"There are two words you're going to hear a lot more soon," Jim Cramer told his
"RealMoney" radio show listeners Thursday. "Soft ... landing."
The bust in the commodities markets of the last few weeks and the increased likelihood of a gentle slowdown in economic activity rather than a plunge into recession has led the equity markets to reverse their slide in anticipation that the
may be done tightening.
"Markets have been reacting in an appropriately bullish manner," he said. "The decline in commodities prices has lead to buying across the board in stocks."
As long as commodities went up, it led to worries at the Federal Reserve about inflation, Cramer explained.
Cramer then switched to talking about possible problem stocks that investors should avoid. Although large companies often offer investors security in volatile markets, that isn't always the case, he observed. And his first two trading ideas served to emphasize the point.
He recalled a conversation he had with
founder Thomas Stemberg on Wednesday evening. Stemburg is very knowledgeable about "big box" stores, observed Cramer.
Stemburg had noticed, Cramer recalled, that although
was a slick operator in the U.S., the company was failing elsewhere. Most notably, Stemburg said, it was having a hard time in Germany, and South Korea.
"If you can't make it in Germany, you can't make it in Central Europe," Cramer said.
And he predicts that a forthcoming analyst meeting at Wal-Mart's headquarters in Bentonville Ark. will disappoint the market.
I would sell," Cramer said.
Next he moved to a discussion on
and the announcement of a further delay in the company's new operating system.
"There is no new op system," said Cramer. "And that is Microsoft's fault."
"I know it's cheap and I own it for
Action Alerts PLUS," he said.
at $22 a share," he said. "Do I want to boot it? No, but it's not going anywhere for a while."
Each week, listeners vote to have Cramer discuss a single stock. This week, audiences voted for credit card processor
, which recently had an initial public offering.
Cramer said the stock, which went public at $39, should have been priced around $45, but the problems caused by the
IPO debacle alarmed the underwriters enough to price the MasterCard offering lower.
If the stock had opened at $45, it would have been trading at a multiple of 15 times conservatively estimated future earnings of $3 a share, Cramer said.
"I would be willing to pay $90, if it continues growing," he said.
There are 24 million merchants across the globe that accept the brand, and huge insider buying by top executives are huge positives for Cramer. He dismissed a potential legal battle with banks over the company's name as unlikely to go anywhere.
The next stock on parade was newspaper company
"Don't get suckered in by Tribune," he said. "These newspaper stocks are value traps."
He explained that the company was aiming to grow its employment Web site from 6% of its current business to 15%. But that didn't impress Cramer. "Monster is a better competitor, and don't forget Craiglist," he said, and drawing attention to the availability of free job listings on the latter.
Cramer then turned to "Vonage, the Dog," his latest pet hate.
Currently, voice-over Internet telecom companies, such as Vonage, benefit from not paying/charging FCC fees such as those levied on regular phone systems. But, observes Cramer, that may all be about to change.
"I bet the Vonage folks were aware of the FCC change," he said. "These guys just made a major exploitation of the system."
"I hope I got you out of Vonage. It's not too late."
Thursday's first caller asked Cramer about financial services company
Knight Capital Group
Knight CEO Thomas Joyce, is a college friend of Cramer's and the two happened to share breakfast recently, so Cramer took the opportunity to discuss business.
"Knight is a fabulous niche player," he said. "I think it will have the single best results of any firm on Wall Street when it announces earnings."
"Buy now at $15," he said.
The next caller asked about South African alternative energy company
, which has seen its stock slaughtered over the past few weeks as tightening by the Fed squeezed speculative money out of the stock market.
The company grew up during South Africa's period of apartheid and as a result of trade boycotts from the U.S. and Europe it had to become very innovative in a way that its current competitors didn't need to. That is now the company's competitive advantage.
The stock is down $9 and currently yields 2.45%, Cramer said. "I am shocked it has fallen so far. Buy it."
The next caller asked about
"It's a very interesting stock," said Cramer, suggesting that the company had reinvented itself, but that factor didn't turn him on enough to become a buyer. Wal-Mart, he said, was expanding its business domestically due to difficulties overseas and that would make life hard for supermarket players such as Kroger.
One caller asked Cramer about
Abercrombie & Fitch
, which had recently taken a beating in the market despite solid earnings.
"I don't typically blame short-sellers," said Cramer. "But there are sellers that are convinced that the good quarter won't last."
He said sales were up 3.3% and that overall revenue was up 17% and explained that by using his rule of paying twice the growth rate, he'd be a buyer up to 34 times future earnings.
"I think the stock could double and not be that expensive," he said.
"What are we going to do with
New York Stock Exchange
?" asked the next caller.
Cramer observed that NYSE CEO John Thain is going to have to pay more to buy an additional market exchange in Europe but probably not that much more than the current offer.
"Twenty-three of the last 24 private equity deals have been in Europe," he said. "Thain will be able to capture that business when the deal goes through."
"You want to be there. I like the stock."
At the time of publication, Cramer was long Microsoft.
Jim 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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