Jim:
Tonight... tonight
we come together...
to celebrate the
joys of the collapse
in the price of
oil... joys that
have been
overshadowed by the
endless parade of
bad news from
corporate America.
How the heck can we
not celebrate a
decline in the price
of crude? We have
two forces in this
country... that are
in a foot race to
define the economy
and the market. A
foot race that pits
the good news, like
mortgage
financing... rates
are going down...
cheaper home
heating... and soon
to be $1.50 a gallon
of premium
(gasoline)...
against the bad
news... forces of
dark... the ability
of companies to
borrow money, and
the tremendous
ability of companies
all over the globe
to fire people, and
create
unemployment... with
the exception of the
now protected auto
industry. I wouldn't
say that the Bush
bailout brings GM
and Chrysler back to
life, but at the
very least, I think
it makes them undead
zombies that each
taxpayer dollars am
not your brains...
Now, this week, we
got a ton of signs
that the forces of
good might be
winning the foot
race vs. the forces
of evil, going into
the holidays...
Mainly, we felt like
the positives would
prevail, because of
the many signs that
the consumer may
actually be alive
and well...
Now nothing will
trump the negative
of 10%
unemployment... if
we get there... but
it can head off what
I would regard as
being the drastic...
drastic decline in
everything from
credit cards, auto
loans, student
loans... if we can
make it up in
consumer spending.
Then we might get
out of this nasty
recession... with
just a nasty
recession.
Now the first sign
that we got came
today... last night
actually, but you
saw it in the
stock... which was
up huge...
Darden Restaurants (DRI)...
great numbers...
where Cramer faves,
Red Lobster and
Olive Garden, put on
some darn quarter
over quarter
comparable store
numbers. You have to
be impressed with
how much people are
taking the dollars
they are saving on
gas and mortgage
rates, and going out
and spending them at
restaurants. This is
a new trend...
See all
of
tonight's
stocks
mentioned
on
Yahoo!
Finance,
here...
Friday,
December 19, 2008
(Cont'd from
above)...
Jim (cont'd):
If there's one thing
we know how to do in
America -- although
we seem to have
forgotten it during
the summer and fall
until now -- it is
spend money. And it
looks like that,
once again, we have
that ability. Now is
there any better
barometer than the
positive numbers
these two restaurant
chains gave us?...
Look, honestly... if
things were really
that bad, I would
have pegged Red
Lobster and Olive
Garden as having
high single-digit
losses...
The second good
sign...
We got some great
numbers last night
from
Research
In Motion (RIMM)...
A lot of people were
bummed last night,
and early today...
wrongly... because
they thought that
RIMM didn't make all
that much money from
their sales... but
that's because
people don't
understand how to
trade technology...
These aren't the
cereal companies
where we're looking
for improving gross
margins... how much
a company makes from
its sales after its
costs... We measure
tech stocks from
what's known as the
top line... a.k.a.
revenues... and the
new Blackberry
devices blew the
doors off the sales
numbers! The profits
should come in...
that's the pin
action... That's why
RIMM rallied 11.4%
today. You cannot
get that kind of
sales that RIMM had
it the customer is
falling off a
cliff... It's really
that simple...
How about the
positive last night
when we heard from
our very own friend
Jim Senegal, the CEO
of
Costco (COST)...
saying that business
is brisk and sales
are holding out...
and I think, once
again, that can be
attributed to be
declining gas.
Finally, on the good
news front, there's
Macy's
(M)...
Going into the
holiday season,
there was a ton of
worry about Macy's
on the Street...
The company has a
big slew of debt
that comes due next
year, and the Bears
were growling,
saying that CEO
Terry Lundgren
wasn't going to get
out of this
Bond-like jam...
Sure enough... he
got a sweet deal
from J.P. Morgan to
roll over his
debt... Macy's is
now out of the
woods, and it would
not be out of the
woods if sales going
into Christmas were
that disastrous.
I think that the
fallout from low oil
will be the theme
all next week... so
I think you have to
have a game plan
with this... you
have to buy the
stocks that benefit
from cheap oil...
Now this is a mighty
bullish theme for
other restaurants
and retailers... and
the two that come to
mind is Cramer fave,
and
ActionAlertsPlus.com, my
charitable trust
stock,
Wal-Mart (WMT*),
and
Panera Bread Co.
(PNRA)...
Why these two?...
Well, it's simple.
They're the best
ways to play the end
of the year rally,
because both are
year-to-date up...
and won't be pushed
down by tax loss
selling... Plus, you
know how it works...
I think big money
managers will buy
them to show their
clients how smart
they are, and they
dress up their
portfolios for the
end of the year...
they like to buy
winners.
Now, because I'm
also a patriot... I
have a plan that
would allow the
United States to
capture the gains
from low oil...
When Obama takes
office, he needs to
build facilities to
store oil...
tankers, tanks,
whatever... we are
just plain out of
space right now.
This is the time,
right now, for
America to buy all
the oil -- down
almost 5 years from
where it was -- all
the oil we can get
our hands on,
because it's so
cheap, and we know
that eventually
long-term it can
stay that way. It is
a once-in-a-lifetime
opportunity to build
enough tankers and
oil tanks to sop up
supply... We can
drill for new oil
economically at
these prices... we
can buy it on the
open market and
store it. I say we
create a second
massive strategic
oil reserve so we
will never be hurt
by high oil prices
again the way we
were earlier in this
year.
The ridiculous run
up in the price of
oil was disastrous
to consumers and
really accelerated
the recession. We
need to buy enough
oil at these low
prices and store it,
so our government
will be able to
bring the price down
all by itself the
next time we get a
speculative run
up... simply by
releasing its
reserves or selling
some options on
it...
If Obama listens to
my plan, then you
want a whole new
group of
infrastructure
stocks... that have
come down and come
down huge... that
build these
things... and I'm
talking about
Jacobs Engineering Group,
Inc. (JEC),
Fluor Corporation (FLR)
and, most
importantly, one
that I had really
written off...
Chicago Bridge & Iron (CBI).
Yeah, we said no to
all kinds of these
infrastructure names
but, if Obama
listens... and,
remember, I'm
telling you, they're
watching the show
now... and if each
really creates a
massive strategic
oil reserve, a
second one, those
will be the
winners... He might
even do it, since
somebody on his team
is obviously
watching the show...
Here's the bottom
line...
▼ ▼
▼ ▼
▼
The Bottom Line!:
The big theme next
week is cheaper oil
and cheaper gasoline
that will register
with people, because
they will pump... It
was partially
overshadowed this
week by news about
unemployment claims
and all the rest
that... credit
downgrades for the
banks... but I think
it will be all
anyone talks about
in the week to
come... My favorite
ways to play it are
Wal-Mart (WMT*),
and
Panera Bread Co.
(PNRA).
