Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
  • when to look overseas,
  • squeezing the shorts, and
  • the importance of being well-capitalized.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


Time to Start Looking Outside the U.S.
Posted at 11:12 a.m. EDT, July 13, 2009

As I analyzed my daughter's Uniform Gifts to Minors numbers this weekend, I had a sickening feeling of "Why bother to put more money in right now?" The headlines are all so bad. Frankly, every headline is bad. I have not read a single positive piece about the economy in this country in the last month. It is as if nothing good is happening anywhere in the economy. Defaults on the increase, unemployment on the increase, taxes on the increase, orders on the decrease.

Why bother?

Then I thought again about it and said, "OK, I knew enough not to put money in for the last two years. I dodged a big bullet." But is the gun still firing? Are we still in the cross-hairs at Dow 8100 that we were at Dow 13,000? 12,000? 11,000? And so on.

And, heck, she's 15 years old. You have to view us as if we are Japan in 1991, with so much more to fall.

Will we be in this situation for the next six years, the time frame when I envision my daughter having the money?

Sure.

Could be.

But that's a bigger risk than not contributing or trying to time it for 666 on the S&P 500, the generational low that Doug Kass called and that Rick Bensignor acknowledges this morning.

So then the discussion becomes, where do I put it? The money's at Fidelity. I have the fund in Contra, Equity Income and Blue Chip Growth. Frankly, I don't have any desire to increase any of those holdings.

I could easily augment any of those. But you know what? I think that the debate here isn't putting more in; I have the exposure. The debate is, do I put more money in this country? The negative headlines are about this country. I believe this country will be range-bound for some time.

To me, it is time to diversify away from this country for that very reason. I have said over and over that you should be increasing exposure globally.

So, here's what I am going to do. I am going to put the next contribution into the Fidelity Diversified International Fund, a nice mixture of stocks from around the globe, from Nestle to Telefonica to Toyota ( TM) and some Canadian companies.

Cop out?

Perhaps.

But I have not lost faith in equities as a class. I have lost faith in just being in America. We have too much wrong. Others have too much right.

The solution: put more overseas. That's what I am doing. And I am doing it now.

At the time of publication, Cramer had no positions in stocks mentioned.

RealMoney Barometer Poll
1 What would best describe your stance heading into the coming week of trading?
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2 Which of these sectors do you think is set to move up in the coming week?
3 Which of these sectors do you think is set to move down in the coming week?

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The Big Squeeze
Posted at 4:32 p.m. EDT, July 15, 2009

Energy and materials? Caterpillar ( CAT)? What the heck? How can these be rallying so hard? Perhaps because they were such great shorts last week.

We have seen this pattern a gazillion times. The market gets rocked for four weeks and suddenly the bears come out of the woodwork and begin to short everything that's not nailed down. They use triple-leveraged products. They buy a huge number of puts. They operate on anything and everything.

We saw huge put-buying in the Oil Service HOLDRs ( OIH) and the banks. Remember that many of them had broken down to the levels where their secondaries had been put on or below them, with BB&T ( BBT) and Wells Fargo ( WFC) hanging by a thread and PNC ( PNC) really breaking down. Not only that, we had Capital One ( COF) getting crushed.

We got an interview with Ken Chenault from American Express ( AMX) where he said simply things aren't getting any better. He would not even endorse the "less bad" thesis.

And the presumption going into earnings was that they would be disastrous -- everything from the big guys like Intel ( INTC) to little guys like Bemis ( BMS) and W.W. Grainger ( WWG) to cite two stocks that were better than expected.

The Caterpillar and Google ( GOOG) situations were looming large going into yesterday's session. These companies were delivered what looked to be knockout blows by analysts off of weak earnings prospects.

The stocks are rocketing today. Can you imagine how many people might have bought near-term puts on these?

We also had a situation yesterday where Goldman Sachs ( GS) had to report a huge quarter to beat expectations built up by Meredith Whitney's upgrade. They did it, and initially it didn't matter. Now people are recognizing that $30 per share in earnings could be doable next year because of sharetake. Even I, the biggest bull on the Street, didn't expect this rip-roaring trade today.

We've got a real squeeze going here, a gigantic one.

In other words, it isn't just buying -- it's short-covering.

One last thought: The number of bears shot up huge week over week. That's major. And it helped to get this market roaring today, as these days when bears take action, don't sit on the sidelines.

At the time of publication, Cramer was long Goldman Sachs and Wells Fargo.


The Capitalized and the Dead
Posted at 1:37 p.m. EDT, July 16, 2009

JPMorgan Chase ( JPM) CEO Jamie Dimon's admonition about regional banks' coming problems with commercial real estate, highlighted on his excellent conference call this morning, is a reminder that you have to own the best capitalized regionals or you could run afoul his dictum.

These include First Niagara ( FNFG), People's United Financial ( PBCT), NewAlliance ( NAL) and Glacier ( GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

Where is commercial real estate clustered? Often it is in small savings and loans that don't matter. Sometimes it is in banks like Corus ( CORS), which is a huge condo developer in Florida.

Corus is a helpful analogy here. Even though it is pathetic and is offering the second-highest-yielding CD because it needs to fund its awful operations with hot money. (By the way, if you are desperate for yield, Sheila Bair's allowing Corus to pay these high rates so why not take advantage of them?). There are bidders, shrewd bidders, who are willing to buy the assets of the bank. According to The Wall Street Journal, Starwood Hotels & Resorts ( HOT) is interested and that's a real savvy buyer.

The trick is to recognize the walking dead from the robust because the robust will win, especially now that we see the government is willing to let a TARP taker, CIT ( CIT), go belly-up.

That could mean that Zions ( ZION), Regions Financial ( RF) or even Suntrust ( STI) could be in the crosshairs of commercial real estate.

That's why you stick with the small regionals that have paid back TARP or had no need for it.

That way you can sleep at night.

At the time of publication, Cramer was long JPMorgan.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Corus to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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