- a good level to buy soft goods,
- Google's China standoff, and
- opportunities in odd places.
A Great Opportunity in Soft Goods
Posted at 11:13 a.m. EST, Jan. 11, 2009 The disparity between the performance of the cyclical -- as delineated by the Freeports ( FCX) and Honeywells ( HON) of the world -- and the Procters ( PG) and the Pepsis ( PEP) and the Cokes ( KO) is pretty historic, as anyone who maps out the CYC vs. the CMR (Morgan Stanley Cyclicals Index vs. MS Consumer Index) knows. I find this disparity a little too steep right now in that the values are rapidly appearing in the soft goods, but it doesn't matter -- this is the beginning of the year and the cyclical beat does go on. However, I think it is important to note that the big-cap soft-good stories simply aren't that expensive, especially vs. their cyclical brethren. It is almost as if there is a huge source of funds going on, which must be totally mystifying to those who focus on the employment reports. In the past, when we got this incredible inability to create jobs, we would have been lapping up the stocks that are down and selling exactly what's going up. The counterintuitive nature of this move must be driving the bears batty. To me that's just an opportunity. Does anyone think that Procter -- with its huge restructuring and dollar tailwinds -- will do badly? Does anyone think that Pepsi is about to miss its quarter when it has already shaded its earnings and has the big deal closing soon? Does anyone really think that Coke's doing badly? I am calling for a mixed market approach here. I really like the steel and the autos and the aerospace plays. But I would much rather buy P&G right now. That's where the bargains are, not in the cyclical. One other thought: The White House is deaf, but not totally deaf. I suspect that jobs will be a major focus even though the president seems incapable of doing anything but health care for now. Maybe that, too, is a reason why P&G has no mojo whatsoever. At the time of publication, Cramer was long Honeywell, Procter & Gamble and Pepsi. > > Bull or Bear? Vote in Our Poll