- the hazards of broad unionization,
- housing's bottom, and
- how to beat this market.
Broad Unionization Would Hammer the Stocks
Posted at 2:19 p.m. EDT, March 24, 2009 What happens if the pro-union plans of President Obama go through Congress? What happens if secret ballots and quick elections occur? I think that Wal-Mart ( WMT) would get unionized, eliminating its competitive advantage. More important, I think that we could see major unionization efforts at large banks, chiefly by underpaid tellers at Citigroup ( C) and Bank of America ( BAC), something that could be a big setback to attempts to rein in costs. We all know that if banks are going to keep costs down, the last thing they need is to be unionized. I worry that this drive could really hinder the next leg up of the banks, if there is to be one. I am surprised that no one is talking about this as a risk factor to stocks. I think, regardless of how you feel about unions, a teller drive and a Wal-Mart union drive are NOT in the numbers. I put it out there to keep on your radar screen because the return of union problems away from the auto companies is something that's been so long ignored that it will probably really take people by surprise... At the time of publication, Cramer was long Wal-Mart.
Housing Is Bottoming, and It's Providing a Floor
Posted at 8:37 a.m. EDT, March 25, 2009 Bob Toll of Toll Brothers ( TOL) says it right: Bernanke and Geithner and Obama have made you seem crazy if you don't buy a house now. They are throwing so many incentives your way and the housing companies are so desperate to sell with special features thrown in that you have to wonder why you wouldn't buy right now in most areas, simply because you have to wonder how much better it is ever going to get. You are competing against no one, the seller is desperate for you and will make things as easy as possible for you, the rates are the lowest in our lifetime, when you add in the perks and the tax breaks, the houses are back to levels that are before the housing boom. It is a kind of "what are you waiting for?" situation. I know that mortgage availability was supposed to be an issue, but it is an issue only if you are not willing to put down money. But if you have $60,000, you can buy a $300,000 house. That's simply reasonable. Of course, some areas are not done going down. We all know that. But many others are. Some people are going to lose their jobs. Many others aren't.
How to Beat This Market
Posted at 5:10 p.m. EDT, March 26, 2009 Unless you are fully invested only in the economically sensitive stocks, you simply can't beat this market. You need steels, you need machinery, you need fertilizers, you need high energy retail and you need expensive tech. It's tough to be that well positioned.