Wednesday, 01/30/08
Posted 01/31/08,  1:17 am ET

(Scroll down to see Jim's comments below)

 
 
Today's date:  Wednesday, 01/30/08

  Dow Jones: 12,442     - 37
  NASDAQ:   2,349      - 9
  S&P 500:   1,355      - 6
 
 
 
 
 
First Segment
 
 
 
Opening Segment 1 Title: 'Fed On Target'

.  .  .  .  .

Featured Stock(s): MBIA (MBI)
Ambac (ABK)
Radian (RDN)
PMI (PMI)
MGIC (MTG)
Altria (MO*)
AT&T (T)
Verizon (VZ)
Costco (COST)
Urban Outfitters (URBN)
Sears (SHLD*)
Bear Stearns (BSC)
Goldman Sachs (GS*)
Wachovia (WB)
Washington Mutual (WM)
Countrywide (CFC)
Citigroup (C*)
Ford (F)
General Motors (GM)


See Opening Segment 2, below...

        
We got a gift today...  The market anticipated a big cut, so we got it, and then it sold off...

As someone who's traded for almost 30 years, I can tell you that's just very typical of the short-term thinking that colors the market these days...  Don't fall prey to it...

Thanks to these cuts, the future is looking much brighter than the past...

I am being so un-cynical here, because there's no reason to be cynical.  So don't think that a decline in the averages, after the cut, means you have to be bearish...

Right now, I believe it is incredibly imperative for you to be more bullish!...  Post-rate-cut... because this is where and when you make the money... 

.  .  .  .  .

I am so confident that, right now, I feel like purchasing perhaps the most loathed and toxic investment around... I feel like purchasing an asset, now synonymous with the destruction of value...

With this rate cut, I think I'm going to go buy house... You heard me...  A house!  One of those poisonous financial instruments with living rooms and bedrooms and bathrooms... kitchens!...

10 days ago, before the cuts, the very idea of buying a house... buying domestic real estate was simply unthinkable!...

This was the malignant growth at the heart of our financial system...  the heart of darkness that was going to bring everything down...  and now, I think, you could probably find some darn good buys among houses...  I mean it.  I'm not lying...

Why?...

Because, beginning next week, Dr. Bernanke (Fed Chairman) has become Dr. Guioutine!... The guioutine of interest rates... and, with this additional 50-point basis cut, I think he has made a turnaround in housing inevitable!...  Buy, buy, buy!...
 

.  .  .  .  .

Today, I believe the Fed averted national systemic bank failure...  This cut takes a situation where major banks were going to go under...  And maybe still, some mortgage insurers do... I believe that...

But this was a situation that would have been truly catastrophic and, you know what?...  We're taking the catastrophe right off the table...

Now, banks can make enough money lending, because the Fed has lowered the rate at which banks have to pay out interest to their depositors, which increases their profits... 

.  .  .  .  .

These companies that insure the derivatives... Again, MBIA (MBI), Ambac (ABK), Radian (RDN)...  I fret about the personal mortgage insurers, PMI (PMI) and MGIC (MTG)...

Now... There will be a step back if they fail, but you must be ready to buy, not run, from that retreat, because they are all that stands in the way of a full-blown housing recovery that no one in this country is expecting or predicting...  perhaps, with the exception of Chad Dreier, the unbelievable CEO from Ryland (RYL), who got it right the whole way...

This is part of the Fed's mandate to avert financial Armageddon...

They did their jobs, even though there are a lot of people out there, still urging them to go in the other direction, and fight inflation by destroying the economy...

.  .  .  .  .

It's not the Fed's job to choose stocks, but make no mistake here... I believe this cut has given you an opportunity to make a great deal of money...

Let me tell you how...

First, stocks with high dividends... Even better today than yesterday...

Think Altria (MO*), which just announced a major split, and a major dividend boost today... 63% payout goes to 70% payout on average...

How about AT&T (T) and
Verizon (VZ)?...  Much heaped upon...  Frankly, I think their yields are so attractive... you've got to swap out of cash and into that...  The rate Bernanke cut... the cash rate... it's just not compelling enough...  Those stocks should go higher...

.  .  .  .  .

Second, you know the rate cuts mean the retailers go higher... I've been saying that for a long time... Costco (COST), Urban Outfitters (URBN)...  You know something?... I don't even care... Just get one.  I mean, even my friend, Eddie Lampert's stock at Sears (SHLD*) has been going up... of course, only because they don't have Eddie Lampert to kick around anymore...

.  .  .  .  .

You know the bankers and the brokers from Bear Stearns (BSC) and Goldman Sachs (GS*)... They should all go higher...

A few weeks ago, I would have said that the strength we had today, before we sold off, and the coming rally I'm predicting, would be a chance to sell the banks... especially the ones truly hobbled by sub-prime...  And there you've got to think Washington Mutual (WM), Countrywide (CFC), Citigroup (C*), Wachovia (WB), Downey Financial (DSL), BankUnited (BKUNA), FirstFed (FED)...

Now, you can buy Wachovia (WB) on weakness...  That, by the way, is the best of the troubled lot...  and I'm thinking that Washington Mutual (WM) can hang on, until it gets a bid... And Bank of America (BAC), with that big preferred issuance, can now handle the Countrywide (CFC) acquisition...   And Citigroup (C*)?...  Well, hey, listen...  It muddles around...

.  .  .  .  .

Third, you can buy industrials... You can buy - get this, first time ever - automakers... I've been recommending General Motors 7.5 Preferred (GMS)...   I now think you can buy Ford (F) and General Motors (GM) common stock...  Go ahead.  They work now, because financial catastrophe has been taken off the table...

New recommendations, and we know the economy should be better in 10-12 months than it is right now...

Anything that used to be in a bear market is now in a full bull-market mode...

Housing, banks, brokers, retail, the industrials... automakers.  Buy them on weakness... 

.  .  .  .  .

In 1990, when we got here, the bears doubled down on their shorts... kind of like the market tanked today, after the quick Fed-induced rally...  They talked about shooting fish in a barrel... the banks...   Well, they were the ones that got shot.  You never heard from them again...

A lot of them were tepid bulls... panicked today, and sold what they had.  But a few of us said, down 50% - two weeks ago - that the worst was over for the financials...  and the Fed would now see the error of their ways, because that's what history dictated...

They followed history.  They did it.  Be glad the market came down...   It's an opportunity.

It was simply reacting to day after day of anticipation of the cuts... 

Don't run away from stocks, now that we have to run to them...

.  .  .  .  .

Business is real good away from housing and retail and auto...

You'll hear a lot of people talking and say, why did they have to cut?  Business is real good away from housing and retail and auto...   Because housing was so bad, they had to cut!

.  .  .  .  .

The Bottom Line!:     I believe the Fed has given you a once-in-a-decade opportunity to make big money right now... frankly, in stocks... and, in six months, in homes.  Do not be scared away...


[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)


MBI

13.96

12.09

MBIA (MBI)

ABK

10.85

9.86

Ambac (ABK)


RDN

8.42

8.28

Radian (RDN)

PMI

9.11

8.41

PMI (PMI)


MTG

17.15

16.47

MGIC (MTG)
 

MO*

76.50

76.08

Altria (MO*)


T

37.35

36.81

AT&T (T)

VZ

38.24

37.75

Verizon (VZ)


COST

66.23

65.63

Costco (COST)

URBN

28.24

27.64

Urban Outfitters (URBN)


SHLD*

105.07

103.78

Sears (SHLD*)

BSC

88.26

87.14

Bear Stearns (BSC)


GS*

198.55

196.45

Goldman Sachs (GS*)

WB

36.67

36.00

Wachovia (WB)


WM

18.65

18.16

Washington Mutual (WM)

CFC

6.47

6.40

Countrywide (CFC)


C*

27.88

27.00

Citigroup (C*)

F

6.75

6.68

Ford (F)


GM

27.46

26.90

General Motors (GM)

         

 


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Second Segment
 
 
 
 
Final Segment 2 Title: 'On The Line'....

'Seal Of Approval'...

CEO Interview
Rick Goings, CEO

.  .  .  .  .

Featured Stock(s): Tupperware Brands Corporation (TUP)

.  .  .  .  .

 

   
 

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)


TUP

34.55

na

CEO Interview
Rick Goings, CEO
Tupperware Brands Corporation (TUP)


Jim's comments BEFORE interview:  
 
You know why I can trash some bad CEOs with impunity?... Because, when I've got good ones... I bring them on... I praise them...

What's a good one?...  A guy that makes you money.... What's a bad one?... A guy that loses you money...  A simple litmus test.

If you're a stock junky like me, or simply someone with a healthy dose of greed, on this show we're fine with that, frankly, Gordon Gecko outlook...

An earnings report can be a thing of beauty... more moving than the best works of art...  particularly when you're trying to assess what a CEO has brought to the party.

That's why I'm saying, move over Michelangelo... forget about the Impressionists...

I've got something that blows away all of them...

This is Tupperware (TUP)...  The beauty of TUP's latest masterpiece... it's all in the numbers.

This company has been a slow and steady winner for us, ever since October 4th of 2006.  That's when we got behind it.  We recommended it at $19.73, and have stayed long it the whole way, and it's up a sweet 75% since...

Today, TUP stopped being so slow...

It came out with a blowout quarter that catapulted the stock up more than 5 points, or almost 18% on a down day...  And, even after that move, the stock still sports a respectable 2.5% yield...  Cramerica's kind of story...

Earnings came in at 93 cents a share, 13 more than the consensus estimate of 80 cents...  I'm pronouncing this the biggest beat... the biggest beating of estimates since this year began...

To top it all off, TUP raised guidance for the first quarter, and all of 2008...

TUP is a great reminder that, just because the Fed does this or does that... that we must always keep our eyes open... always be on the lookout for opportunity...

As it turns out, this company actually makes money off of higher unemployment - counter cyclical... a great play to have in a recession, because it's easier to recruit sales reps...

This is what really does it for me... Here's what he (CEO) said...  He was telling investors that they could relax...  that, if there was bad news, they'd know it already... so it was safe to buy the stock ahead of earnings, and make a ton of money today. 

How many CEOs are this shareholder-friendly?... Only a handful of guys are this bankable, which is why I am thrilled to welcome Rick Goings, the chairman and CEO of TUP, to Mad Money...      

.  .  .  .  .

Jim's comments AFTER interview:    
Rick Goings, you're a hero for our show. We take apart guys who lose us money. We've got to celebrate the winners, and you're one of the winners. Thank you for everything you've done, and for all the people who bought TUP off my
recommendation, because I believed in you.




         

 

   
 

Go to the LIGHTNING ROUND 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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his charitable trust portfolio.  You can see the complete portfolio
of stocks here >>

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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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.

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.
 

 
Definitions of key phrases used by Jim, known as "Cramerisms":

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...

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.

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).

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.
  See more "Cramerisms" & other financial phrases here >>
   
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