Tech is the real deal. Stop believing tech is a sham. Forget about the past and get long tech. That's what Jim Cramer told his viewers on his "Mad Money" show Thursday night. Viewers of the show on CNBC were told to stop thinking short term and become an owner of technology. Quit selling every up move in technology, Cramer said. We are not living in 1999; tech today is moving up on real numbers, not hot air, Cramer continued. Consider Google ( GOOG). Lehman Brothers raised its price target on the stock to $350, from $275, and lifted its earnings estimate to $7.53 for 2006, up from an earlier forecast of $7.18 a share. If you assign Google a 60 multiple, which is where Yahoo! ( YHOO) trades, the stock would trade at $450 a share. But price targets don't matter as much with Google, said Cramer. It's the profit. If Google earns $7.53 a share in 2006, the stock is cheap. In sum, Cramer said that tech is not a pipe dream made of hype. It's the real deal. Big-cap technology is cheap here and you should buy it, said Cramer. Investors should also be looking at the bargains in oil and real estate, especially after Thursday's glorious sale, Cramer said. To play the oil stocks and real estate, Cramer said that he would buy Valero ( VLO) for oil and Vornado Realty Trust ( VNO) for real estate. Cramer believes that it is going to be a race to $100 with these two stocks. Which one will get to $100 first? Valero trades at around $81 and Vornado trades at about $83, but Cramer believes Valero will cross the $100 line first. But no worries, Cramer said. They're both going to $100, even if Valero gets there first.
BullishCramer was bullish on: Genentech ( DNA), Cogent ( COGT), Grey Wolf ( GW), Automatic Data Processing ( ADP), TurboChef ( OVEN), Abbott Labs ( ABT), Capital One Financial ( COF), Lions Gate Entertainment ( LGF), Global Industries ( GLBL), Pioneer Drilling ( PDC), EMC ( EMC), M&T Bank ( MTB), United Technologies ( UTX), Boeing ( BA), Lucent Technologies ( LU), Devon Energy ( DVN), Time Warner ( TWX), Harley-Davidson ( HDI), American International Group ( AIG), Schering-Plough ( SGP), Baker Hughes ( BHI) and General Mills ( GIS).
BearishCramer was bearish on: Parker Drilling ( PKD), j2 Global Communications ( JCOM), OSI Pharmaceuticals ( OSIP), Holly ( HOC), ViaCell ( VIAC), Red Hat ( RHAT), Pharmaceutical Product Development ( PPDI), Pfizer ( PFE), Delphi ( DPH), Gen Probe ( GPRO), Fuelcell Energy ( FCEL), Agere Systems ( AGR), Bell Microproducts ( BELM), Harmony Gold ( HMY) and Netflix ( NFLX).
Interested in more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. It's a series of articles from Cramer on how to become a better investor. The following table lists some of the rules that Cramer dissects.
|1.||Pigs Get Slaughtered||2.||It's OK to Pay the Taxes|
|3.||Don't Buy All at Once||4.||Buy Damaged Stocks|
|5.||Diversify to Control Risk||6.||Do Your Homework|
|7.||Don't Panic||8.||Buy Best-of-Breed|
|9.||Defend Some Stocks||10.||Don't Bet on Bad Stocks|
|11.||Own Fewer Names||12.||Cash Is for Winners|
|13.||No Regrets||14.||Expect Corrections|
|15.||Know Bonds||16.||Don't Subsidize Losers|
|17.||No Room for Hope||18.||Be Flexible|
|19.||Quit When Execs Do||20.||Patience Is a Virtue|
|21.||Be a TV Critic||22.||When to Wait 30 Days|
|23.||Beware the Hype||24.||Explain Your Picks|
|25.||Find the Bull Market|
|Check back for more of Cramer's Rules|