It shouldn't be lost on anyone, either, that the ultimate in domestic-security stocks -- the homebuilders -- are trading at as high as 26 times earnings. No one has said they are cheap at all, even though the market had been willing to bid up D.R. Horton ( DHI) by $2 after its excellent report Friday. Homebuilders, the ultimate in cyclical stocks, trading like growth stocks? Give me a break. The issue for me is that I can make a case about worrying over every stock. I can say that everything is overvalued and that you should own nothing. In fact, the only areas that are truly undervalued are tech, industrial and finance, and they are every bit as despised after this earnings period as they had been before it. They are the only stocks not worth worrying about on valuation -- and, at the same time, they are the killers of performance, as any owner of these names would know. So we either buy expensive stocks or we lose money. All of the wags who say we shouldn't buy the expensive stocks don't seem to mind losing money or falling behind the averages -- because that's precisely what is happening if you own Caterpillar ( CAT) or Dow Chemical ( DOW) or U.S. Bancorp ( USB) and Capital One ( COF) or Avnet ( AVT) or Apple ( AAPL). In every one of these groups, I can pick some winners that have beaten the averages, but they are the diciest even as they are the cheapest. So you can worry about the winners. But I am licking my wounds for owning many losers that are cheap for my Action Alerts PLUS charitable trust. As for the expensive ones? Even after this earnings period they remain the biggest winners, even despite all the hand-wringing and warnings from those who have definitely never bought a stock or who don't care one whit about performance. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL.
Jefferies analysts note that recent construction spending data indicates a cycle rotation away from construction-exposed names and toward industrial- and durable goods-levered firms could be playing out.