a remarkable turn and confirms everything that we have been hearing from the disk drives of late, the semis of late, and the software companies that provide software and hardware for PCs and servers. In fact, it is better than that -- it says that there is a great fourth quarter coming, and it would not surprise me to hear the same from
Think about it. We are getting -- just today, Thursday and Friday -- aggressively positive reports from
, which would imply good uptake for the drives after a long period of weakness; good numbers from
, which says the cloud is incredibly strong; excellent personal computer numbers from
; and terrific news from
that will spur further demand on fast Internet -- fabulous news for
, even as people no longer indentify AKAM with NFLX. We also got a terrific upgrade from Jefferies on
, another sign of good news for all things
-- so good news for the Internet tsunami, too.
Plus, all of the conventional semis must be doing well, off of Tech Data --
None of these really jibe with what the Street is looking for.
No one is talking about "exceeding historic proportions."
Perhaps they should, given that the only company that is seeing weakness is
What a reversal of everything we have learned over time.
And with the Americas comments, perhaps we no longer have to rely JUST on Asia for upside.
What a timely blowout.
At the time of publication, Cramer was long Apple and Cisco.
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.