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Thursday,
January 15, 2009
(Cont'd from
above)...
Jim (cont'd):
But for us, this
market is saying
look sure everything
is bad, but you got
too negative again…
and when you do
that… we will punish
you… at least when
it comes to these
two once great
banks… Now, there is
more shrugging…
Apple… people looked
at Apple today and
said wait… there
could be live after
Steve Jobs, even if
it happens… what are
they doing… what is
the calculation…
people are backing
out the cash… Apple
has got $30 in cash…
and they are
thinking wait a
second with I-tunes,
I-phones, I-pods,
all that great
stuff… it is just
selling at 8 times
earnings… one of the
lowest multiple of
any common stock…
not just any tech
stock… Intel reports
after it closed….
they are saying it’s
fine… people are
saying hey the worst
is over… hey you
have heard that
before.
Now, what does all
this mean… does it
mean that we are out
of the woods… does
it mean we won’t
retest the lows if
they were better
than expected… no, I
am not going there…
that is… no, let
someone else say
that… I see these
guys all the time…
it’s fine, it’s
fine, don’t worry
about it, it’s fine,
it’s fine… I am not
saying that… I will
say this though… we
were about as
negative as I have
ever seen us this
morning with they
usual bears… with
their usual
Jeremiahs… and their
usual chicken
noises… which means
the market is indeed
going to, yes you
got it, bounce… we
have seen this time
and again when the
pessimism gets to
such an extreme and
we are down for
multiple days…
eventually we get a
nice recovery rally
like we saw this
afternoon…
meaningless but
tradable….
meaningless but
profitable… what do
I think you should
do… you buy, as we
endlessly, the
companies with high
sustainable
dividends… and keep
buying them on the
way down…. even
though you know that
the companies may
not be on fire.
Here is two that is
on fire that I like…
take Verizon and
AT&T…. what the heck
were the sellers
thinking today when
they were just
bailing out… both
stocks now yield
upwards of 6%… they
have strong
franchises… even
though their
businesses are most
likely deteriorating
in this environment…
we do not know… they
have been two of the
best bounce back
stocks that are out
there…let me give
you the bonafides…
AT&T bottomed at $21
on October 10th… and
then it shot up to
$30... okay… and
here we are back to
$25... Verizon
bottomed at $24 the
same day… and it
shut up to $35...
it’s now at
$29.90... the risk
reward for both of
them right here is
just fabulous… two
of the best
opportunities that I
see out there… that,
hey I gotta tell
you, we all know
what they are right.
Alright take a look
at Home Depot… one
of our Dow Jones
All-Stars from last
week… after it fell
and once again had
an accidentally high
yield… it sprung
back… closing up
1.1% today… the same
thing goes for
Caterpillar… which
is one we said you
should buy when the
yield went above 4%…
that worked too… or
look at Research In
Motion, which is
breaking out
according to our
technician friend
from
TheStreet.com,
where I am chairman,
Dan Fitzpatrick… has
a monster good
chart.
Here is the bottom
line...
▼ ▼
▼ ▼
▼
The Bottom Line!:
Even with the fate
of the common stock
of both Citigroup
and Bank of America,
clearly in jeopardy…
we still got too
negative… and when
that happens we
bounce back… so you
buy the high
yielders like
AT&T (T)
and
Verizon
(VZ)
on the way down…
because that we
know, that tried and
true strategy works…
even if Karl Marx…
turns out to have
been right al along.
Don’t get too
excited over today’s
rally, I think you
should still stick
with the
high-yielders...
Alright, the Dow up
despite the markets
incredible…
incredible
negativity… what
does that tell you?…
it tells you to just
go back to the tried
and true… go buy the
high yielders on the
way down… don’t be
too cute about it…
and don’t say, oh we
are out of the
woods… because every
single day the woods
seem to spring right
back up again.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
I have two
questions. I
just got a lump
sum retirement
payout and I
want to proceed
into the market
with it. But I
don’t want to go
into this ugly
thing. How do I
proceed? The
first question.
The second
question is last
November we
elected Barrack
Obama into
President, my
question is
this, is Wall
Street now
voting on
Barrack Obama
now, with the
way that the
market is
responding?
Cramer help me.
Jim:
First of all,
you are 62, why
would you put it
in this crummy
market… you need
the money. You
need the money,
I wouldn’t touch
it… if you need
the money go buy
Municipal Bonds…
they are
fabulous… there
are 5% triple
tax free general
obligation bonds
from Florida… I
don’t want you
to mess in this
market, unless
you want to play
the Little Plow
Mad Money…
because if you
listen to Mad
Money, listen to
ideas… but no,
if you need that
money now, if
you need that
money in the
next five years…
this place is no
place for it…
not with Bank of
America down to
$8... and
Citigroup
flirting with
$3... I mean, I
can’t do that to
you… at 62 years
old, I can’t do
it to you… I
will tell you
that the market
is saying that
Obama has a new
game… and the
new game is, if
you screw up and
you want money
from the
government… your
common stock
shareholders and
you are going to
have to pay… if
you don’t screw
up, you could
win… it is
called
capitalism… I
kind of get into
it frankly… it
is different
from that
Republican
socialism
communism, where
we just gave
everybody money…
as each
according to the
big TARP guy… so
I think that
Obama is onto
something… but I
also, well
people just say
all he does is
recommend stock,
all he does is
recommend
stock…. NO… and
you are 62 years
old and you need
the money…
municipal bonds…
what do you need
this nonsense
for? Maybe some
high yielding
common.
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Q:
I have a
question
regarding TARP
moneys, as an
investor would
one be better
off buying stock
in a national
bank, you know,
which has
accepted TARP
money, and is
willing to go
along with the
conditions
imposed by the
government?
Jim:
Only because of
the need to be
diversified
would I ever
recommend a
financial,
because there
are so many
financials that
are S&P… but no,
I have got a
million stocks
that are self
financing, that
do not need the
government, that
don’t need any
money from TARP,
that don’t have
any questions
about the
dividend, that
aren’t dependent
on Obama or
Larry Summers,
that don’t need
congressional
help… and I
would rather buy
any one of them
than I would any
bank stock in
this market.
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Q:
I still
think you should
be the head the
SEC... and...
What is your
play on
BB & T Corp. (BBT)? To
me it is more of
a regional bank,
the state of
West Virginia
does most or all
of its business
through BB&T.
And it’s price
to earnings was
around 8 or 9,
with a dividend
of I think $1.88
a share.
Jim:
Well I would
like to be the
head of the SEC…
already, there
was a pretty
critical article
today about this
Mary Shapiro….
how about how
she is just one
of these
regulators…
doesn’t want to
crack down… I am
not happy about
that selection…
Tim Geithner, I
told you not to…
look, I am not
thrilled… I
happen to like
Larry Summers..
but look, I
wanted some real
hard nosed
prosecutor to be
the head of the
SEC… or I wanted
someone who at
least knows
where the bodies
are buried, like
I do.... I
think BB&T is
the best run
regional bank…
it is the best
one… but there
is a thing
called the SKF…
which is this
bear pro ultra
shares that
allows all hedge
funds to gang up
on all bank
stocks and push
them down by
buying that… it
has been most
effective on
every single
bank… and it has
made so it is
just
treacherous… and
until we get a
new SEC Chairman
who looks at
these devices…
BB&T is a good
one… but you
know what, in
the end… I
recommend a bank
stock and it
goes down 25%…
people say that
I do not know
what I am doing…
I like BB&T… but
I am not going
to recommend it
here.
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[verbatim recap]
[end of segment]
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