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 big banks remain a risk worth taking;
  • one sign that the current market's stronger than we think; and
  • why Joy Global is a buy.

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

A Leap Worth Taking

Posted at 11:48 a.m. EST on Friday, March 2.

Leaps of faith are often what drive stocks. This morning I was talking with David Faber, who revealed to me that the M&A activity has now been reduced to levels we haven't seen since November of 2003.

Dark times.

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Treasury Secretary Tim Geithner wrote a terrific op-ed piece today talking about -- reminding us -- how the banks caused the Great Recession. He's pounding the table not to let up on regulation. He's getting lots of press and airtime for his musings.

We had a big deal today in Yelp ( YELP), which got a lot of people excited. But what's most exciting about it is there's been so little excitement on the stock exchange floor that it stands out.


We have levels of volume that I expect only to see on semi-holidays or the hottest days of summer.

Nothing good.

Yet Goldman Sachs ( GS) and Morgan Stanley ( MS) and JPMorgan ( JPM) remain the places to be. What's going on?

I think that people know these companies are inventive and creative in their own ways. That they will find some way to make money and they are not static operations.

They are all collectively leaps of faith at this moment.

But I think the leap remains worth taking.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long JPM.

The Market's Change of Heart

Posted at 1:58 p.m. EST on Thursday, March 1.

I love it when stocks won't quit that should. It is a sign of a market that's much stronger than we think.

Take Wynn Resorts ( WYNN), which is a company I profiled on Tuesday on "Mad Money," using the terrific work of our own Scott Redler.

We got what some would regard as subpar numbers out of Macau last night that normally would have caused Wynn to get hammered.

But people looked through the so-called weakness of the numbers and recognized some calendar shifts and some difficult compares and decided to excuse them and buy.

We have not had a market that was willing to excuse weak data for some time. That's new for stocks, and very 2012.

Or take Perrigo ( PRGO). You know that I have liked this stock forever, but I feared that this year it could run out of positive news flow, because although many drugs are now slated to go over the counter, I didn't think there would be enough to make a difference, to keep the ball rolling.

I was concerned that now that the economy is getting better, the chance that people will trade back up, or at least stop trading down to house brands, might at last be upon us.

Plus, Johnson & Johnson ( JNJ) replaced its CEO, William Weldon, and he had been Perrigo's best friend, but he was simply completely and totally unable to stop the recalls of so many of Johnson & Johnson's products.

It is clear now that people are willing to overlook all of those negatives and instead seize on a positive that came out of the FDA saying it wants more drugs to go over the counter.

We don't really know more than that, but it has been enough to get the animal spirits going on a stock that blew away the numbers and then went down -- so often a precursor to much lower prices.

We need to recognize these patterns of forgiveness and optimism for what they are: major changes in how the market is viewing stocks. They are what we call "multiple expansion" moves, meaning we are willing to pay more for the earnings than we were before.

Now, if all that was happening was an expansion of the multiples, that would not be enough, and it can be short-lived. Markets that rally only on rising multiples can devolve into the "greater fool" theory, as we saw during the remarkable and ultimately toxic multiple expansion period of 1998-1999 and the first months of 2000.

But multiple expansion on rising earnings coming out of companies like the retailers and the industrials and even the oils can be sustainable and does not lead to the precipice. The same can be said about the banks, where, if you get even slight revenue growth and we are willing to pay for that revenue growth knowing that it can lead to higher earnings, it can be the holy grail of a bull market.

Keep watching this trend. It could lead us to go higher simply because it encourages people to buy stocks. Remember, if you think you are going to be down immediately on a stock after you bought it, if you think that any bit of news can take down your purchase, you are going to be gun-shy. But when you see stocks rally strongly on good news, even if it is somewhat expected, and not go down on just so-so-news, or even go higher on it, then you have a tape that is kind and even enjoyable.

When you have a tape where bad news doesn't create much of a ripple -- witness that Dell ( DELL) is barely down off of a big disappointment -- and when you have a tape where you have better-than-expected news that produces gains like we saw in Gap ( GPS) this morning, then you know that this tape says there's room to make money, and you should fight your way in despite all of the talk of bubbles. If anything, the talk of bubbles is creating the ultimate wall of worry that must be built before we can power still higher from these levels.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

The Foreign Coal Conundrum

Posted at 6:45 a.m. EST on Friday, March 2.

There's something infuriating about the double standard when it comes to pollution in this world, and it's on display gigantically with the prospects of Joy Global ( JOYG).

If you don't know the company, it is largely an exporter of big mining equipment with a decent business in the U.S. I put it that way because Joy's the dominant coal-mining equipment play and coal is in long-term secular decline here in the U.S. But it is in long-term secular boom in India and China, and as CEO Mike Sutherlin told me last night, those two countries alone this year will build as much as a third of our existing coal plant capacity.

I think Joy Global's a buy because of that. The electricity demand soared 14% in China this year alone, and the build out of the Western grid of the country is the biggest infrastructure program in the world. But it is a coal-based program, which means that it will pollute a lot.

We, on the other hand, are willing to force whole industries like the coal-fired plant industry to close because of it. We raise our power costs and we help drive business to where the action is.

It's not unlike the Transcanada Keystone pipeline issue. When we rejected Keystone we acted as if the tar sands oil won't be used by anybody and the skies will be clean.

Of course, that's totally fanciful. Outfits like Transcanada and Enbridge ( ENB) will just pipe it to the West Coast and send it on its way to China. Meanwhile we will keep importing crude from Hugo Chavez' Venezuela as well as from frenemies in the Middle East.

Now, there are lots of niggling issues with Joy Global. They made an acquisition of a company that had quality control problems. The weather was so warm in the U.S. that much less coal was used, something that played a much bigger role in the decline of coal use than the switching to natural gas.

But the main issue is that Joy's basically a play on China's coal demand and Chinese mines and the Australian ones that also help service China's power plants, and, like it or not, that business is getting stronger not weaker. I say like it or not because what you are doing here is betting that China will sacrifice anything, especially air quality, to put people to work. We, sadly, don't make it a high enough priority, and we end up with policies that help export those jobs which, alas, is the key to Joy's long-term earnings story.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

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