Last night there was an interesting edition of MAD MONEY on CNBC. Jim Cramer came out and did a review of many different picks that Warren Buffett has as Berkshire Hathaway (NYSE:BRK.A) holdings.
Two picks that Cramer was very positive on were Wal-Mart (NYSE:WMT) and American Express (NYSE:AXP). For some conjecture here, or a mini-critic round of the master critic: these are both DJIA components, and frankly both are in a good spot. American Express is now cheaper than MasterCard (NYSE:MA) on most metrics, and it has longer-standing and better management. The fact that American Express has the best credit customers of all major credit cards is worth more in any soft economy than any other credit card issuer. Wal-Mart is a name that was just too hard to not comment on, particularly since I have been so anti-Lee Scott up until recently. He may have saved his beck by keeping himself out of the live media, but more importantly the company has finally gone "shareholder friendly." Even better than that, it has finally figured out it's not a growth stock and acted like it even read my 10-step program to fix itself.
Jimbo had a couple picks he didn't like from Warren Buffett's Holdings. He panned Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ). For some conjecture here, it is easy to hate J&J right now. The company's best days have been behind it and there is nothing cheap about it. My only issue is that since so many people have gone negative, a true contrarian would lick their lips over it. But on Procter & Gamble (NYSE:PG), this one isn't so much of a pan. It has major depth into markets and has major brand protection now that it owns Gillette. The P/E of 21 seems high for a consumer staples stock, but this one can do well in good markets and in bad markets because it is defensive and still has growth.
If you want to pain through the entire list, Cramer actually reviewed 20 Warren Buffett Picks. You can read them in the first 10 grouped together or the second group of 10 Buffett reviews.
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in any of the companies he covers.
Last updated: May 22, 2012: 04:09 AM
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Reader Comments (Page 1 of 1)
6-22-2007 @ 12:33PM
agavemail said...
I have to admit that every few weeks I will watch 10 minutes or so of Cramer. But I find him to be a joke. When I trade I want to know my entry point, my exit, what my stops are, my time frame, is it a swing trade, a day trade, an investment, a news trade, earnings trade, long term, 6 months, 1 month, longer then a year, etc. Never do you get all this info from him. Yet successful trades require (at a minimum) this homework. Anything less and you're just following a clown.
6-22-2007 @ 1:27PM
William Martin said...
Surely you know by now how I feel about anything "Fireball" Cramer says. He will never be in the same league with Warren Buffett and him reviewing Buffett's holdings is a real stretch. I quit listening to Cramer on any level several months ago and I can sum Jim up by my old saying:"allow fools to be fools as long as they are happy".
Billy Martin
6-23-2007 @ 12:32AM
Cynthia Aiken said...
I watched Jim Cramer for years and now believe him to be nothing but a showman; certainly not a credible businessman. He is simply a big joke.
6-24-2007 @ 2:59PM
Jim Sullivan said...
Agavemail's comments are worthwhile addresssing:
He is right in wanting the information he needs to trade seriously. But he can hardly expect Jim Cramer to do all his homework for him. If one takes away that naive criticism by agavemail, I would say Jim Cramer did a creditable job in comparing his stock picks with Mr. Buffetts.
posted by Jim Sullivan
6-25-2007 @ 9:22AM
Al Phillips said...
Apparently agavemail, Billy Martin and Cynthia Aiken have never read Cramer's book Real Money....otherwise they would recognize that Cramer's show is just that a show, like every other show featuring investing, but the man behind the show has credibility few can match.
Buffet is an expert at certain types of investing; he is not the panecea for all investing. Cramer is good at what he does; perhaps as good as Buffet is at what he does.
Al Phillips
6-28-2007 @ 3:10PM
Joe Ponzio said...
From a business investing standpoint, Buffett's purchase of JNJ was spot on. It has a ton of Free Cash Flow, it does a great job of increasing its Shareholder Equity, and management is maximizing its invested capital - generating $0.21 a year for each $1 of assets and borrowings.
To top it all off, JNJ is at a 25% discount to its intrinsic value - a discount that will provide Berkshire with a handsome return even if growth slows in the future.
There is a full analysis (from a business perspective) here: http://www.fwallstreet.com/blog/00000004.htm. Buffett doesn't care about tomorrow's stock price, but can reasonably expect to double his money in four or five years with JNJ.
Cramer and Buffett are on opposite sides - Cramer trades stocks, Buffett buys businesses. Anyone who thinks the two are related is nuts.