Sometimes it's better to be in even the so-called "worst stocks" of a group that is in bull market mode than it is to be in a lot of other stocks, Jim Cramer said on TheStreet.com TV's Wall St. Confidential
Web video Monday.
For example, although it's true that for the past four months, pressure pumping, which is a "huge" part of
business, has been under pressure, that has already been priced into Halliburton's stock, he told Farnoosh Torabi, the host of Wall St. Confidential.
"I find that there's an amazing propensity among analysts to not recognize that their industry is in a bull market, so they're anxious to downgrade," Cramer said, referring to Goldman's recent downgrade on the stock. "And yet what that is is an opportunity for an investor who's looking for a cheap way to get into a major bull market."
What market players should be doing as stock buyers is identifying whether the negatives are priced into Halliburton, which Cramer owns for his charitable trust,
Action Alerts PLUS, he said.
"We know from everyone in the patch that pressure pumping is a bad business," Cramer said. If people view Halliburton as a "static asset" that doesn't see that or do anything about it, they would probably want to downgrade it. Also, if investors feel that natural gas is not going up or that the whole oil service group is peaking, then they'd also want to downgrade it. "I don't think any of those things are true, so I think the downgrade is wrong," he said.
If people take a look at Stockpickr.com's answer section, they'll see that a lot of people want to take their cue from "whoever says something," especially if it's Goldman, Cramer continued, adding that he used to feel the same way when he first got into the business.
If people own Halliburton, they should have done their own research because if they had, they would have known the pressure pumping business is weak and that it has been for a while, he said. Then they would have realized that Goldman is restating things that people should have already known.
At the time of publication, Cramer was long Goldman Sachs and Halliburton.
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