"Let's talk about what 'disappointing' means and doesn't mean," Jim Cramer told his
"RealMoney" radio show listeners Tuesday.
Worse- and better-than-expected headline earnings numbers are not metrics that he really cares about. Instead, Cramer pays attention to the conference call to determine what his take on the quarter will be.
Of all the code words management uses to indicate what's really going on, Cramer said that "demand" is one of the most important. If demand is great and the quarter didn't look right, Cramer overlooks the headline number.
But when supply is too abundant and demand isn't very good, Cramer said the company has problems in spades.
And when you hear the word "challenging," you know there's trouble, he said.
According to Cramer,
Johnson & Johnson
says things are challenging to describe the pharmaceutical environment in this country, citing pressures from the Food and Drug Administration and from class-action lawyers. This tells him to be careful.
says things are challenging because of demand problems and rising costs of raw materials.
And sure enough, Cramer said, both stocks are at or near their 52-week lows.
But Cramer said that
did not say things are challenging but that it's having problems meeting demand.
, which he owns for his
Action Alerts PLUS charitable trust, likewise talked about problems meeting demand.
In all of this hand-wringing about tech, Cramer said he didn't hear the word "challenging," with the exception of
, which he also owns for his charitable trust.
"So if you stayed away from the sector because of last week's brutal selloff, now is your chance," said Cramer.
He is still upbeat about
, another stock in his charitable trust,
The bears want to portray the problems with tech as a slowdown, he said, perhaps linking it with the $700-a-month heating bills some of us are getting.
"I would agree with that if
were at $39 instead of $49, and if there weren't such unbelievable demand, still, for video games, iPods and all of the other cell-phone-cum-mini-PCs out there," he said.
The Danger Zone
On Tuesday's Danger Zone segment, Cramer said he had to reverse his position on
For a year and a half, he's called the company a best-of-breed gold stock. But now, Cramer said, Newmont has reported a really bad quarter and it can't produce the amount of gold it thought it could.
Mining stocks depend on low finding costs and massive reserves, so Newmont is in trouble now, Cramer said, urging listeners to no longer use it as their best-of-breed gold company.
In the sector spotlight on precious metals, he told a listener who wants to get into the sector to take a look at
, a South African company, or
, an Australian company. He owns both stocks for his trust.
Cramer also said to check out the South American company
He told a listener who has lost money on
that he'd swap out of it and consider picking up
And as for all the ads about the coming gold boom, he said to watch out because these commercials have been running for years, regardless of what's going in the market, and that it'll continue to run in an attempt to get your money.
A listener wanted to know if Cramer preferred
American Century Global Gold
Vanguard Precious Metals and Mining
Cramer said that picking up a basket of gold stocks makes sense, and that he thinks Vanguard Precious Metals and Mining is a worthy substitute for owning a single stock.
Callers and Mailers
The balance of the show was spent responding to a slew of listener calls and email.
Cramer said that radio frequency and mobile wireless communications technology are on fire, which bodes well for
but that investors should be careful because the stock is near its 52-week high.
He also said that if
loses its current court battle in Florida and the stock turns lower, he'd use that as an opportunity to pick up some more shares.
As far as
is concerned, Cramer said it's a fairly inexpensive stock, selling at 20 times earnings. But he added that the cheapest of all the drillers is
, a company he likes that sells at just 13 times earnings.
Even though Canada's conservative leader Stephen Harper won the prime minister race, Cramer reminded a listener that he didn't win by enough to enact sweeping changes and that a coalition government could be in the cards.
One possible change that could happen with a conservative in office would be the repeal of the country's "onerous sales national sales tax," which could make Canadian retailer
, which trades in Toronto, a good play.
Cramer said that at only a point off of its 52-week low,
could be a "'mon back."*
Cramer said that's because it had a nice run before pulling back to $10 and added that political problems in Israel and Prime Minister Ariel Sharon's failing health have kept a lid on the Israeli market.
He still likes
Matsushita Electric Industrial
, as well as
. And Cramer believes that the Japanese market will have another great year.
He told another listener that he would stick with
, even though the shares have been down a little.
And Cramer likes
, which he said is down on downgrade. He said it's a momentum-oriented stock that just pulled back 10 points.
On the other side of the ledger, he said that
should be sold because he thinks this Chinese Internet stock is going lower.
Cramer told another listener that it's time to take some off the table with
. Cramer said he recommended the stock at $17, but now it's at $32.
Without a takeover bid, he said, this pharmacy benefit manager will come back down, and Cramer would be hesitant to take a new position at its current level.
Finally, a listener wanted to know if the exchange-traded fund
Morgan Stanley Eastern Europe Fund
was a good way to invest in Eastern Europe.
Cramer said that a basket of stocks is likely the best way to play the region and that
has a history of being able to invest well overseas.
*For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.
At the time of publication, Cramer was long Intel, BHP Billiton, Altria, Anglo American and Motorola.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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