After Citigroup's ( C - Get Report) disappointing second quarter, it's obvious the supermarket financial model is broken, said Jim Cramer on his "Mad Money" show Monday night. Indeed, everyone got financial services wrong. Everyone thought that having all of the services under one roof was the right way to go. Cramer told his CNBC audience that the market no longer wants a general practitioner. Instead, Cramer said, it wants a specialist. So what's the takeaway from Citigroup's lackluster report? Investors should be in the companies that specialize in Citigroup's categories. Investors should be in the best-of-breed companies that compete in those areas in which Citigroup operates. That means if you want the best retail banker, you should own Commerce Bancorp ( CBH. If you want the best credit card company, you want to own Capital One Financial ( COF - Get Report). In mutual funds, you want to own Legg Mason ( LM - Get Report). The best commercial lender? CIT Group ( CIT - Get Report). The best brokers to own are Bear Stearns ( BSC and Lehman Brothers ( LEH. But don't jump in just yet. Wait for Citigroup to get downgraded. And then wait for brokers to downgrade other financial companies as well. After they do, you'll want to come in and scoop up all of the specialists. In other words, stick with purity, Cramer said, and stay away from dilution.
'The Lightning Round'
BearishCramer was bearish on: Broadwing ( BWNG, InfoSpace ( INSP, Lone Star Technologies ( LSS, MFA Mortgage ( MFA - Get Report), Netgear ( NTGR - Get Report), Mosaic ( MOS - Get Report), Grant Prideco ( GRP, FuelCell Energy ( FCEL - Get Report), Anheuser-Busch ( BUD, Gartner ( IT - Get Report), Denny's ( DENN - Get Report), Nokia ( NOK - Get Report), Geron ( GERN - Get Report), Paychex ( PAYX - Get Report), Extreme Networks ( EXTR - Get Report) and Shanda Interactive ( SNDA.
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. Learn how to become a better investor. Get started now with the investing rules that Cramer lays out:
|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|