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Thursday, 06/26/08
Posted 06/26/08, 09:41
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Thursday, 06/26/08 |
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Dow Jones: |
11,453 |
- 358 |
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NASDAQ: |
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2,321 |
- 79 |
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S&P 500: |
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1,283 |
- 38 |
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Opening Segment 1
Title: |
'Down But Not Out' |
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. . . .
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Featured Stock(s): |
General sector
discussion regarding
today's dramatic
358-point decline, and
which areas to avoid,
and which ones to
monitor.
Cash is critical here.
Sell what's not
working so you have
additional capital,
ready to invest as the
market will bottom.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
Sometimes we just have to
take our lumps...
Sometimes it seems like
the market's just
impossible to make money
in... made all the more
difficult by the fact that
it's the end of the
quarter... the end of the
2nd quarter, and the big
institutional investors...
they've lost confidence in
the whole market. They're
not like you... they like
to panic. They're dumping
everything.
This decline has to be one
of... let's call it a
dozen severe selloffs I've
had to deal with in my
25-year-long career... a
career that began, I have
to remind you, when the
Dow was more than 9,000
points lower than it is
now... That's right...
more than 9,000 points
that I guess I would have
been spooked out of...
most certainly, if I had a
lot of days like today,
and I didn't understand
how the market works...
It's still the best solace
I can give you right now
though...
You see, we have to accept
these declines. I'm not
saying endure them,
they're too hard... we
have to accept them. We
build them in... we
acknowledge that things go
wrong. Sometimes, we just
sit, we take a little
beating... We raise a
little cash, where can
sell marginal positions.
We circle the wagons
around the stuff we really
like, and we jettison -
sell, sell, sell - the
stuff we don't. And we
thank heaven's that we
knew that pigs get
slaughtered, and we
weren't pigs...
This may be one of those
times...
Going through the laundry
list, it seems as though,
on a day like today,
there's very little to
like. Tech? No...
Aerospace? No... Banking?
No... Sell, sell, sell!...
Brokers, Industrials,
Consumer Products?...
Healthcare? Maybe... Food
and Beverage? Possibly...
Oil? Probably... Gold?
(bull sound)... But that's
just today. That's just a
Thursday, before the end
of a quarter...
And you know what?...
There's stuff to buy in
there right now. There are
bull markets to find and
I'll get to those in a
moment.
I want you to think of the
themes, though, that have
gone under in just the
last few days, because
they explain the action
more than what's happened
today...
We had a cascade of
pin action in different sectors...
The airlines can't buy
planes, because they don't
have the money, thanks to
high fuel costs, so we
sell
Boeing (BA)...
and everything that goes
into a plane from
Honeywell
(HON)
to
United Technologies
(UTX)...
General Motors
(GM)...
They're running out of
cash... So we sell
everything in a car, from
Johnson Controls (JCI)
to
Visteon (VC)...
Banks need cash, oddity
and irony... or maybe not
that odd anymore, but they
do... So we sell
everything that goes into
a bank, including the
technology companies that
supply them with their
systems, like
Oracle (ORCL).
Meanwhile,
Nike (NKE)
can't make its numbers,
and that's the best
consumer products company
out there...
Research
In Motion (RIMM)
reports a pretty darn good
number, but it's not
enough, and RIMM is the
last of the four horsemen
of tech, now that we've
sold almost all of the
Apple (AAPL).
If the best tech story out
there isn't working - even
as I like it still - the
market says, who needs
tech?...
Now, here's what the
market's subtext is...
If a company needs
money... If it buys raw
goods... If it uses oil
and gas... If it needs the
consumer to spend... that
company cannot meet or
beat the estimates that
Wall Street sets, so they
go down...
All of this combines to
make the selling in the
overall market so heavy,
that even the oil and gas
companies that have
benefitted from higher
prices... they go down
today.
Only gold rallies... and
that's not a good sign.
Gold rallies when nothing
else is working. And look
around... almost nothing's
working.
We're faced with a parade
of horribles, instead of a
fabulous July 4th parade
that I'd like to offer
you... There's an abiding
sense that things have
gotten, and are spinning,
out of control. Investors
and traders alike smell
recession... and see
inflation... the
combination that makes
everyone want to reach for
gold. I always tell you to
have some gold, but I'm
not going to make
excuses... I tell you to
own a lot of stocks.
Right now, I don't like
the market, other than a
handful of things that I'm
suggesting you circle the
wagons around...
Minerals and oil and
gas... some agriculture...
But there still have to be
days like this one, when
everything from
ConocoPhillips (COP)
and
CVRD (RIO)
and even the sainted
Potash (POT)
go down... I need you to
think, though,
opportunity, not enemy...
See, those are still buys,
when the smoke clears, not
sells. Why? They don't
need the money. They don't
need the consumer. They
don't need oil and gas.
They don't buy raw goods.
The only thing they buy is
their own stock...
something, by the way,
that really exacerbated
the problem today...
because, did you know that
companies are forbidden to
buy their own stock at the
end of the quarter...
which is why things were
particularly egregiously
ugly today.
I do not have a solution
for this moment.
Every night, I come out
here and proclaim that I
am worried about WB,
including the dividend...
Washington Mutual (WM),
a
Wall of Shame
stock...
Bank of America (BAC),
dividend too high...
Citigroup (C),
you know I hate it... sell
it.
American International Group
(AIG),
please...
Fannie Mae (FNM),
Freddie Mac (FRE)...
(bear sound for all)....
You know I'm fearful about
General Motors
(GM)
and
Ford (F)...
Sell, sell, sell... You
know I don't like retail
or the airlines or the
homebuilders or banks or
technology...
It doesn't leave much,
does it?... Except for the
usual Cramer suspects that
you know so well... that
you should be circling
your wagons around...
Gold... which I always say
is part of a diversified
portfolio as insurance
against days like today...
That's what I'm doing for
my charitable trust... which is
beating the heck out of
the market... but is still
losing money, despite
diversification and lumps
taken.
Judging by the miserable
way the market went out
today, I don't think we're
done with the selloff. I
don't want to be a
Pollyanna by any means...
And that means you need to
have more cash. If you
don't have enough cash,
sell something... sell
something you don't like.
I sense you'll need it,
and you'll be able to buy
things at lower prices...
but not right now.
What do I think will rally
first, when we come back?
What shouldn't you
sell?... The stuff that is
in short supply and the
stuff that rallies in
recessions...
So, natural gases...
Chesapeake (CHK).
Oil services...
Schlumberger (SLB).
It's the
Heinz (HNZ),
the
GlaxoSmithKline (GSK),
along with anything that
China needs... They're out
of steel, they're out of
copper, they're out of
oil, they're out of
coal... So I think you
should buy those now - or,
at least, don't sell them
- in expectation of a
turnaround.
If you're in the banks...
if you're in the
retailers... if you're in
the autos... if you're in
aerospace, I think you
should sell, okay... Raise
cash. Don't hope. Hope is
not part of the equation.
We need to raise cash to
pay for the
recession-proof stocks and
the stocks of companies
that sell what China
needs.
When we get into the light
in the tunnel, and I do
not believe it's a train
coming at us, those stocks
will recover first.
Here's the bottom line...
<verbatim>
. . . .
.
The Bottom Line!:
Now we raise cash... I
know, down $350, you wish
you didn't have to but,
you know what, we've got
to be sensible... We know
that we ring registers
here all the time. If you
don't have cash, wait
until things go lower, and
then pick, okay... Is this
the right level to pick?
For some stocks, yes.
You've heard the ones that
I like. That's what will
let you stay in the game,
even for moments like
this. And remember why you
watch Mad Money... it's to
catch the next 9,000
points, which you may miss
if you decide to leave the
table.
. . . .
.
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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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General sector discussion regarding
today's dramatic 358-point decline, and
which areas to avoid, and which ones to
monitor.
Cash is critical here. Sell what's
not working so you have additional
capital, ready to invest as the market
will bottom.
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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