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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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This holiday's
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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 | | | | |
