Is the Old Economy really ready to falter? Or is this the beginning of sustained outperformance of the Dow Jones Industrial Average versus the Nasdaq Composite Index?

I find these exercises to be little more than navel gazing unless you get into the specifics and go over the individual stocks. Fortunately, I spend enough time staying current on these stocks that I think I can give you a good rundown of what I think is happening in each stock.

As always, I am a fundamentalist. I would love to hear what both

Helene Meisler


Gary B. Smith

think of these stocks, but I am stuck with what I see happening at each individual company.


I can't believe how low this stock has fallen. That's the market passing judgment on the leadership of


(T) - Get Report

which is judged to be angry, boastful and promising too much. The Street, by the way, is still lugging the

AT&T Wireless


deal and we are no exception, hanging on because we said we would hang on.

AT&T is in a nasty situation. I don't know how it will be able to finance all of the growth it needs, keep its market share and maintain leadership. At the same time this stock has been trashed. I think it is at the bottom of the range but I remain pessimistic about this equity.


It should be able to take out costs of the

Reynolds Metals

(RLM) - Get Report

folk and continue to rationalize the business. This is a great company that I think is a must buy once you are sure the


is done tightening. If you look at this year overlaid on

1994, when the Fed was as vigilant as today, you will see that stocks like


(AA) - Get Report

stumbled badly when it was clear the Fed wasn't done with its work.

American Express:

The stock of the premier financial-services company in the world has had a huge run. I think it wants to rest as the earnings catch up with the multiple. But I want to buy this stock on any weakness. It is a great stock and great company.


Here is a battleground stock. Asia's orders have turned. But the business is still not run well. I think


(BA) - Get Report

is a bargain but internally we are not buying it because we are concerned that the company will disappoint on earnings even as we think the company is turning.


We felt like buying this company after


(DE) - Get Report

reported its upside surprise but we are too fearful of the Fed to take any down.


(CAT) - Get Report

will continue to do poorly as long as the Fed is tightening.


We are huge fans of Chairman Sandy Weill but we also are respectful of the slowdown in the securities markets and the rise in short- term rates. These should put a firm lid on


(C) - Get Report

despite management's best efforts.


Blessed by

Warren Buffett

, but little else.


(KO) - Get Report

is still massively overvalued versus its peers. We are long


(PEP) - Get Report

which we think is much better run and cheaper.


Fighting the parking lot, getting early tickets to a sold out


-- and we had to sit in the front row yet -- I found myself plenty glad I am long this stock.


(DIS) - Get Report

is making a comeback and it has new theme parks and better film releases and a resurgent


to thank. This stock goes higher we think.


We got whacked by the last quarter. We thought


(DD) - Get Report

was going to have a big year but it no longer seems in the cards. Its spinoff of



hasn't helped it.

Eastman Kodak:

Real quandary here. This is the gang that can't shoot straight. They should be dominating. Must be something in the water up there. I want to buy



so badly on a price basis but it can't seem to beat the Japanese.


As I was writing this I realized that we should be long


(XOM) - Get Report

. Great cash flow, great management, positive crude prices, safe and conservative. It's what the market needs. An up stock.

General Electric:

It is our favorite stock in the Dow. It blends financial and cyclical together with great management. We are perennially long this. We always hear how overvalued


(GE) - Get Report

is and we always say the same thing: we wish we had more similarly overvalued stocks in our portfolio.

General Motors:

The definition of cheap. We are long


(F) - Get Report

, but we prefer both of these stocks to most of the market. We would own a boatload of


(GM) - Get Report

if we knew when the Fed would finish its business.


It didn't have a great quarter. A lot of bad money is in this now, as people thought this would be a breakout quarter. We think



is at the low end of the range. But we aren't stepping up.

Home Depot:

Not a great quarter, but the stock has come down quite a bit. We think

Home Depot

(HD) - Get Report

can't move up big with these rates and this Fed. But we want to own it when the Fed is done.


Leveraged to lower rates, and rates are going higher.


(HON) - Get Report

has lots of aerospace exposure but lots of construction which is slowing.

Later today: My forecast for some more Old Economy stocks.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Disney, General Electric, Ford and Pepsi. 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