Don't expect the "absolutely brutal" action we saw in the stock market today to be over just yet, Jim Cramer told viewers of his "Mad Money" TV show Tuesday. "But before we damn the whole market, let's remember what were damning," he said. "The mortgage weakness has spread to the market so quickly because traders are closing out of everything." Instead of distinguishing between stocks, market players are selling all of the stocks in the S&P 500 or anything related to it, Cramer said. Although the subprime loan issue is "a problem that is not going away in that sector
A Protective Smokes ScreenPeople need to be playing defense here because it's the only way to ride out the "hideous" market and "try to profit when most stocks are getting creamed," Cramer told his viewers. Defensive, he said, means secular growth stocks or companies that do well no matter how bad the economy is. There is nothing more defensive than cigarettes, "not even in the truly horrible, apocalyptical crisis known as subprime lending," Cramer said. And Altria's ( MO) "when-issued" shares are his No. 1 pick in the tobacco industry right now, he said. Altria's when-issued shares, trading under the ticker MO-WI ( MOWI), are the shares market players can purchase here without dealing with Altria's spinoff of Kraft ( KFT), Cramer explained. "You're buying pure Philip Morris if you're buying MO-WI." Further, he believes people should get in ahead of March 30, which is when MO-WI will rejoin Altria. Cramer said he believes the when-issued stocks are "great," and although there's nothing so bad about Kraft, "there's just no reason to own it here." If people want food stocks, he suggested owning General Mills ( GIS), which has been "doing fabulously," Kellogg ( K) or even Sara Lee ( SLE), all of which have "more consist and exciting growth than Kraft." Plus, not only does Cramer consider Philip Morris a best-of-breed play on cigarettes, but also, in numerical terms, shareholders of MO-WI get a higher dividend with the company.
Takeover Rumors: Alcoa, DowAlthough investors shouldn't take stock tips seriously, rumors can make people some mad money if they know what they're doing, Cramer said. On Feb. 26, there was a story in a British newspaper that said Dow Chemical ( DOW) could be a target for a private equity buyout, Cramer said. And shortly after, there was another rumor about how Alcoa ( AA) could also be a takeover target. Both of these rumors have "credence," Cramer said, and after today, the private equity guys will be all over Dow and Alcoa because they, unlike those that have been selling everything, "know everything is not linked to mortgages." Moreover, Cramer said he wouldn't have recommended the stocks if their fundamentals were bad -- but the fundamentals are actually good, and both stocks are worth buying even without the rumors. Plus, as an added incentive: "These two stocks could be where lightening is about to hit," he said. There is speculation that the big private equity firms could take Dow out at $60 a share, Cramer added. On top of that, at this level the stock has a 3.5% yield and the company has been raising prices and lowering costs, he said. Dow closed Tuesday's session at $42.94. Concerning Alcoa, Cramer said BHP Billiton ( BHP) and Companhia Vale do Rio Doce ( RIO) are rumored to have been looking at it as a prospective target, but neither of them has approached Alcoa's board yet.
Invest in Comcast's SpendingCramer welcomed Comcast ( CMCSA) CEO Brian Roberts to the show and asked if people are right to think that Comcast upped its capital expenditure in response to increased competition from Verizon ( VZ). "We upped our spending because people are buying our new products in record numbers," Roberts said. "We're selling 50,000 phone subscriptions a week." "Because we're going to sell 30% more new products than we did last year, it costs some money," the CEO continued. Cramer asked if Comcast's big capital expenditure spree will keep the company from buying back stock. Roberts said he does not expect any change in the company's plan to continue to repurchase shares. "We have bought back almost 10% of stock in the last two-and-a-half years, and we're going to continue buying back stock," Roberts said. Cramer advised viewers to pull the trigger on Comcast and called Roberts "money in the bank." To view Cramer's interview with Brian Roberts, please
Lightning RoundCramer was bullish on Apple ( AAPL), Yamana Gold ( AUY), Alliant Techsystems ( ATK), General Dynamic ( GD), Lockheed Martin ( LMT), Genentech ( DNA), Gilead Sciences ( GILD), Celgene ( CELG), Genzyme ( GENZ), Microsoft ( MSFT), Diamond Offshore ( DO), GlobalSantaFe ( GSF), Transocean ( RIG) and Garmin ( GRMN). Cramer was bearish on SAIC ( SAI). For more of Cramer's insights during the Lightning Round,
Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.