You Want Some Picks? You Got 'EmOriginally published on Jan. 7 at 1:57 p.m. EST You want something in the financials to take a shot at? You want to buy something down and out that there might be some hope in? (And I am not talking about NYSE Euronext ( NYX), although I think that this is the biggest bet to make right here.) Okay, here it goes: Merrill Lynch ( MER). What's the story? Near 52-week low. Has already raised some capital. Has lots of assets to sell off. And, most important, it is now run by John Thain, who is a really smart, tough guy and a total break with all of the cultures that I have EVER seen at Merrill Lynch. Thain understands what went wrong. He is a visionary about where things are going. He is the ideal man for the job. You have a 2.77% yield that I think is safe. Thain's going to kitchen-sink the losses and lay off tons of people. What's the risk here? I think there could be 5 points down and many, many multiyear points upward. Thain is money. He has always been money. There. That's my pick. Would I buy it myself? NO. But I am answering the demands of readers that I come up with something away from NYX. Now you have my financial. All right, now I will go a step further. You want a down-and-out industrial? I will tell you that GM ( GM) -- which is really moving quickly offshore for sales -- may be the one you want to buy. It has been crushed, cut in half. But it is a much better company than it was last time it got here. It just canceled a big credit line: it didn't need it. The offloading of the majority share of GMAC, which is truly a toxic portfolio, on Cerberus, was a stroke of genius. No one is thinking of buying this stock. No one. (The better piece of paper might be the GPM ( GPM), which is a GM preferred stock that pays you to wait for the turn.) Now you have my industrial. Would I buy this one? If I had a two- to three-year time horizon and like risk? You bet. All right, now tech. Hewlett-Packard ( HPQ) sells at 13 times earnings. This is a company that has consistently made its earnings estimates and has been a very big overseas player that does not deserve to sell at the same P/E as its growth rate. I would like to buy this stock, but I mentioned it on TV, so, as I told AAPlus people, I am frozen. Frankly, it has some immunity at this level. It is still up a lot from its low, but it is only up 8% year over year. That's pretty pathetic given how well it has done as a business. So, Merrill Lynch, GM and HPQ. Down-and-outers worth looking at and worth buying. Random musings: I still like VF ( VFC) here given its preannouncement, but that cohort of Jones ( JNY), Ralph Lauren ( RL) and Liz ( LIZ) is frighteningly awful. Many retailers are trading as if we are going to have failures ... CVS ( CVS) got sold down to $36.50 by desperadoes. Now it is a point from where it was when it was clocked. Patience can be a virtue. At the time of publication, Cramer was long CVS Caremark, Hewlett-Packard and NYSE Euronext.
Stay Away From the Gang of FourOriginally published on Jan. 10 at 9:56 a.m. EST Yesterday's rally began when Erin Burnett, my friend at CNBC, interviewed Ajit Jain, president of Berkshire's ( BRK.A) reinsurance unit, and he said that he is in talks to buy some of the players in the group. That ignited the Gang of Four ( Ambac ( ABK), MBIA ( MBI), MGIC ( MTG) and PMI ( PMI)) and the pin action off that turn spurred a huge short-covering rally first in the financials and then ultimately in the rest of the market.
Cramer: Forget These Four Bond Insurers