Jim Cramer made a big call this week. He told fans of his “Mad Money” TV show that the housing market is set to bottom in the third quarter of 2009. That call has created quite a bit of controversy, but Cramer isn’t changing his mind. He explained that the charts of some major homebuilders are forecasting the end of the housing depression.
Cramer might not be an everyday chartist, but he knows that technical analysis at times can be useful. He has no problem using any market tool that could give him an edge when guiding viewers toward solid investment ideas. That’s simply what dedicated Wall Street professionals do.
Recently, Cramer warned investors to avoid hurricane stock plays and a group of financial stocks. Here are some Cramer highlights from over the past week as aggregated from his RealMoney blog posts (these blog post links require a RealMoney subscription).
Cramer’s Market Lies: Is the market action telling investors lies? Cramer thinks so. In a August 25 blog post, he wrote: “The market's telling a lot of lies today. All you have to do is look at the stocks that are providing the upside, on a percentage basis, to whatever strength there is to the S&P 500.” Cramer’s Market Lies include Citigroup (C) and MBIA (MBI).
Cramer’s Hurricane Stocks With Downside Risk: Cramer thinks the hurricane trade is a sucker’s bet. In a August 27 blog post, he wrote: “It's not a way to make money. It is a way to lose money. You have to sell into the run-up (as I have been doing all morning for ActionAlerts PLUS).” Cramer’s Hurricane Stocks With Downside Risk include Apache (APA).
Cramer’s See-Past-the-Gloom Stock Picks: Cramer feels that investors need to look past the negativity in the market right now. In a August 25 blog post, he wrote: “Look, it's obvious that we are in the "two steps forward, two steps back" stage of this market, the most beleaguering kind. Best to pick some spots right here.” Cramer’s See-Past-the-Gloom Stock Picks include Qualcomm (QCOM) and Apple (AAPL).
Cramer’s In-the-Ring Stocks: Cramer introduced a segment on the “Mad Money” TV show called “In the Ring.” For this segment, Cramer awards points to stocks based on criteria he said Wall Street money managers use when evaluating a company. On Wednesday’s show, Cramer told viewers: “Walgreen (WAG) comes out on top 7-5. This is not a market that values complexity or poor execution, and CVS (CVS) unfortunately has both.” Cramer’s In the-Ring Stocks include Pfizer (PFE) and Home Depot (HD).
Cramer’s Own List of Banks in Trouble: Cramer has put together his own list of banks that he feels are in serious financial trouble. On Tuesday’s “Stop Trading!” segment on CNBC, Cramer told viewers: “Each of these banks is going to swear up and down that they're in good shape.” Cramer’s Own List Of Banks In Trouble include Corus (CORS).
Cramer’s Housing Bottom Stocks: Cramer thinks the housing market is set to bottom in the third quarter of 2009, based on his analysis of the charts of some major homebuilders. On Tuesday’s “Mad Money” TV show, Cramer told viewers: “The charts clearly show the top of the market in July 2005, one year before the 'beginning of the end' in July 2006." Cramer’s Housing Bottom Stocks include Toll Brothers (TOL).
(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned Qualcomm for his Action Alerts PLUS charitable trust.)
Posted on Aug. 29, 2008
