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Friday, 04/04/08
Posted 04/06/08, 11:55
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Friday, 04/04/08 |
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Dow Jones: |
12,609 |
- 16 |
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NASDAQ: |
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2,370 |
+ 7 |
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S&P 500: |
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1,370 |
+ 1 |
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Opening Segment 1
Title: |
'Dividend & Conquer'
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. . . .
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Featured Stock(s): |
Dow Chemical Co. (DOW)
Permian Basin Royalty
Trust (PBT)
World Wrestling Entertainment
(WWE)
CPFL Energia S.A. (CPL)
HCP, Inc. (HCP)
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: It
looks like we're in for a
period of incredibly-low
interest rates...
and low economic growth...
if we get any economic
growth at all... a
prospect that seems even
less likely, after than
incredibly-pathetic
employment number that we
had...
Boy, that was really
amazing wasn't it?
But don't forget, it's a
bigger economy, so we
shouldn't really freak
out, but it does mean that
interest rates are not
going up.
So now we've got to figure
out how to make some money
safely in this
environment...
Stocks with big
dividends...
. . . .
.
Tonight, I'm taking it a
step further...
I'm going to show you how
to build a diversified
portfolio of
high-yielding stocks...
because you don't want
just one stock... when a
whole portfolio of stocks
will let you sleep at
night.
Some people want a
portfolio where caution is
built-in... No
portfolios are worry-free,
because no stocks are
worry-free... but this is
a lot less worried
portfolio...
It's basically a portfolio
that has more of a safety
net behind it... than one,
say, made up of
First Solar, Inc. (FSLR),
Apple Inc. (AAPL),
and
Research
In Motion (RIMM)...
This high-yield portfolio
is good for an IRA, or for
someone who is risk-averse
and isn't comfortable with
rapid-growth stocks that
can go down a lot...
I always say... you've got
to know what you like...
. . . .
.
I think you want stocks in
five different sectors,
but they all need to fit
the same criteria...
They must have high yields
that are also safer at
this time, and have a
reasonable chance of being
raised... that means the
dividend is raised... in
the not-too-distant
future...
We like these features in
a world where interest
rates are low, and staying
low... meaning you
can't get a good cash
return, okay?...
You can get 3% on a 1-year
CD and, after taxes,
that leaves you with a
pathetic... pitiful
2.1%... And, at the same
time, I like big
dividends, where economic
growth is slow or
non-existent...
because, in a low-growth
world, you want stocks
with stability and
consistency...
Remember, we're not trying
to hit home runs here...
we just want to get on
base... and that's exactly
what I think my high-yield
portfolio will do for
you...
. . . .
.
Where to start?...
How about an
industrial?... Let's
start with
Dow Chemical (DOW)...
Why?... Because, even
though the financials are
in agony, there's still a
real economy just chugging
along... where real
companies are making real
money, and DOW is one of
them... A 4.2% yield...
much more than you can get
from a
CD... and we know that
the dividend should be
safe, because DOW will
have the cash flow to
cover it.
65% of DOW's business is
in
ROW, rest of world...
which is a lot healthier
than the U.S. economy...
. . . .
.
And you'll need some oil
exposure, of course...
And I don't think the high
price of crude will go
away anytime soon...
Remember, we're using a
$125 target in
Cramerica... Here I
like Permian Basin
Royalty Trust (PBT)...
PBT... a U.S. energy
trust... 50/50 oil and
natural gas...
I believe this is the year
of natural gas. I
think you want that kind
of exposure.
PBT has a mammoth 9.8%
yield and, because it's an
energy trust, you will
have to pay regular taxes
on your dividends... not
the more favorable 15% tax
rate...
The easy way around this
problem is to make this
dividend portfolio your
IRA or your 401k... Then
you won't have to pay any
taxes on the dividends,
until you withdraw your
money when you retire...
letting these huge yields
compound over and over and
over again every year...
. . . .
.
I also think you want an
entertainment stock in
here... something
that's not too
economically sensitive...
For this slot, remember, I
brought on Vince McMahon's
wife (CEO)... Yeah, World Wrestling Entertainment
(WWE)...
Don't be a snob!...
Don't miss this one...
I think it's a steal with
a 7.8% yield.
Plus, the company's been
making huge inroads in
Eastern Europe... in
Asia... Hey, they
love pro wrestling over
there... A quarter
of their sales come from
abroad...
. . . .
.
I also want you to have an
electric utility in here
too...
I need relatively safe, I
need reliable, I need
boring... Now, of
course, we can go with my
stock of Penn State...
We're going to go with
CPFL Energia S.A. (CPL)...
This is large electric
utility in Brazil...
Let's just say it's more
prudent than the United
States...
Unlike its counterparts in
the U.S.A., it is still
growing... You get a
5.9% yield, along with
dividend increases, as I
expect CPL to continue to
take market share, in
Brazil's growing
electricity market.
. . . .
.
Finally... let's round out
the portfolio.
I think you want a
healthcare name...
the type of secular-growth
stock that we would
normally go to when the
economy slows down, so
that's why I like HCP, Inc. (HCP),
a healthcare real estate
investment trust (i.e.,
REIT) that owns hospitals, life science labs, and
skilled nursing
facilities.
A 5.2% yield here. I
like this one more than
the other healthcare
REITs, because of the lab
exposure... that's
biotech. And because
it's less exposed to
Medicaid... something that
I worry about, because the
federal government can be
fickle...
HCP yields 5.2%, okay...
And, because it's a REIT,
its dividend will too be
taxed at a normal rate, so
another one that's good
for your 401k or IRA.
. . . .
.
There you go...
That's your diversified
dividend portfolio;
five stocks in five
different sectors, with an
average yield of 6.6%.
The S&P 500 yields 2.2%...
We're talking about three
times the yield of the
S&P. I think
this portfolio will help
you outperform the
average, in a time when
unemployment's going
higher, the economy's
slowing down, and interest
rates are low...
After taxes, you still
have a 4.7% yield.
But I'd recommend putting
these stocks in a 401k or
an IRA, so the dividends
can compound over time,
without the tax man taking
his cut...
. . . .
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The Bottom Line!:
Right now, I don't think
there's anything better
than a stock with a high
yield... Now you've got five of them... five
diversified names...
Dow Chemical Co. (DOW),
Permian Basin Royalty
Trust (PBT),
World Wrestling Entertainment
(WWE),
CPFL Energia S.A. (CPL),
and HCP, Inc. (HCP).
Hallelujah... you've got a
worry-less, high-dividend
portfolio.
. . . .
.
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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DOW |
38.85 |
na |
Dow Chemical Co. (DOW)
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PBT |
23.04 |
na |
Permian Basin Royalty
Trust (PBT)
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WWE |
18.44 |
na |
World Wrestling Entertainment
(WWE)
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CPL |
71.01 |
na |
CPFL Energia S.A. (CPL)
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HCP |
36.17 |
na |
HCP, Inc. (HCP)
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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Final Segment
2 Title: |
'Mad Mail'... |
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. . . .
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Featured
Stock(s): |
See comments below... |
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After this segment, you
can see Jim's
Sudden:Death picks
here... |
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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DAR |
12.78 |
na |
Mad Mail
Darling International Inc.
(DAR)
Q:
I first heard
you on Howard
Stern a few
weeks ago, and
though you were
a great guest.
I then started
watching Mad
Money and find
the show to be a
wonderful
learning tool.
I wanted to get
into the stock
market as
another form of
investing in my
future. My
question for you
is, do you
recommend a new
investor to the
market to invest
their money in
smaller value
solid stocks
like DAR so they
could buy more
shares, or buy
fewer shares
high value
stocks like
Goldman Sachs (GS*)?...
JJC:
All my books
say the same
thing... and the
show says the
same thing...
Your first
$10,000 is
(invested in) an
index fund.
You've got to
learn how the
stock market
works. DAR
is a very
speculative
stock. We
happen to have
made a lot of
money for people
in that one, but
we could have
lost it.
It's
speculation.
GS* is a good
stock to buy one
share of... But
the most
important thing
you need to know
is... until
you've done the
homework...
unless you have
the time and
inclination...
which I call one
hour per week
per position...
mutual funds,
mutual funds,
mutual funds...
I have the show,
because a lot of
people don't
want mutual
funds... they
want to learn
how to pick
stocks.
That's fine.
The first
$10,000 is in
index funds.
We don't fool
around on Mad
Money...
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GS |
175.40 |
na |
Mad Mail
Goldman Sachs (GS*)
See DAR comments
above for:
GS*
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[
end of final segment ]
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Go to the SUDDEN:DEATH
SEGMENT from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
tonight's show stocks
here >> |
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Symbol keys: |
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A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
of stocks
here >> |
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Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself. |
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Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself. |
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about. |
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Definitions of key phrases
used by Jim, known as
"Cramerisms": |
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Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back... |
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Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you. |
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Definition: 'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock). |
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Definition: 'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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See more
"Cramerisms" & other
financial phrases
here >> |
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Helpful Websites: |
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See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
jim-cramer-charitable-trust-stocks.com |
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See the stocks currently
known to be in Warren
Buffett's portfolio
of
stocks at:
warren-buffett-portfolio.com |
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Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
StockHomework101.com
This site is coming soon.
Thank you. |
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FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
Fast Money Recap - Trades
for next day...
Compare these picks to Jim's
comments for the same
stocks. |
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© 2005-2007 MadMoneyRecap.com ■
Important disclaimer: This site is
not affiliated with Mr. James
Cramer, and is not associated with
any television networks or
broadcasts. Please note that all
thumbs up or thumbs down
indicators are not always clearly
indicated on the show and are
interpreted by us as accurately as
possible. Some comments have been
edited for brevity and clarity,
and extraneous material omitted. Please rely on watching
the show yourself, doing
your own homework,
and reading the text of the
comments to draw your own
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on this site should not be used to
make investment decisions and
accuracy, although attempted,
cannot be guaranteed. Please
consult with your own financial
advisor for professional advice. |
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