NEW YORK ( TheStreet) -- "Sometimes it doesn't pay to be a contrarian," Jim Cramer cautioned his "Mad Money"TV show viewers Thursday. He said while some have been saying to "buy the banks" since they're so hated and to "sell the techs" as their seasonal strength will never come, both trades have been dead wrong. Cramer said the contrarian view on the banks has been that they're dirt cheap, trading below book value, and are so hated that they have to be a buy at these levels. Yet today, the bank stocks got crushed, even as JPMorgan Chase ( JPM), a best-of-breed bank, reported great numbers. Cramer said the banks stocks, including JPMorgan, have gotten too hard to figure out. Do they have European exposure? How much will new regulations cost them? Cramer said bottom line: Stay away from the banks. Then there are the tech stocks, seasonally strong in the fourth quarter for nine of the past 10 years. The contrarian view was that things are just too bad around the world for that strength to materialize this year. Yet since mid-September, right on schedule, the tech stocks of Nvidia ( NVDA), ARM Holdings ( ARMH), Avnet ( AVT), Red Hat ( RHT) and others have been soaring, outperforming every other sector. Cramer said the strength in tech includes Apple ( AAPL), a stock which he owns for his charitable trust,
A Sell for a Long TimeIn the Thursday "Sell Block" segment, Cramer revisited First Solar ( FSLR), a stock he called the best house in a horrible neighborhood. Cramer placed First Solar in the sell block in September, 2010 at $138 a share. Since then, shares has skidded 60% and now trade at just six times earnings. Cramer told viewers not to be fooled by First Solar's valuation. He said the stock is still a sell, and will not be a viable investment as long as the solar industry continues to struggle. Cramer said that solar companies rely on government subsidies in order to survive and in the current environment of government belt tightening and falling oil prices, the outlook is once again grim for solar. First Solar has been immune to the problems that plagued Evergreen Solar and others that have filed for bankruptcy, thanks to its different technology with gave it stable pricing. But that will now change, said Cramer, as demand is shrinking and price wars will be coming. He said the estimates for First Solar are simply too high. Compounding things further, First Solar derives 46% of its revenues from Germany and another 14% from France, two countries likely to dial back their solar endeavors. In the U.S., Cramer said First Solar won't be able to recognize revenue from its recent big projects until 2013, leaving earnings for 2012 willfully short of expectations. The company will also soon be facing increased competition from China, which is rapidly becoming a low-cost leader. Cramer said the solar industry is a hideous place to be, and First Solar is and will remain a sell for a very long time.
Looking AheadIn the "Executive Decision" segment, Cramer sat down with Don Knauss, chairman and CEO of Clorox ( CLX), a household name that sports a 3.6% dividend yield Knauss said that Clorox will be turning 100 years old in 2013 and is in the middle of its "centennial strategy" of refocusing the company for its next 100 years. He said the company will be focusing on international growth, something that only accounted for 15% of sales a few years ago, but accounts for 21% of sales today. He said nearly 60% of Clorox' international sales at the moment are in Latin America, with another 15% in the middle east. Going forward, Knauss noted that China will be a big market for the company. Knauss also noted that innovation will be a focus going forward. He said the company's namesake, Clorox bleach, is still the best cleaning agent in the world and has save countless lives by helping to prevent infections. Other innovations include a new gel bleach product specifically for high-efficiency washing machines, where pouring liquid bleach has been causing splash problems for years. Knauss also commented on the company's dividend, which is also a focus. He said that stock charts don't include dividend yields, nor reinvested dividend profits, but Clorox has been an excellent investment, even throughout the recession. He said the company will be returning to 3% to 5% top line growth and will be helped by increasing margins from falling commodity prices going forward. Finally, when asked about competition from private label brands, Knauss said that in tough times, consumers go back to what they trust. In the case of Clorox and its family of products, Knauss said the key is to deliver great value, something the company has always done. Cramer continued his recommendation of Clorox.