People might get angry at oil companies and government officials -- and even car companies -- in the hope that the anger will fester into something more and cause the price of oil to go down, Jim Cramer said on his
"RealMoney" radio show Monday, but it doesn't look like oil is going to quit. The U.S. consumes the most oil on Earth, with China coming in second place. Yet, Massachusetts' governor is against the planned liquefied natural gas plant in that state, he said. In addition, Cramer said Nigeria, which is the fourth-largest producer of oil, has become much worse, with more workers getting captured and more destruction taking place. The companies that drill in Nigeria are going to pull out, he said, adding that Venezuela and Iran, which met last week, are trying to make us feel insecure about our oil supply. There has also been much hoopla over alternative energies, Cramer said. Although ethanol is at 50 cents a gallon, we can't have it, since the government is blocking it. Supply is the problem here, he said. Even though gasoline is at $3 a gallon, people continue to use it more and more and are cutting down everywhere else. Demand is not shrinking, he said.
Natural Gas GuzzleAlthough the market is full of people who bet against the market, short-selling is a fairly difficult and risky practice, said Cramer. An example of where short-selling is backfiring right now is natural gas. Natural gas is en fuego today, as it has been for the last 10 days, he said. There are people who believed that natural gas would only go down because they thought that there was plenty in storage, but that notion is wrong, Cramer said. In fact, natural gas is difficult to store.
In addition, the inventory of oil does not change the price of natural gas, he said. "We've been hot in this country for 10 straight days, and that's what's causing the surge of natural gas," Cramer said, adding that gas is up more than 50% in two weeks. The rally we are seeing in natural gas is for real, he said, predicting that Chesapeake Energy ( CHK), which was recently at $33.20, will go up to $35 and Devon Energy ( DVN), which Cramer owns for his charitable trust,
Action Alerts PLUS , will go from $64 to $70. Referring to an interview he recently caught on a Bloomberg weekend wrap-up program with a Texas Instruments ( TXN) executive, Cramer advised people that although everybody has turned negative on the tech sector, there might be some money to be made in cell phones. When the interviewer asked the executive about cell phone sales, the executive said that there has actually be an acceleration in business for its three main customers: Nokia ( NOK), Sony Ericsson and Motorola ( MOT). Cell phones are better than TVs and PCs, Cramer said, while recommending that his listeners keep an eye on cell phone companies. While people might believe that the current situation is favorable for retail stocks, Cramer said they are a horrible place to be if we get into a recession, which could possibly happen. People are not spending less at the pump, so there has consequently been a cutback in retail, Cramer said. If market players believe that the back-to-school season is going to be good, he said J.C. Penney ( JCP) is the way to play it. Action Alerts PLUS .
Cramer's CallersAlthough Yahoo! ( YHOO) has delayed its search engine, when it debuts, its price it going to go up, said Cramer. Cramer owns Yahoo! for his charitable trust,
Short-term, Cramer predicted nada from Yahoo!, but said in six months it could go back to $30 to $31. Recently Yahoo! was at $27.21. When a caller inquired about Activision ( ATVI), Cramer recommended getting into Electronic Arts ( ERTS), which is down big, instead. Cramer told a caller that ABB's ( ABB), common stock is for him, but that he would not endorse a call option on the stock. Cramer owns ABB for his charitable trust,
Action Alerts PLUS . ABB reported a monster quarter last week and is cheap, he said. Cramer said he believes that Sirius Satellite ( SIRI) is a situation where CEO Mel Karmazin seems to have it under control and that Karmazin will take the stock up tomorrow. He said Sirius could go up to $5 over the next few days if Karmazin tells a good story, which Cramer believes he will. Sirius was recently trading at $4.36. When a listener asked about Conexant ( CNXT), Cramer said that the company had a disappointing quarter, and that it needs to fix its balance sheet. Although Cramer said he doesn't believe that the stock deserves to be where it is, Conexant isn't the place to be for an investment, he said. Cramer told a caller that Microsoft ( MSFT) will not move until there is a definitive date as to when Vista will move. Other than Microsoft, all PC companies have been terrible, but Microsoft has not been terrible because of stock buyback, said Cramer. He told another listener that when Vista ships, it will also help Intel ( INTC), and said that he would buy Intel because it's too cheap. There is no need to wait until CSX ( CSX) splits to buy it, Cramer said. He told a caller he would buy it now because it has had active buyback, and the management is very pro-shareholder.