TheStreet.com's Jim Cramer says you can use the bounce today to sell names with earnings troubles. A suggestion: If you know that your company has earnings problems, you are going to get a lift today that will allow you to get out at a better price. What do I mean about earnings problems? Let's consider Alcoa (NYSE: AA) (Cramer's Take). That was a dismal quarter. The stock would not be up if it weren't for the rate cuts.
Or how about the financials? We learned last night that MetLife (NYSE: MET) (Cramer's Take) needed a lot more capital. We have to presume all insurance companies need more capital. So get ready or sell and buy lower. Citigroup (NYSE: C) (Cramer's Take) is in the same boat. It is not going to have a good quarter and it needs to do a capital raise. You are going to get a terrific opportunity to sell today.
I also feel the same for most retailers. We have to be very careful here because unless you are in a retailer that picks up share in hard times, you need to use the strength to sell.
What can be held? I think that you can keep the stocks with good dividends that are able to pay them. You can certainly buy stocks that are trading near their cash.
But in the end, I worry about earnings and I worry about the short-selling situation and I worry about bank seizures, because the FDIC's Sheila Bair has not said she will now suspend seizures because of TARP.
Oh, and one more thought about rate cuts: They help Main Street. They do not help stocks, at least this late, but we will see the prime come down, and that's good for the future.
So, if you have earnings worries on the eve of earnings, sell.
No earnings worries? Let it ride.
Sizable dividends and near cash, you can buy.
That's the prism.
Random musings: I continue to recommend gold. If they reflate, it works; if they don't, it might hold value because of fear. ... I am going to give a keynote address at the upcoming TSC 2009 investment conference, and I will still have ideas, but I will also have caution, and that's not something I am used to. But you know what? I am not used to a market where I fear for my own money in the bank, not in the stock market. That's a big difference from the old days, which was anytime before August of 2007.
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RELATED LINKS:
Central Banks Make Coordinated Rate Cut
Cramer: Interest Rates Need to Be Cut
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.
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Reader Comments (Page 1 of 2)
10-08-2008 @ 11:31AM
JCH said...
While I understand the preoccupation with gold, it really is just another metal - a quite abundant one.
10-08-2008 @ 9:27AM
robert said...
I have to tell you jim I respect who you are and appreciate your input but I think that your view is creating more fear.When you go on air and predict that tech is dead and compare those stats of the internet bust where there was no real money behind them just alot of hype of a new age future I have to believe that even you have no idea where this market is heading.I believe that many of these companies have more substance now than when the internet bubble burst.
10-08-2008 @ 9:32AM
Ken said...
We have finally arrived at the moment where we must examine how we got into this situation. Greed has led us to this brink, and Cramer here is fond of pointing fingers. But he can't or won't examine the most basic flaw of the market.
I'd like to ask Mr. Cramer if he would be willing to walk up to any American who has lost their job to an overseas sweatshop, and tell them "sorry, but you were lowering my profit margin." Blaming the shorts, or bad CEO's, or anyone else for what is happening now, is mere misdirection. If you throw money at institutions without concience, seeing that they couldn't care less about their employees, getting indignant when they turn around and screw you is just a bit hypocritical.
Your "valuation" is no different than the people you call unethical, or evil. If you don't care about what happens to your fellow man, but what you can get for yourself, you aren't any different. The only difference is scale. Buying a part of firing 1000 Americans, and creating virtual slaves in sweatshops is no less unethical than the system that has fired millions of Americans, and created a worldwide slavery market.
If you feel betrayed by the shorts, the CEO's, or the system, take a good look at your portfolio. What comes around, goes around. I feel just as betrayed by YOU.
10-08-2008 @ 9:59AM
cmist4evr said...
I have listened to you since you said months ago this thing could go as low as 10,000 by end of year and 8500 should be the base. You have not been wrong and the troubled banks fell in the order you said they would.
Thanks for keeping us informed. Good or bad informed is better.
10-08-2008 @ 10:01AM
Jon said...
Going on national television and declaring that everyone needs to get out of the market was irresponsible. He is just adding fuel to the panic. One has to question the motivation behind Jim Cramers comments and opinions. Will he reap a great personal profit when all the dust settles?
Jim Cramer just needs to shut up. The news media needs be a little more aware of the damage being done and cut him off.
10-08-2008 @ 10:22AM
Beltway Greg said...
Jim you need to calm down. Relax dude. Get yourself a Kosher frank and a grape soda and go sit in the park and watch the squirrels for a few hours.
Beltway Greg
10-08-2008 @ 10:29AM
EM said...
I FEEL LIKE TO TAKE MY MONEY FROM THE BANK AND KEEP IT AT HOME.
10-08-2008 @ 10:38AM
malcolm said...
If Jim didn't have his show on TV, he'd be broke.
10-08-2008 @ 10:42AM
Danny L. McDaniel said...
Nobody is calling this "crisis" for what it really is: the start of a weak depression. Until people stop going on television and looking for a bottom and saying the fundamentals are good - the same words used in early 1930- we can't deal with the problem at hand. The stockmarket is no place to be for awhile.
10-08-2008 @ 10:46AM
larry said...
Is this the same J.Cramer who was recommending buying stocks just a month ago? Glad I didn't listen to him.
10-08-2008 @ 11:35AM
Anthony said...
When the market was in a big rally last year and Cramer was in his prime, I read that if you sold short all the stocks that Cramer recommended, you would've done better than buying his recommendations.
Sorry, Jim Cramer, but you just follow the market after the fact. Your show should be cancelled, as the ratings have really dropped off. You would go broke if you didn't have the show.
10-08-2008 @ 11:40AM
Foster said...
What bounce, you dufus?? "Bear Stearns is a buy." You called the market bottom at around 11000 for the dow. Do exactly the opposite of what Cramer says.
10-08-2008 @ 11:54AM
J & I Stewart said...
Jim, It is people like you that cause the tank in the market. Try & keep you mouth shut for a change unless you really have something to say. Thanks
10-08-2008 @ 11:54AM
keith wunsch said...
jim ............calm down bro......your out of control...........cnbc needs to shut him down...........tell people to sell all there stocks ,while the day before telling people that stocks are cheap is pathetic....send him to the burn out home for wall st crooks..............thanks nbc
10-08-2008 @ 12:26PM
Kevin said...
Jim Cramer knows less than my dog. Go back and track what he has said over the past several months. Why in the world are you using this clown as an "expert". I'll have my dog come up with something. There might be SOMETHING useful in his comments.
10-08-2008 @ 3:50PM
paul larkin said...
jimmy carter said all this in the 70s no one would listen
10-08-2008 @ 4:56PM
Po Campo said...
I guess what people are sayin... and maybe there is some justification....When JC says (dont you love those initials).....trim your position in stocks by 20%.....it sends a signal. What some are not realizing is that if you dont....you may get your hat handed to ya...the market can fend for its self.....give me my money
10-08-2008 @ 4:58PM
Po Campo said...
Sounds like yall stayed too long at the party.........
10-08-2008 @ 8:46PM
J & I Stewart said...
Who are you really working for? It is apparent that you don't work or speak for the middle class. You are trying to scare the middle class folks into selling so the BIG GUYS can buy up that stock since the price will go down with all the selling. But some of us are much, much smarter than you and we are HOLDING, not selling at a loss for your folks to buy for a profit.
10-09-2008 @ 11:38AM
town crier said...
i remember last summer jc telling us buy high and sell higher. and, get ready for 500 point move higher in a single day.well the financial idiot savant was half right, we have had a couple of 500 point down days.
and getting on tv and telling everyone to sell in the middle of a panic is something any half wit can do.(this after calling a bottom several times).
however, i will say this, after the fact, jimmyis really good at tellingyou why some has happened. theproblem isto make money, the analysis has to right before the fact,not after.
to paraphrase another cramerism, after the first couple of prime relatedhedge funds blew up: "so what a couple of hedge funds blew up. nobody cares about a couple of hedge funds."