Standing By the Drug Stocks

The market's selling them, but Cramer's not.
Author:
Publish date:

So

Elan's

(ELN)

blockbuster drug gets killed on top of

SmithKline's

(SBH) - Get Report

blockbuster drug bust. Suddenly the drugs have pipeline problems, and the market is selling them all.

Cramer's Latest: Join the discussion on

TSC

message boards.

I am not selling. I bought some of these last week, and I feel good that these are a great place to be between now and year-end. The "guilt by association" that is running through the drugs today seems wrong-headed to me. Elan is not

Merck

(MRK) - Get Report

. SmithKline is not

Glaxo

(GLX)

.

I am simply sticking bids in below. I am not getting aggressive because the bond market, which correlates well with drugs, still is not giving you the signal that the drugs are safe to be in.

This is a tough tape. What has momentum one week quickly loses it the next. Last week the drugs and the banks had the momentum. Now both are losing it.

I am taking advantage of it with the drug stocks. I think the banks still have further to fall after the takeover run-up Friday. But those remain of solid interest to me at lower levels.

Random musings:

Bunch of readers complaining that I

wasn't nice to

Robert Rubin

. All I can say is that Rubin would have made the same judgment when he was running stocks at

Goldman Sachs

. ... Another reader suggests that we do a poll on who is the most-hated

Fed

governor. Lot of competition for that title. ... Some people still giving me a hard time for saying I would look at

Mattel

(MAT) - Get Report

because of

Olstein's

recommendation. Excuse me, but Bob is a superior performer in a business where I think, if you have been a serious performer, it matters. I like to buy things that good managers say are good. But good managers make mistakes, too, and I am willing to cut Olstein slack because he has beaten the market more years than most managers have been alive!

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Goldman Sachs and Merck. 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.