Friday, June 19, 2009
(Cont'd from above)...

Jim (cont'd):   

You know what they want now, you know what they're paying up for? They want a nerd stock! They want thousands of nerd stocks!... They want more nerds than you can stack in a "Nerd-A-Mid" (Jim then showed a pyramid made up of Wonka's Nerd candy stacked up)...

So now, all of the sudden, you know what they want?... They want General Mills Inc. (GIS*), up 5 straight points... Now they want Abbot "the nerd" Labs (i.e., Abbott Laboratories (ABT*), after its moved a half dozen clams. Now they've figured out that "Mr. Ed" nerd, or Consolidated Edison Inc. (ED), and Dominion Resources Inc. (D)... now they like them, up 10%, for those juicy nerd dividends!... Now they want to listen to how well Indra Nooyi (CEO) is doing at nerd Pepsi (PEP*)... the same people who could not care less at $50... at $54... they've decided they can't buy just one share but, like Frito-Lay's, they've got to buy thousands...

How much did people despise Gilead Sciences Inc. (GILD*) after that magnificent quarter?... Was it something about healthcare? Did they think Obama didn't like the revolutionary HIV medications? Is that what it was?...

What was wrong with nerd, Coca-Cola (KO), at $44... that's cured at $49?... Did Coke Zero suddenly taste better?... Maybe it was Desani... or is that the other guy?... Must be all the Zicam I used on my throat...

Did Cheerios become the rage?... General Mills (GIS*) did nothing... not even when the company said estimates were way too low...

My Dad's here tonight... a Family Affair... my dad, who knows... (applause) oh yeah, oh yeah... My dad who knows the best job I ever had wasn't Mad Money... it wasn't swinging around a half billion at a hedge fund... or hawking stocks and bonds at Goldman Sachs... It was pitching ice cream on the 600 and 700 level at the old Veteran's Stadium in Philadelphia... "Hey, ice cream here... hey ice cream... Vanilla and Chocolate!"...

We are going to talk a lot about lessons tonight... father and son and all... but the lesson you should learn from the job that I would talk about with my dad after every night at the park selling ice cream... well that's a lesson about getting it while it's cold...

Some like it hot, sure... but if you want to make money in the market, then you need to think about what's cold...

We all can talk about diversification on this show, and I know it makes your eyes glaze over... Still, there's nothing more important... Every time we get a selloff in what is known as the defensive stocks... the utilities like clean nuclear energy company, Exelon Corp. (EXC)... the old commonwealth ed (?) or the foods, like Kellogg (K) or Hershey (HSY), or the drugs like Lilly (LLY) and Celgene (CELG*), or the healthcare stocks, like Express Scripts (ESRX) and WellPoint (WLP), which I talked about the other night, because it doesn't have a lot of government exposure...

I come out here and I say that it's time to buy one of these...

It is totally counterintuitive, because these stocks, these nerds, are the furthest things from being hot... And I read the cat calls saying, "Oh, there goes Cramer flogging that J & J again," or "Can you believe he still likes Abbott"... But that's when
you must own them, when no one wants them, so you can get what's known as a great basis... a great entry point for a group of stocks that I believe should be absolutely owned in your portfolio.

As a matter of fact, I think you should have not one, but two nerds... two out of five... to be truly diversified. That way, unlike everyone else who's moaning and groaning, because all they have is oil and techs and banks - the three that had a lousy couple of weeks - you've got two stocks that are rallying beautifully this week, when the S&P was down, and so was the Dow, and that kept you in the game.

That's right, diversification is about keeping you from being blown out when we get a week or two like we just had... with a gigantic "Revenge of the Nerds" rotation, and you feel terrific about your portfolio.

Oh, the other guys moaning on the sectors that used to be hot... are choking on the nerds, for frantically buying them... on the way up?... And selling the now out of favor oils and banks and techs... on the way down? That's what went on this week.

You see, this way you can cheer, instead of tearing your hair out, whenever the nerds... those dirty-faced kids, who hide behind their collars... and rebel against the Coolio jocks, and overthrow the oil/tech/bank "gansta" paradise (making several references to lyrics from the songs that he's playing in the background)... and suddenly Kellogg's Frosted Flakes and Lilly's Cialis roar into favor... Now there's a combo...

So now... make me angry... go buy all of those companies that I've been telling you to buy now that they're up 10%... Go sell all the banks and techs and oils, now that everybody else is knocking them down furiously...

Let me let you in on a little secret...

You know what I want to buy now... now that things have cooled?...

Now is the time to buy a JPMorgan (JPM*)... I own that for my trust...

Now's the time to buy Apple (AAPL), down $10 from where it was...

Now's the time to buy an oil... Look at that BP plc (BP*) yield... It's at 7%. That was 6% last week.

Because now I think they are the "Ice Man"... and I "Commeth" big time to those losers, just like you should have come to the "nerds" when the nerds were losers, and we flogged them endlessly.

To everything, there is a season... to completely and utterly mix metaphors. I think you have to get ahead of the next season, buy buying JPMorgan (JPM*), Apple (AAPL), and BP (BP*) now, when they are hated... when they are hated... just as hated as General Mills (GIS*) and Dominion (D) and Gilead (GILD*) were just a few short weeks ago, when the nerds were bottoming.

The bottom line...

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The Bottom Line!:     This is why we stay diversified... because, if you'd own the defensives this week, along with the troika of techs, banks and oils... well, then you would have done okay... because two out of your five names (in a 5-stock diversified portfolio) would have been nerds bought on the cheap. As with everything else, diversification isn't enough. You also need good timing. And that means buying into weakness... it means you want to get em' while they're cold, not while they're hot.

[verbatim recap]

[end of segment]

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