Soft Goods Go Soft

Cramer has found where inflation's hitting. And he's buying pulp and paper to seize the opportunity here.
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Looks like we finally found out where the inflation is hitting: the buyers of pulp and paper and fuel. This

P&G

(PG) - Get Report

call was dreadful and a real sandbagging -- as well as a massive eye-opener.

The rising costs of fuel (oil at $30 does matter!) and pulp and paper --

International Paper

(IP) - Get Report

anyone? -- have knocked off millions from the bottom line of PG. The Street will go from loving it to hating it this a.m. The transition will be brutal.

Me, I am thinking opportunity. I am adding to my pulp and paper positions as this call verified that the long-awaited price increases are sticking. And I am continuing to stay away from the

Kimberlys

(KMB) - Get Report

,

Colgates

(CL) - Get Report

and the rest of the soft-goods guys. Maybe even buy some

Consumer

(CMR.X)

puts, the puts on the

Morgan Stanley

index for consumer stocks.

No wonder

Gillette

(G) - Get Report

didn't go up after

JagNotes

said it was in talks to be acquired by P&G yesterday. It was total fiction! Hoo-hah!

Random musings:

Good call on KMB by me

yesterday. No one else will point it out.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long International Paper and Gillette. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.