Jim Cramer's Best Blogs

NEW YORK ( TheStreet) -- 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:
  • why inflation is not a serious issue;
  • obvious signs of a housing recovery; and
  • how to buy McDonald's and Nike.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


Inflation Is Just the Latest Bugbear
Posted at 11:21 a.m. EST, Thursday, Jan. 6

We are not going to get a spike in the dollar and a spike in inflation. A stronger dollar is inherently deflationary, especially one that is being driven by a perception that Congress has gotten religion and doesn't intend to let the budget deficit get as out of control as it has been.

But this brings me to a bigger issue, one that I addressed with the always-excellent Alix Steel yesterday: There has NEVER EVER been a moment where there was something NOT wrong. There is always a wrinkle. There is always a negative. Right now it is commodity inflation. That's' the buzz.

Look, commodity inflation is certainly not a good thing. But the cost of commodities even in cereal ( General Mills ( GIS) was upgraded yesterday because the analyst wanted to "embrace" inflation) is more oriented toward transport costs, not grains. It is true that Family Dollar ( FDO) cited freight costs as a reason for its disappointment yesterday, but the most salient reason is hardly inflationary: lower prices for everything, lower than they expected to get! And a wealthier consumer that is starting to shop at better places. As an aside, I think that the retail sales numbers are very distorted by the loss of a whole weekend that would normally be extremely important, because of the snowstorm.

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As much as I think that we are becoming a more industrial country again, better at manufacturing and exporting than we have ever been, we are still mostly a service economy. The cost of labor has definitively not gone up, and I will be worried when we see rampant wage inflation. We aren't. We may have the most slack vs. sales since 1929! We also don't include the cost of housing in these indices, and the same yammerers about inflation tend to be the same people who believe your house is about to drop 25% in value.

Remember, the food inflation we are seeing is a combination of weak harvests and strong middle-classification of whole nations like Brazil, India and China. The copper inflation is caused by the need for the new middle class to buy appliances and the builders who need to construct hotels and office space to equal the demand for new business. We have to pay the price of food inflation until the harvests get better, which is why we own Deere ( DE) for Action Alerts PLUS and why we believe in the fertilizer stocks so passionately.

Stronger dollar. Deficit hawks. Service economy. Lower wages. Lower home prices. Vs. grains? Cotton? Copper?

Inflation?

Oh please.

Random musings: The CBOE is going to apply its VIX methodology to the volatility in five key stocks -- Apple ( AAPL), Amazon ( AMZN), IBM ( IBM), Google ( GOOG) and Goldman Sachs ( GS) -- starting Friday. One of our OptionsProfits gurus has a piece on it -- a must-read.

At the time of publication, Cramer was long Deere and Apple.


Housing's Big Tell
Posted at 7:04 a.m. EST, Thursday, Jan. 6

It's not a question of when the housing recovery will occur, but how big it will be. That's how I have felt watching the stock market action since the year began.

I use a couple of classic tells to forecast housing sales and values, and they are flashing bright green, really defying gravity in their obvious way of saying, "Housing's back in 2011." This despite the universal, "Housing's the same mess it has always been" rap, as well as the downbeat projections, mostly from the noisy folks at Zillow, many of which do not reflect the hard macro data kept by other entities.

Look at these breakouts we have seen just this year: Whirlpool ( WHR), Lowe's ( LOW), Sherwin Williams ( SHW), Pier 1 ( PIR), Ethan Allen ( ETH), Masco ( MAS), Stanley Black & Decker ( SWK) and even Williams-Sonoma ( WSM) after that disappointing outlook. That's incredible. These stocks are screaming that sales for homes are going higher and that the value of homes is going higher, or you wouldn't be throwing good money after bad.

I really want to call peoples' attention to this Ethan Allen run, especially because shorts are in disbelief about it. You don't go shopping at ETH unless you think your home's worth spending on. The stuff's too expensive, much of it now custom, and the sales are amazingly strong. That's good for the $300,000 home cohort. For the $200,000 home cohort, I look at Pier 1, and its sales are the best they have been since the housing boom -- before the bust -- began. Maybe better. Williams-Sonoma's run is harder to pin down, as it is a Tiffany ( TIF) kind of place. However, its catalogs are a little more downscale. I say the strength reflects good news for all except the lowest-price homeowners and buyers.

Whirlpool's been trying to break out forever, but the housing start numbers have killed it. The WHR move says that housing starts are going to get stronger. I have mixed emotions about that, because I don't want a lot of new inventory, but you have to think that at some point, these homebuilders will want to put up new homes to make money and not just to fulfill credit agreements or, wrongly, try to capitalize on the tax credit stimulus.

Big moves. Don't ignore them. They are screaming that housing has bottomed and is now going HIGHER!

Random musings: I did not mean to slight Weyerhaeuser ( WY) by leaving it out, as lumber does matter, but there's been a spike in all commodities, and I do not believe that WY has yet felt any real boost from U.S. housing.

At the time of publication, Cramer was long Stanley Black & Decker and Weyerhaeuser.


How to Buy McDonald's and Nike
Posted at 4:21 p.m. EST, Tuesday, Jan. 4

McDonald's ( MCD) and Nike ( NKE) fascinate me. Do you know that every time they have had swings of this kind, they have been screaming buys? Every time? Did you know that the rallies typically occurred on nothing but oversold snapbacks, where we only later discovered that things were better and they were buys?

It's so tough to come in when these are down, they just look so terrible. As they always do. What to do? Obviously you would like to buy them and limit the risk at the same time.

That's why I would be a buyer of the McDonald's March 70 calls at $5 and the Nike April 80 calls at $5.95. I think you buy the first tranche right here. And then, if these calls get cut in half, buy a second tranche.

That way, you have very much limited the risk buy, you have a call on several months of McDonald's same-store sales, of which I believe one will break the spell just cast, and with Nike you have the next quarter, with presumably better guidance post lowered expectations.

These two great growth stocks periodically stumble.

That's what these kinds of strategies are about: capturing the rebound while cutting off the downside if the stumble turns out to be a real doozy.

I doubt that it will, but I want only half on, taking the risk that we are near the bottom but leaving room for more downside.

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

Jim Cramer, founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio, Action Alerts PLUS. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.

Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.

Mr. Cramer is the author of " Confessions of a Street Addict," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.

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