Wednesday, 01/23/08
Posted 01/23/08,  11:41 pm ET

(Scroll down to see Jim's comments below)

 
 
Today's date:  Wednesday, 01/23/08

  Dow Jones: 12,270   + 298
  NASDAQ:   2,316     + 24
  S&P 500:   1,338     + 28
 
 
 
 
 
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First Segment
 
 
 
Opening Segment 1 Title: 'Bottom Dollars'

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Featured Stock(s): TJX Companies, Inc. (TJX)
CVS Caremark Corp. (CVS*)
J. Crew Group, Inc. (JCG)
Costco Wholesale Corp. (COST)


See Opening Segment 2, below...

        
JJC:   What do you call it when the Dow loses 320 points the day after a surprise 75-basis-point rate cut, and then recovers to close up 299 points?...  What do you call it?... What do you call a 600-point swing, after re-testing yesterday's lows?...

I know what you call it... You call it a bottom.

The market came back today from the abyss... the same abyss that it toured yesterday... because all the elements of a bottom are in...

Stocks are way too cheap, no matter how you value them...

Stocks are dramatically oversold...

And that always happens at a bottom...

Most importantly, you can see the worry...  How is it demonstrated?...  Well, in my play book, it's demonstrated in not the Wall Street Journal... but the New York Times...

You don't see us, above the fold, on the front page of the Times... and we took it all up... at anything other than a bottom... The best sign of all... 

.  .  .  .  .

We turned a major down day into one with a 299-point gain...

We saw what's known as a whoosh capitulation yesterday... something I call a crescendo selloff... and it was verified by today's action... which will go down in history as a successful re-test...

The re-test means we held yesterday's lows... we got down there... It's a floor now... no longer a ceiling.

That doesn't mean that everything has bottomed...  But we did come back and rally hard today, and you could have made a small fortune, had you put together that buy list that I always urge you to do...

We got 10% swings, and not in middle-cap stocks... You could have bought AT&T (T) at $33.  It went to $36...  How about
Verizon (VZ) down there?...  Did you see Schlumberger (SLB)?...  I mean, c'mon...  These are lifetime swings... from bottom to top today...

And it proves once again that nobody ever made a dime by panicking...  and, if you're ready, and you have your price, and the supermarket, or the retailer, throws the sale, then you could buy it at your price, and that's how great, great wealth is created...  

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Now, you need to know what happens next...  and what to do next, as the cycle changes...

We are at a moment where the bad stocks triumph...

It might seem senseless, or even unjust, to sell the companies that are making so much money...  and buy everything that's been hobbled, wounded and trashed... 

.  .  .  .  .

What do I think you should do?...

We go diversified on this show... we buy a little of this, and a little of that...

But I respect the herd... and the herd of big money says, listen, do some leadership change...  Sell the leaders and buy the laggards...

With the exception of agriculture, which I still believe can fall some more, because it was the last to start falling, the idea of selling the old leadership down here, even though the big institutions say it's right, and I include techs, uh-uh...  No, it seems plain wrong to me.  It's already had the correction, and it's certainly compressed...  Hold onto through the cycle now, if you own those.  They should be swiftly rising, given the Fed's energy, and I think you'll be rewarded, if you buy the shot leadership right here... 

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But stick with the playbook, when it comes to buying the financials and the retailers... Pick one, okay... buy one.

We said they'd bottom when they were cut in half... they were cheap...  The Fed now frantically trying to catch up, before a major bank goes bust...   You have to believe that both these groups will do much better...

My plan to protect the mortgage insurers getting credence at the highest level...  That certainly makes the banks less risky... particularly the ones that did not cut their dividends...  but, unbelievably, I think Citigroup (C*) has bottomed too...

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As for the retailers, I have it first hand that the buying in retail - all that institutional money - is not short covering... It's real!  There's just no stock for sale down at those levels that we saw.  The sellers are all done... another classic sign of a bottom...    

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You have to find a retailer that you like, one to buy... Last night, I suggested TJX (TJX)... Hey, that went up too... 

How about this one?... How about CVS (CVS*)?  It was down on same-store sales that I think will be stronger next year... I own it for my trust...

How about Costco (COST)?...   How about Guess? (GES)?...   How about J. Crew Group (JCG)?...  The heck with the refi's and the stimulus package...  I like them all.

The consumer will be much stronger for next year's holiday season, and the big money has to make that bet right now, if they're going to finish their positions in time for the holidays. 

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The Bottom Line!:     Don't turn your back on the new-found losers, or the old ones, okay?  The times may be a changin'... but the stocks remain the same.  Right here, both the old leadership and the new look like buys, now that we've come through the panic and bottomed.  Yes, I still expect a pullback over the next few days.  We've moved up too quickly but, this time, I expect you to be ready, if we come back to where we started today or, heaven forbid - what a gift - we revisit the abyss once again...


[See Jim's 2nd Opening Segment stock picks below... ]

 

 

 



See all of tonight's stocks' latest quotes on Yahoo! Finance


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Stock Snapshots - Includes all stocks mentioned above

 

 

 

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)

TJX

31.75

31.95

TJX Companies, Inc. (TJX)


CVS*

37.09

35.90

CVS Caremark Corp. (CVS*)

JCG

41.69

41.90

J. Crew Group, Inc. (JCG)


COST

68.61

68.38

Costco Wholesale Corp. (COST)

         

 


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Second Segment
 
 
Final Segment 1 Title: 'Feeling The Beat'

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Featured Stock(s): DuPont (DD)

See DD's website here.

Yahoo! Finance profile for DD here.

IBM (IBM)

See IBM's website here.

Yahoo! Finance profile for IBM here.


2nd segment picks below...



Even now that I believe we've bottomed...  I think the bottom is here, and I think that things are still pretty crazy...

I don't think we want to take too much risk... My feeling with bottoms is that you re-visit them a couple of times...  maybe going a little bit higher each time...

So, we're going to take it from the perspective that we are going to have a pullback, and we also know that these rotations - these endless buying and selling of whole sectors - keeps sending down the good with the bad, and vice versa...

So we're looking for anomalies... 

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Sure, we got more than a 600-point swing today, and that was great if you bought at the low.  You could even ring the register (and sell) at the high...

That's the best evidence we need stocks that we can trust though... stocks we won't panic and sell, so we can take advantage of days like today...

See, we are entering a period of wild swings... ask me about... I re-wrote the show five times today...

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I smell a bit of a pullback tomorrow... I say a bit, because I don't expect it to be severe... We might get it tomorrow... we might get it Friday...

But you need to get a list ready... 

I sense a lot of you... people didn't have their list for the decline... they didn't know what they would buy, if the market came down...   Were you ready?  Most people aren't...

So, if you aren't, and you don't have a list, let me give you two solid suggestions right now... 

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The way to do - not risk-free, but as close to risk-free investments as you can - is to buy stocks that have no earnings risk...  stocks that have already reported