At the theme park, roller coasters mean summer thrills, and Jim Cramer told his
"RealMoney" radio show listeners Tuesday that they're in for a summer-long roller-coaster ride on Wall Street.
"We just had the first steep drop in a long ride, and like on a roller coaster, we'll probably end up in the exact same place we started," said Cramer.
He said to think of stocks as a coiled spring, saying that last week's gains were due in large part to the fact that stocks had sold off so much. Like coiled springs, they had to unwind and move higher.
But the market's fundamentals didn't really change, he said. So on a day like Tuesday, when market leaders like
get hammered, it will weigh on stocks.
Even though he likes GM, he did agree with a Deutsche Bank analyst who changed his rating on the stock to sell from hold because of the effect of rising gasoline prices. As for Wal-Mart, last month was good and this month was bad, he said. And when Wal-Mart says business is bad, analysts worry that things are getting slow nationwide because the retailer services so many customers.
He added that the
is also part of the problem, and that the markets are going to fluctuate wildly leading up to the central bank's June 28 meeting. As these bankers try to figure out what they'll do, and with Fed speakers deliver a variety of messages, the market will jump up and down, he said.
And the selloff in the world's hottest markets, Brazil and India, is also rattling stocks at home, Cramer added.
The roller coaster is here to stay, he said, and the only way to avoid motion sickness is to have a diversified portfolio, he said.
Oil at $100
We have lots of reasons for oil to go much higher, and not many reasons for it to go lower, said Cramer, identifying geopolitical tensions around the world that are keeping crude prices high.
Iran could stop shipping oil to us, and that's a big deal given that the country is the No. 4 producer, said Cramer; and hurricane season is upon us, but plenty of production capacity is still offline in the Gulf of Mexico.
Nigerian rebels have cut production in that country by 25%; and even though OPEC pledges to keep output levels up, Venezuela might cut back, he said.
But Cramer believes that two entities are clearly not betting that oil prices are going lower anytime soon:
and Richard Kinder, chief executive at the energy infrastructure provider
The brokerage has said that oil could hit $100 a barrel and beyond, Cramer said. And Richard Kinder is taking his own company private. Cramer said that listeners who own Kinder Morgan stock might want to hold it because he believes that it could go higher.
He added that supply isn't the only thing keeping oil prices high. "Don't be fooled," he said. "When they say that inventory levels are high, it's because we don't have a lot of storage."
The secretary of Treasury is typically a sexy job, unless John Snow's at the helm, Cramer said, adding that it's tough for him to be too harsh a judge of Snow.
"He's a terrific avuncular guy," he said, adding that Snow is the sort of man that everyone at the family barbecue wants to give more coleslaw to.
However, Cramer said that Snow was never a "promoter and an operator," which a good treasury secretary needs to be. However, Cramer believes that the new hire, Goldman Sachs chief executive Hank Paulson, will be the mover and shaker that the Treasury needs.
Paulson is an engaging figure with international experience, Cramer said, and he could be the big win that President Bush needs.
Whether you're a democrat or a republican, Cramer said that it's in everyone's interest that the economy stays healthy, adding that he has high hopes for Paulson.
Cramer told his first caller that
is "the quintessential selloff stock.
This is because the company just reported magnificent quarter, guided up very big and has been up a lot, all at a time when stocks across the board are coming down.
But Cramer believes that Boeing is one of stronger stocks and that he is hoping for it to come in a few more points so he can again buy some for his charitable trust
Action Alerts PLUS.
However, he said the situation is more difficult for someone who has a full position in the stock because it's probably not done going down. Cramer said not to sell it outright because the fundamentals are too good. You'll be under pressure, he warned, but don't give up on it.
He told another listener that he believes that
, which he owns for his trust, is "hideously undervalued" because its
Kellogg Brown & Root
subsidiary is not factored into the stock price.
But the subsidiary is being spun out by Halliburton's "pro-shareholder management," Cramer said. Given the fact that the company reported a "magnificent quarter" on April 20, and that he believes KBR is worth a huge amount of money, he sees that stock going to $90 from about $73.
A teacher and his students called in to tell Cramer that they invested in
, following advice from the King of Booyah to buy what they know.
Cramer congratulated the class for picking up the stock when it was low, adding that the stock is up a few points. "Bulls make money. Bears make money. Hogs get slaughtered," he said.
It's one of Cramer's favorite aphorisms, but he told these callers that they are in a great stock and that he would not bail on it altogether.
As a consumer cyclical play, he said that Hershey could move higher if the economy slows, and that it's a well-run company.
He told another caller that
is a tough call. It's a cheap stock, but it has no momentum and it doesn't generate great returns, he said.
However, an analyst whom he respects believes that the stock could turn around in the next few months, so Cramer said that if he owned it, he would stay in it for another couple of months.
"I think it's 1 point down and 3 points up," Cramer said, adding that this could make for a decent summer trade.
, in that both are natural gas and pipeline companies.
However, Cramer said that Williams has a huge amount of debt, which would make it much harder for the company to go private, a move that Kinder Morgan management is hoping to make.
Finally, he told a caller that he would be careful about
, adding that it's the No. 2 big-box electronics retailer behind
There are rumors that Best Buy has a lot of inventory, he said. With Circuit City just a few points from a fresh high, Cramer said not to risk those gains. If he owned Circuit City, Cramer said he would ring the register.
At the time of publication, Cramer was long Halliburton.
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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