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Monday, 04/28/08
Posted 04/28/08, 10:09
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Monday, 04/28/08 |
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Dow Jones: |
12,871 |
- 20 |
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NASDAQ: |
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2,424 |
+ 1 |
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S&P 500: |
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1,396 |
- 1 |
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Opening Segment 1
Title: |
'Fed Matters?'
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. . . .
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Featured Stock(s): |
Johnson & Johnson (JNJ)
Pfizer (PFE)
Merck (MRK)
Caterpillar Inc. (CAT)
United Technologies
(UTX)
IBM (IBM)
Boeing Co. (BA)
Deere (DE)
Potash (POT)
Apache Corp. (APA)
Nabors (NBR)
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: It is
time... It is time to
steel yourself... to strap
yourself in... maybe put
some cotton in your
ears... to avoid... a Fed
watch... This week, the
Federal Reserve meets...
and the two questions...
will they cut interest
rates? And, if so, by how
much?... will dominate the
headlines. You won't be
able to get away from
it... It will chatter so
loud, it will blind you to
any opportunity.
You'll hear that it's make
or break... that this big
boy controls all events...
every direction of stock
will be controlled by
this. You'll feel like, if
you only knew what the Fed
was going to do, you'd
know what stocks to buy
and sell... What will go
up? What will go down?
Both before and after the
meeting... After all, the
Fed holds the magic key,
doesn't it?...
Ohh... and if the Fed
doesn't cut, the weak
dollar will become
strong... it will kill the
rallies in natural gas, in
oil, in infrastructure...
What a momentous meeting!
Nothing will be more
important than perhaps the
commentary with the
cut!... Except, of course,
the next meeting after
this one! Oh, that's going
to loom large!... to use
the exaggerated lingo...
Ladies and gentlemen, I'm
here to tell you, that
every bit of what I just
said is completely and
utterly wrong...
None of it matters... No
matter how much you hear
about the Fed's
importance, none of it
matters. It's off the
table. In fact, with
interest rates this low,
I'm telling you right now
that the Fed has become
irrelevant to the future
of what we talk about on
this show... irrelevant to
the future of stocks, and
it doesn't even matter if
they know nothing...
We've reached a place
where, give or take a
quarter of a point, the
Fed's intervention through
interest rates just
doesn't matter.
Rates are low enough, and
inconsequential enough,
that now we need to focus
on earnings... on
valuation... and the
momentum of the worldwide
economy... all of which,
with the exception of the
financials... the
retailers... and with the
exception of the domestic
restaurants (bear sounds
for all)... are turning
out to be surprisingly
good! Even great!
That's why I've decided
that, all week, beginning
with the next segment, I'm
going to highlight
American industrial
companies... businesses
that make things and then
unbelievably sell them...
particularly to
overseas...
I'm latching onto these
stocks, because America
has become the best
manufacturer in the world,
producing the best goods,
and selling them at the
cheapest prices, because
of the weak dollar and our
inexpensive workforce...
Right now, the Fed - which
knew nothing - now means
nothing to this industrial
American juggernaut...
While everyone else is
glued to their seats,
watching the Fed, I want
you watching these
stocks... for an
opportunity to buy them,
when the market
misinterprets or cares
even what the Fed does...
When everyone else is
insisting the Fed holds
the fate of the equity
markets in its hands, I
have to give you some
justification for my very
contrary view about why I
believe the moves that the
Fed does will not
determine anything... If
they go down, you buy...
Cut, or no cut, I'm
bullish!...
You see, other forces are
now at work, positive
forces, and they're
creating a situation where
I don't care if we get hit
either before the Fed
meeting, after the Fed
meeting, after the
statement... blah, blah,
blah...
If we get hit (i.e.,
stocks go down), you know
what I want you to do...
buy, buy, buy!...
Now, it doesn't matter
what the Fed does. It's
time to buy everything but
the hazardous trio of
finance, retail and
restaurants - those, of
course, only with no
international exposure...
I've got three reasons why
you need to stop worrying,
and begin to love the
bull...
Reason #1... Almost all
the stocks in the Dow are
insulated from the Fed,
and they're going to trade
the way that they should
irrespective of the Fed's
actions. The vast majority
of these companies are
either recession-proof...
Hey,
Johnson & Johnson (JNJ),
Pfizer (PFE)
and Cramer-fave
Merck (MRK),
which is the best
example... or the
companies that sell to the
rest of the world... we
call them
ROW-ers. They're not
hostage to the Fed, but to
the global economy, which
is pretty darn good.
Caterpillar (CAT),
United Technologies
(UTX),
IBM (IBM),
Boeing (BA)...
These are great examples.
Reason #2 that I don't
care about the Fed... The
stronger part of the
market... oil and gas,
agriculture, minerals,
infrastructure... these
are not controlled by the
dollar. And the dollar's
not controlled by the Fed,
despite every bit of
misinformation you've been
hearing. The companies I
like are controlled by
commodity prices set
worldwide, not set by the
U.S.,... which turned out
to be a pretty marginal
company, because of our
lack of growth...
The dollar is controlled,
not by all this nonsense
you're going to hear on
Wednesday (i.e., after the
Fed's meeting), but it's
controlled by our
monstrous trade and budget
deficits... not by
short-term rates. These
trends have a lot more to
do with the high demand
for, and lack of supply
of, energy... of food,
because of our ridiculous
food-for-ethanol policy.
That's why I like
companies like
Deere (DE)
and
Potash (POT)...
I don't care if it's
down...
Apache (APA)
and
Nabors (NBR)...
The third reason you
shouldn't get swept up in
Fed watch... is overall
earnings reports this
quarter have been nothing
short of fantastic! And
earnings control stocks. I
see them actually getting
better and better, because
of worldwide exposure, and
because the weak U.S.
economy has dropped off,
as an important swing
factor.
Beyond that, even stocks
that have reported bad
quarters, or quarters the
Street didn't like... hey,
they've been going
higher... They take an
initial drubbing, right...
and then, even if the
stocks with bad earnings
are working, what do you
think that means for
stocks with good ones?
Think about it... the
disappointments...
Remember
Apple Inc. (AAPL)?...
Remember
Amazon.com (AMZN)?....
FedEx (FDX)?....
Ahhh....
Coach (COH)?...
Scary... They're all up
huge from the so-called
bad news. The same with
the homebuilders.
I think the Fed's cuts -
are you ready skee-daddy -
are actually working. Hey,
has anyone articulated
that view besides me? No.
Where does that leave
us?...
Unquestionably bullish!...
Bullish longer term...
We're hoping the market
comes down! (e.g., so that
we have the opportunity to
buy into stocks at lower
prices) We haven't felt
that way since the bottom,
when treasuries solved the
Bear Stearns issue, and
gave us a template to
avoid... yes... financial
disaster!
. . . .
.
The Bottom Line!:
Do not get shaken out,
because you're listening
to the swirl of scary
chatter... In Cramerica,
right now, what we care
about is earnings watch...
and maybe a scantily-clad
Miley... but not the Fed.
Sorry pal! Earnings are
pretty darn good!
[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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Most popular
investing books ordered:
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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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JNJ |
67.32 |
na |
Johnson & Johnson (JNJ)
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PFE |
20.23 |
na |
Pfizer (PFE)
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MRK |
41.44 |
na |
Merck (MRK)
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CAT |
83.03 |
na |
Caterpillar Inc. (CAT)
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UTX |
73.04 |
na |
United Technologies
(UTX)
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IBM |
121.69 |
na |
IBM (IBM)
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BA |
84.98 |
na |
Boeing Co. (BA)
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DE |
89.53 |
na |
Deere (DE)
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POT |
193.50 |
na |
Potash (POT)
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APA |
137.90 |
na |
Apache Corp. (APA)
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NBR |
38.38 |
na |
Nabors (NBR)
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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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Final Segment 2
Title: |
'Industry Standard'
CEO Interview:
Sandy Cutler, CEO |
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. . . .
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Featured Stock(s): |
Eaton Corp. (ETN)
See ETN's official
website
here.
See the Yahoo!
Finance profile for
ETN
here.
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After this segment, you
can see Jim's Lightning
Round picks
here... |
Jim's Comments BEFORE
the interview:
This week, all week, we
are celebrate the greatest
manufacturers in the
greatest manufacturing
country on earth... the
United States of America.
That's right, despite all
our domestic woes, we
still have a real economy
with real businesses that
make real things, and they
make them cheaper and
better than anyone else in
the world... not just
because our workforce is
inexpensive, but because
of a weak dollar... and,
most importantly, we still
have the best engineering
and manufacturing know-how
in the world. You don't
hear it in the media. I'm
not media. I'm a stock
guy. I'm a guy who
invests, and I'm telling
you, we are the best!
The first stock in my
series is... this one's so
great. I have liked this
company and CEO for so
long, I am so thrilled to
go on to this week of
great companies... and the
stock is
Eaton Corp. (ETN)...
This is an industrial
stock... the kind of stock
that's not supposed to
work, when you're sliding
into a recession, but
ETN's is working, and it's
working big, like many
other American
manufacturers. Why?
Because, while it may
produce locally, it's
selling globally,
including through some
recently-acquired
companies... some really
good acquisitions...
55% of ETN's revenues come
from international
markets, up from 48% a
year ago...
It's getting its growth
from the rest of the
world, and not here...
If it relied on just here,
we wouldn't be talking!...
ETN's had 25% annual
growth in Latin America
and Asia... That's what
tech used to have.
Stop being fixated on
tech! Be fixated on
American manufacturing!
It's prospering.
It's why it can raise
earnings guidance for the
rest of the year, like ETN
did when it reported a
terrific quarter on April
14th, even though the
American economy, yes, is
just awful...
ETN is a diversified
industrial player.
45% of its sales are from
electrical... where it
makes circuit breakers,
switch boards, switches,
sensors, meters and
capacitors. This
isn't just like a little
box in your basement!
Go to their website (here).
This stuff is incredible.
It's packed with
semiconductors and
fantastic, brilliant kinds
of circuits that are not
like our parents' circuit
boards.
16% comes from
hydraulics... that's
that fluid power.
14% of its sales come from
a greenish truck business,
which I'm the most excited
about, of all their
lines... fuel efficient
transmissions and, most
importantly, hybrid
engines... I think the
solution to higher oil
prices.
Another 14% of ETN's sales
comes from their auto
division, and they're
still doing well, despite
that industry... And
aerospace... It has
some exposure to the
Boeing Co. (BA)
787 DreamLiner...
Last week... and
this is why I am urging
you to focus... last week,
ETN did an equity
offering. It raised
about $1.5 billion.
It sold the stock at $84.
You know how we feel about
secondaries, where the
stock then goes up 3
points right after...
The overhang from the
infusion of all these new
shares? Well, I've
got to tell you
something... it's already
passed. I think the
stock's headed back up to
its 52-week high...
$91.00, where it reported.
So you get a steal if you
were in the deal.
And you still get a steal
if, perhaps, a stock like
ETN, goes down off the
Federal Reserve doing what
it's not supposed to do.
ETN's stock is now trading
at just 9.6x earnings!
This is a technology
stock, selling at 9.6x
earnings, despite
long-term 13% growth...
and that makes the stock
look incredibly cheap to
me, but I want to know
more about this story, and
so do you...
So let's talk to the man
himself, Sandy Cutler, the
chairman, president and
CEO of ETN... and I have
followed and listened for
very long, because he
transformed this company
into a great American
company... He's one
of the great managers in
this country, and he has
taken ETN to such heights,
that he's revered by both
analysts and the
manufacturing community.
Now it's time for you to
revere him. Mr.
Cutler, welcome to Mad
Money...
. . . .
.
Jim's Comments AFTER
the interview:
All right, guys... I am
telling you right now...
If you're waiting for
technology to come back,
with an
Advanced Micro Devices Inc.
(AMD)...
with a
Dell Inc. (DELL)...
with a
Hewlett-Packard (HPQ)....
you're crazy. Technology
in this country is ETN.
That's where all of the
innovation is coming from,
and it sells for half of
the price of those bad
tech stocks that you're
waiting for! Stop waiting
for Sun Microsystems
Inc. (JAVA)
to come back and ADM...
and pick up some ETN!
Buy, buy, buy!
. . . .
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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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ETN |
87.63 |
na |
Eaton Corp. (ETN)
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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
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
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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