Even though the market was up today, Jim Cramer said on his "Mad Money" show Wednesday evening that investors need to be taking cues from what was down: commodities such as oil, copper and gold. Inflation peaked Wednesday with the spike in the producer price index, Cramer said. But he said investors should no longer be focused on inflation; they need to keep an eye out for recession. Although we're not in recession mode just yet, he warned that we are in deacceleration mode. Crude oil also wasn't immune from the commodity hit. "It just got too expensive," Cramer said. "All the commodities got too expensive." As commodities cool off, Cramer said it's time to take profits in Phelps Dodge and Valero Energy ( VLO - Get Report). And what to do as the economy takes a breather? Cramer recommended purchasing stocks that can make money even if the economy's in a pinch, such as Google ( GOOG - Get Report), Yahoo! ( YHOO), Altria ( MO - Get Report) and Procter & Gamble ( PG). He also likes UnitedHealth Group ( UNH), Syneron Medical ( ELOS), Humana ( HUM) and Zimmer Holdings ( ZMH).
Shed These ClothesCramer was dour on retailers, though, and said to stay away from stocks like Abercrombie & Fitch ( ANF), American Eagle Outfitters , Pacific Sunwear ( PSUN) and Urban Outfitters ( URBN). Above all, make sure you're diversified, Cramer said -- if you are, your portfolio will be fine during this defensive period. Because Cramer likes tech, a caller asked which tech stocks will do well, and which will do poorly, in the downturn. Cramer said to pay attention to whose products are hot, such as Apple Computer ( AAPL - Get Report), SanDisk ( SNDK), Skyworks Solutions ( SWKS), Intel ( INTC) and Microsoft ( MSFT - Get Report). Another caller wanted to know what specific indicators Cramer sees that indicate the cycle for oil and natural gas is over, and that it's time to get out. "This has a lot to do with discipline. ... When oil represented 5% of the S&P 500, I made a mental rule. When it doubles to 10%, I am going to pull back regardless of where oil is, regardless of where the earnings are, regardless of where the stocks are. ... The bottom line is, we got there this week. We have to ring the register."
The Promised LandCramer says you want to invest in Israel because he believes the evacuation of the Israeli settlers from the Gaza Strip will be peaceful. Israel has low interest rates and falling inflation; furthermore, 1% of the population will need new homes. Cramer is recommending First Israel Fund ( ISL). A caller asked if there were other plays on Israel besides ISL. Cramer said most Israeli stocks don't trade in the U.S., which makes it difficult to invest in them. Those stocks that do trade here tend to be countercyclical. So he is recommending ISL as a way to play the entire Israeli stock market. Another caller asked which stocks to buy as a hedge against the withdrawal going awry. "I would buy Israeli bank stocks if I had the ability ... maybe some construction stocks. But they all (trade) in shekels and I can't follow them. Be simple. Play it with ISL."
BullishCramer was bullish on Martha Stewart Living Omnimedia ( MSO), Apple Computer ( AAPL - Get Report), XM Satellite Radio , Thermo Electron ( TMO - Get Report), Global Signal ( GSL - Get Report), Comcast ( CMCSA), Allegheny Technologies ( ATI), Syneron, Sears Holdings ( SHLD), Google ( GOOG - Get Report), Aramark , Commerce Bancorp ( CBH), Wachovia ( WB - Get Report), Walgreen ( WAG), CVS ( CVS - Get Report), Johnson & Johnson ( JNJ), St. Jude Medical ( STJ), Microsoft, EnPro Industries ( NPO - Get Report), TurboChef Technologies , LSI Logic ( LSI - Get Report) and IntraLase
BearishCramer was bearish on Sirius Satellite Radio ( SIRI), Grey Wolf , Micromuse ( MUSE), Accenture ( ACN), Arris Group ( ARRS), Brunswick ( BC), United States Steel ( X), Adobe Systems ( ADBE), Palomar Medical Technologies , Travelzoo ( TZOO), ISIS Pharmaceuticals , TALX ( TALX), Baidu.com ( BIDU), Centerplate ( CVP), Huntington Bancshares ( HBAN), Fifth Third Bancorp , Unova Symbol Technologies ( SBL), Zebra Technologies ( ZBRA), salesforce.com ( CRM), Rite Aid ( RAD), AngioDynamics , WCI Communities ( WCI), Krispy Kreme Doughnuts ( KKD), Asta Funding ( ASFI) and EnCana ( ECA).
Utilities"Let's say your thesis is -- not mine -- but your thesis is the market is going to tank," Cramer said. "The economy is going to tank. Let's be prepared." Jim says the best move in such a scenario is "boring." "What's the most boring kind of sector you can imagine? Utilities!" Cramer's favorites are laggard utilities, such as Xcel Energy ( XEL), Pinnacle West ( PNW) and DTE ( DTE). These companies have good fundamentals and are also excellent takeover targets. They're also nuclear energy companies, which with oil at $65, is bullish for nuclear energy.
Getting Aggie With ItJim Cramer had Martin Richenhagen, CEO of Agco ( AG - Get Report), as a guest on the show to ask if it was seeing the same weather-related problems as Deere ( DE - Get Report). "We are certainly facing a problem," Richenhagen said. Have numbers been taken down enough, asked Cramer. "We are fine, I think," said Richenhagen. "Weather in the ag business is always a problem. You have to put reserves in your plan to overcome those situations." Cramer said to avoid the sector and not try to bottom-fish in Deere. Finally, Cramer said Nordstrom ( JWN - Get Report) reported a "terrific number" after the close and Harman International ( HAR), which makes high-end stereo equipment, also had good earnings. "The high end is preserved. It's the middle-range -- the Wal-Mart ( WMT) range -- that worries me. So, let's get a little defensive."
|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|