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Thursday, 01/31/08
Posted 01/31/08, 10:42
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Thursday, 01/31/08 |
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Dow Jones: |
12,650 |
+ 207 |
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NASDAQ: |
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2,389 |
+ 40 |
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S&P 500: |
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1,378 |
+ 22 |
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Opening Segment 1
Title: |
'Winner's Circle'
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. . . .
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Featured Stock(s): |
J. C. Penney (JCP)
Ralph Lauren (RL)
See Opening Segment 2,
below...
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We're celebrating another
extraordinary day for our
new-found lovers...
Yes... our homebuilders...
our banks... our
retailers!...
Buy, buy, buy!
Anyone who knows me should
recognize that these are
true loves, even as
they're just pieces of
paper... albeit, pieces of
paper that rallied huge on
this up-$207 day...
In fact, I keep a little
black book of the sectors
I love... It's
the playbook!...
. . . .
.
The idea, which I explain
at length in
Jim Cramer's Real Money: Sane Investing In An
Insane World - which is the
actual playbook...
is that, at different
points in the business
cycle - page 156...
at different points in the
business cycle, you want
to buy different stocks...
When rates go up, you buy
defensive, secular growth
stocks...
When rates go down...
which is where we are
now... you buy retail and
the financials... not to
mention homebuilders.
But the playbook only
works, because the market
is so dumb...
. . . .
.
And, today, I've got not
one, but two stocks that I
believe are great plays on
the idiocy of the
market...
For the second time in a
row, the market sold off,
after a gigunda rate
cut... proving it is us
who know nothing...
We desperately wanted and
needed a gigantic rate
cut, and we got it... then
we fell 190 points before
the adults took over, and
we rallied to close up 207
which, of course, is
exactly what it should
have been...
But why the heck did we go
down at all?...
The truth is that a lot of
negative people... really
don't understand what's
going on right now...
These investors think we
don't need rate cuts, or
they think rate cuts don't
work... or they
didn't think there was
anything was wrong with
the economy... they're
really stupid...
And this $600 rebate...
what I call in a true
twist of Huey Long... The
iPod-in-every-pocket
stimulus package... mean
things are getting better.
The cycle has turned, but
today's sellers don't see
it...
When they finally catch
on, we'll sell them the
very stocks we're buying
now for a hefty profit.
The amazing thing about
the negative Nancies of
this market, is that there
are so many great
investment ideas sitting
literally in front of our
faces!...
. . . .
.
This morning, I got an
invitation in the mail
that says Mike Ullman,
III, chairman and CEO of
J. C. Penney (JCP),
invite you to celebrate
the launch of American
Living... February 19th,
2008, in New York...
American Living is the
J.C. Penney/Ralph
Lauren (RL)
joint venture. I
call it a kind of
aspiration, apparel and
home products game... and
it's going to be huge.
It's a way of feeling rich
when you don't have any
money...
So then, I start thinking,
RL and JCP... and I start
doing my (analysis)...
. . . .
.
JCP's up big today, off a
great interview with CEO,
Mike Ullman, in the Wall
Street Journal... but it's
still down over 41%
year-over-year...
And, until today, people
wondered... did it have a
pulse?...
If you want an example of
idocy in action, this
stock had estimates cut
today... One guy cut
it over at Thomas
Weisel... who I
guess has decided that,
since the stock has
already come down, and we
finally have reason to
believe retail has turned,
it's a good time to tell
people that we ought to
lighten up.
Let's just hope someone
listens to weasel, I mean
Weisel, so you can buy it
cheaper!...
. . . .
.
Ralph Lauren (RL)
is actually down today off
of not one, but two,
downgrades...
Uh, RL's down 26%...
Thanks a lot,
gentlemen!...
These two downgrades are
another example of how the
market's stupidity can
make you money... as
they've created a great
entry point for anyone who
wants to buy RL...
. . . .
.
I say, buy them both!...
RL and JCP should be going
much higher, now that
we've bottomed and the
cycle has turned...
They're both first-class
retailers. RL covers
the high-end, and JCP
gives you the low-end
consumer, and should
benefit from this
slowdown, as shoppers
flock to discount players
to save money... and maybe
JCP starts making its
stores look better,
instead of just buying
back stock...
. . . .
.
In his interview with The
Journal, JCP's Mike Ullman
III, said American Living
would be a billion-dollar
concept. He said
this was JCP in five
years, and I believe him.
And for a discount
retailer like JCP... this
kind of aspirational brand
is what keeps people
coming back to the
stores...
JCP and RL aren't just
selling clothes...
they're selling a
feeling... the
feeling that you're
wealthy and, believe me,
the market for that is
enormous.
. . . .
.
The Bottom Line!:
Right
now, negativity is
synonomous with stupidity.
When the market shows
signs of both, that's your
chance to buy retailers
like
J. C. Penney (JCP)
and
Ralph Lauren (RL),
the market's new leaders,
even if many investors
don't know it yet. Do not
wait until American
Living's opening on
February 19th... and act
now to buy your shares of
RL and JCP!... And, if the
market wants to be dumb
again... if they want to
take these stocks lower...
I say you buy more!
[See Jim's 2nd Opening
Segment stock picks
below... ]
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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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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JCP |
48.31 |
48.31 |
J. C. Penney (JCP)
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RL |
61.93 |
61.93 |
Polo Ralph Lauren Corp. (RL)
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Mutual-Fund-Holdings.com
NEW RESOURCE!
See Ken Heebner's CGM
Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
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Opening Segment 1
Title: |
'The Sell Block'
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. . . .
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Featured Stock(s): |
Walt Disney Co. (DIS)
- but not to sell, to buy!
See DIS's official
website
here.
See the Yahoo!
Finance profile for
DIS
here.
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JJC: On
Tuesday, we saw the
greatest miscarriage of
justice!...
What happened?...
An analyst at
Citigroup (C*)
threw
Disney (DIS)
into the Sell Block...
without due process... The
guy at Citigroup
downgraded DIS to a
sell... questioning the...
and I quote...
'sustainability of DIS's
robust results,
particularly within the
theme parks division.'
Because DIS had been
thrown into the Sell
Block, it couldn't
participate in Tuesday's
magnificient rally...
but, if you ask me,
everything about this
downgrade is dead wrong...
Citi only talks about
DIS's theme park business.
Nothing about their cable
properties, broadcasting,
DVD sales or film...
How could he not mention
ESPN?...
Only 22% of DIS's net
income last year came from
parks, while cable counted
for 45%... and even his
stuff about theme parks
was way behind the
curve...
. . . .
.
With DIS at almost $30,
all of the bad economic
news should be more than
factored in...
And, honestly, why is
this guy only starting
to worry about the
economy after the Fed's
emergency 3/4 point rate
cut, and right before
the 1/2 point rate cut
everyone expected, and
got yesterday...
He downgrades DIS, only
after we turn the
corner... after we've
bottomed?... After
the cycle says that DIS
may be one of the most
ideal stocks to own
here?...
And, don't forget,
because of the
pathetically weak
dollar, a hamburger in
Europe now costs
$4,487,000 dollars...
People will go to Disney
before they go see the
Eiffel Tower...
I think this guy's dead
wrong... But, even
if he's right, and the
numbers are as bad as he
thinks, DIS is
historically very
cheap...
In the name of - dreaded
- long-term thinking, I
want to spring this
stock from the Sell
Block...
In
Stay Mad For Life,
I talk about how you
need to buy stocks like
DIS when they're down,
because they're such
great long-term
investments. You
have to move when
they're cheap. In
this market, we're
getting buying
opportunities that will
cause your kids to look
back one day and say,
how did my mom get me
those shares of DIS in
the $20s?... I really
love my mom...
Frankly, I'm praying
that this nattering
naboch of negativity
over at Citi, is right,
and DIS goes down ever
further, so you'll have
the chance to buy this
stock at $26 bucks, but
I don't think that will
happen...
Let me say that,
tonight, I am freeing
DIS from the grips of
short-term thinking, and
urging you to believe
that this is your
opportunity to buy DIS
not for next week, but
for the next decade...
Well, wait a second...
That said, I happen to
believe it is the right
time to buy DIS for the
next 12 days, let alone
the 12 months... let alone
the 12 years.... and
here's why...
After Citigroup downgraded
the stock to 'sell', we
saw something that rarely
happens, and is, to me, a
huge confidence booster...
The CFO of DIS came out
and refuted the
downgrades' metrics later
that same day... He
told us that the theme
parks are actually doing
better than they were a
year ago...
When Pally Research
upgraded DIS the next day,
they said, 'We have simply
never seen Disney
management, in our 13
years of covering the
company, publicly refuting
investors' fears.'
That, to me, is huge...
On this show, the last
time we saw anything like
this from any company was
when Rick Goings (CEO) of
Tupperware (TUP)
assured us the quarter was
okay, and then his stock
reported blowout numbers,
and made you a lot of
money, up $6...
I think it's happening
again at DIS...
Just like TUP, DIS was in
its quiet period...
In the quiet period,
you're simply not allowed
to talk to anyone about
the quarter, but DIS
couldn't resist,
responding to the
outrageous Citigroup
downgrade... that
miscarriage of justice!
So DIS is so right here
for the next year, and for
the next decade, and for
the next week... and I
like another quarter, when
they report on February
5th... after that
reassurance from DIS's
CFO...
Even using Citi's lowball,
$1.96 estimates, the stock
is trading at just 15x
earnings, with a September
fiscal year...
With a 15% long-term
growth rate, using the
concensus estimates, it's
only trading at 13.8x
earnings. That
price-to-earnings multiple
is barely above the growth
rate, and my rule of thumb
for these things is about
as cheap as a large, and
well-covered, good growth
stock will get...
. . . .
.
The Bottom Line!:
As of
tonight, consider
Walt Disney Co. (DIS)
sprung from
Citigroup (C*)'s
Sell Block, and freed from
the grips of short-term
thinking. I think this
stock is a great buy! DIS!
Traders... investors...
listen up!... I'm going to
Disney World!
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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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DIS |
29.84 |
30.75 |
Walt Disney Co. (DIS)
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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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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
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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
conclusions. Also, data presented
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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