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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 2 of 2)
10-13-2008 @ 8:22PM
mark said...
It is time to realize that moving U.S> manufacturing overseas to cut costs and remain competetive may be "good biz" to the mouse clicking stock guru,but that same move represents an unprecedented sellout that will come back to bite your ass.The quality and security of products made here sacrificed for short sighted profits and platinum parachutes has left this country without a middle class platform-the backbone of the nation is now demoralized-that happens to be the majority of Americans-who actually work for a wage & pay taxes.Not a shrewd move,for anyone.
10-18-2008 @ 11:26AM
Emmett said...
Jim,
Always said you have to do your own research and
not take his word as gospel. He is the most
knowlegeable person I have ever read and watched
on T.V. but he makes mistakes and I do not think
anyone really knows what is happening in the
stock market; you have to be a gambler and take
your chances. I have done well for 20 years but I
admit I listen to many different experts; do my
homework and the invest; never blindly.