The magical bailout-to-be may not be enough to prevent a recession. Despite the bill's passing in the Senate on Wednesday evening, stocks plunged on Thursday. The bailout bill is expected to reach the House on Friday.
Thursday's tumble followed the report from the government of a seven-year high in jobless claims. This isn't good, but it's also hard to believe it wasn't expected.
Meanwhile, it's bad news all around for U.S. factories, where economic indicators were all bearish. Industry pundits are reporting that the sharp decline is a direct result of the credit strain, making it difficult for companies to get loans to improve or expand operations.
Stocks leading us down included General Electric (GE), Intel (INTC), Vale (RIO) and Potash (POT). There were a few bright spots, with Wachovia (WB), National City (NCC) and Atmel (ATML) all spiking.
With this in mind, we thought we'd take a look at some of Thursday's top-searched stocks on TheStreet.com and see what Jim Cramer's had to say about them recently.
These stocks could be in the news for a number of reasons. Some require immediate attention; others may not. Regardless, it never hurts to hear what Cramer (or any of the other professional investors on the site) has to say about them. The key is to gather as much information as you can in order to make the most informed investment decisions you can.
With all the blood in the streets today, there were plenty of stocks to break down. We'll kick it off with Cramer's take on Mosaic (MOS) and other commodity plays.
"Nothing epitomized momentum like the fertilizer stocks. Somehow this totally commoditized industry caught the attention of everyone, as a combination of ethanol demand and worldwide food crisis gave it the hue of a Google (GOOG) or an Intel from years past, coupled with a long-term thesis that felt as though rising prices could always be justified.
But then the underlying product, corn mostly, got crushed, and the economics of the product changed.
Amazingly, few people wanted to believe this trend, even though the whole case for the endless price rises taken by Potash, Agrium (AGU) and Mosaic stood on the issue of higher grain prices. Once that prop was removed, it seemed fairly obvious that the stocks had had it.
But in a testament to the gods of momentum, when I pulled these stocks and put them in the "sell block," something I do every Thursday on "Mad Money," the viewers went nuts and considered in an ultimate betrayal. The anger astonished me, as I had been for these stocks for years, and the gains were stupendous.
Some were angry that I had failed to call a top - frankly, that was just way too hard. Others were angry because the companies had endlessly talked about how inventories for food worldwide were the lowest they have ever been. To me, there was nothing to this one, corn down, and I didn't care where I said to sell 'em, because the trick to commodities is to rack up a big gain and then say "sayonara," not at the peak of the stock but at the peak of the end market. That's the same case for steel, where I missed the top until China stopped ordering.
People have to recognize that when you trade commodity stocks in this era or any era, there is a time to buy and a time to sell. You buy when prices are going up and the end-market takes the pricing. You sell when the end-market balks, not when the companies lower pricing. The latter will always get you out too late."
For more of what Cramer thinks about Thursday's top-searched stocks, including Visa (V) and Research In Motion (RIMM), check out the Cramer's Take portfolio at Stockpickr.com.
(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned General Electric for his Action Alerts PLUS charitable trust.)
Posted on Oct. 2, 2008
