Originally published on 1/16/2007 at 4:33 p.m.Intel's ( INTC) a non-starter, to be captured by the $22.5 strike at best. I believe people so much want PC plays ahead of the release of the Vista operating system that they're thinking too hard about this stuff. It's a price war, for heaven's sake, and there are no winners because this price war neither stimulates sales nor takes big market share. In the old days, a price war would have wiped out AMD ( AMD). Not anymore. A price war simply benefits the PC companies, because all of that juicy profit that would have gone to Intel now accrues to the Hewlett-Packards ( HPQ) of the world. I really thought this was obvious. Intel's analogous to its old rival Motorola ( MOT) from when Motorola was a semi company (back when they were rivals for mind share, not market share). Think like Chinatown: "Forget it Jake, this is a price war." Random musings: College students, listen up! RealMoney is offering you something special... a free subscription through May 31, 2007. The only requirement: You must have an email address that ends in .edu. Email email@example.com to accept my personal invitation to come read my blog every day, plus all the other writers on that great site. Pass it on! At the time of publication, Cramer was long Hewlett-Packard.
Originally published on 1/17/2007 at 11:48 a.m. Shhh... There's a quiet bull market going on right now in retail. J.C. Penney's ( JCP) been moving up quietly off of what was supposed to be a weak Christmas. Target's ( TGT) gotten through the $60 barrier, something I didn't think possible not that long ago. Lowe's ( LOW) continues to go up by pennies almost every week. Abercrombie's ( ANF) been on an endless upward creep. Saks ( SKS) is making a good move to recoup the whole ex-dividend price. Costco ( COST) has broken out of the $55 trap. Nordstrom ( JWN) won't quit. Neither will Coach (COH). I don't know anyone who is talking about this run. I know the bears are still focused on Best Buy ( BBY) and Circuit City ( CC). People are ignoring the oil move. That's a mistake. And they are simply paying no attention whatsoever to the statements from Sears ( SHLD). To me, this move could have legs. That's because nobody's behind it. That's the best kind of move. Most of the analysts I talk to in this group just don't believe the move can be sustained. I believe they're wrong. These moves are happening in a vacuum and you don't get the earnings reports until the end of reporting season. By that point, it might be too late. Find your fave now. You know mine's Sears. But Costco's a strong No. 2. J.C. Penney is still in a secular advance, and Saks could still sell itself. At the time of publication, Cramer was long Sears Holdings.
Originally published on 1/18/2007 at 9:03 a.m. Tough to say "Nope, that doesn't work." I remember when Matt Jacobs, my research director at my old hedge fund, would come to me with tech ideas right now, this week of the year, and I would just wave my hand for him to get out of my face. Like, Just get lost, man. Stop trying to hurt me. He took it personally, of course. Who wouldn't? Who would like being told that all of that work on Research In Motion ( RIMM) or Network Appliance ( NTAP) or Western Digital ( WDC) was for naught? But I knew it, because my partner at the time, Jeff Berkowitz, had run the February Goldman Sachs technology conference when he worked for Goldman, my alma mater. The idea of the meeting, held in early February, being the moment that tech had already peaked was so ingrained that while he was at Goldman, he made up yo-yos with the buy and sell points for tech on them. I am not kidding. Yo-yos! It was Jeff who gave me the yo-yo when he started. If he had contributed only that in his 10 years with me, it would have been enough. I kept that yo-yo on my desk for years to remind me no new tech positions now. Sure, some will be built to last. I believe you can buy Apple ( AAPL) because that guidance was just plain insulting. You don't want to leave Microsoft ( MSFT) or Hewlett-Packard ( HPQ) because of Vista. Google's ( GOOG) the most powerful earnings story out there. Cisco ( CSCO)? Immunized by downgrades and some terrific product cycles. But in the end, the yo-yo controls. Tech's to be sold, not bought, right here. It can be traded. Not owned. Not until the dog days of August. At the time of publication, Cramer was long Goldman Sachs and Hewlett-Packard.
Originally published on 1/19/2007 at 8:59 a.m. Trading oil service stocks is never easy. The big swoons -- of which there are many -- simply haven't been something you can recover from. I once made an investment in a hedge fund that got caught in one of these declines, and I lost almost all of my money. When they reverse, oil service stocks are just death stars to your performance. Oil service stocks also almost always swoon before a precipitous decline in crude. To ignore these declines is to believe that this time everything is different and the stocks are just wrong about crude declining further from here. To ignore these declines is to say that the stocks of companies that benefit the most from a sustained rally in crude are telling us that wherever oil is now, it's going still lower. So far, that is right. What's wrong, it seems, is all of the points in the argument for oil that were made during the run. Let's recount them: "China's demand will soon usurp our demand." And don't forget India. This one was so ingrained, so "secular" that I can't believe it has vanished in all of the articles about crude going much lower. And of course, it's still true. "Terrorism has made it so no nation can afford to be caught without crude." If that's the case, why aren't we hearing about it anymore? It isn't like the terrorists have taken a vacation. "Venezuela is unstable and it is our largest supplier." All that has happened is that Venezuela has gotten more unstable. "The majors are running out of easy-to-find oil." This point is more true than ever, as we scrutinize the paltry replacement of ConocoPhillips ( COP). "The alternatives haven't dented how much oil business or autos use." This is more true than ever, that the alternatives are just a lot of hype. I haven't heard much about switching to any non-oil based source. And car drivers in this country haven't massively switched to ethanol. Plus, there turns out to be a corn shortage! "The Saudis are running out of crude." That seems not to be the case. This is the only statement in this litany that has seen a change in how it's perceived. If only one out of six main reasons for oil to rise has changed, and that is only in perception because of the ease the Saudis exhibited when they wanted to pump 3 million more barrels a day, how can oil not stay above $50? I believe the answer is now dawning on us: the speculators. Just like those speculators who took up natural gas led by that cowboy at Amaranth, just like the speculators who went nuts in commodities this time last year, we saw some sort of blow-off in price that took us to levels that were simply artificial. The decline from $77, then, might be considered meaningless because $77 was part short-squeeze, part "we're out of ships to store oil" and part hedge and commodity funds goosing up prices. The long-term trend in crude would indicate this (yeah, I looked at the chart). But if you cross out the $77, you don't get $30 oil. Or even $40 oil. The trend line's actually just a little bit below where we are now. Even when oil goes slightly lower than where it's pricing now, we simply are not going to get cancellations of the magnitude that the stocks are indicating. That's why I ultimately believe it's not too early to buy these stocks, provided you buy the ones with the longest-term contracts because that allows the long-term scarcity of crude -- something that no one doubts -- to work for you. I want to be doubly insulated. I have been buying Transocean ( RIG) for Action Alerts PLUS because not only does it have the longest of the long-term contracts, it has very little domestic drilling, which is perceived as oil service's Achilles heel. Schlumberger ( SLB) reported today, always arguably the best-run company in the industry. I believe that its actions -- dividend boost, reaffirming much higher targets -- are accurate in what they forecast. So, crude was manipulated upward. Like any blowoff top, including the Nazz's, the post-blowoff action in the commodity that blows off is simply horrid and an overreaction the other way. Which is why $40 a barrel oil can't be precluded. But if oil stabilizes in the mid-$40s, I believe the Transoceans of the world, while not continuing to have upside surprises, will generate more cash than any other cohort in the market. That simply has to be worth something, and is not reflected in these low prices. That makes oil service stocks sobering in the short-term. Longer-term, it's hard to stay away. At the time of publication, Cramer was long Transocean.