I'm confused. I did my homework on Tempur-Pedic (TPX - Get Report), and the fundamentals look good. The mattress company has solid profit growth, and I tried out the product at a bedding store! So why, then, are you so bearish on the company?-- Dan from Illinois James J. Cramer: Maybe you didn't see the massive profit warning this company delivered last week? But seriously, I believe this is a broken company, not a broken stock. Even if you don't buy into all of the bearish arguments that my friend Herb Greenberg has about Tempur-Pedic -- and he has exposed many one-trick ponies in the past -- the company does appear to have some problems. With that in mind, stay on the sidelines for now, and wait for the dust to settle.
How do you like US Bancorp (USB - Get Report)? It pays a solid 4% dividend.-- Dan from Fargo, N.D. Cramer: I used to own US Bancorp in my charitable trust, but I'm no longer a fan of the large-cap financials. Even with the company's pledge to return cash to shareholders in the form of dividends and stock buybacks, I believe that earnings will shrink in the financial sector, given the current interest rate environment.
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|