These year-over-year declines in energy costs along with the inability of the Chinese market to fall much further are the two bright spots that long-term investing can give us. The notion that there are consumer-products companies that have put in price increases that for the most part are sticking and that the developing world could come back with lower rates, makes me feel that the Unilever (NYSE: UN) (Cramer's Take)/Procter (NYSE: PG) (Cramer's Take)/Colgate (NYSE: CL) (Cramer's Take) cohort could have a remarkable rally.
But not until after this current quarter, because the price decreases have been incredibly slow to come in and the dollar is so strong.
I key on those because frankly, oil looks like it is going to struggle to hold $50, and while that is a sure sign of a terrible recession coming, it is, alas, good news for the companies like Kellogg (NYSE: K) (Cramer's Take) and General Mills (NYSE: GIS) (Cramer's Take) that use energy and whose product pricing has held.
Oil going down is good. It isn't what this particular market wants -- this market needs those stocks up no matter what because of the trapping of the hedge funds -- but it will be good.
Why point it out?
Because I think this year will be a washout. You have to think about next year. With oil at $50 and going a little lower, energy users that don't have to roll back prices to consumers will be the best game in town. The year-over-year comparisons beginning at the end of the first quarter will be like a windfall of unbelievable proportions, and you will want to be in them before it happens.
Why even bother to point this out? Because the gloom is beginning to anticipate horrible things for all companies, but horrible things for energy simply removes the possibility of horrible things for all companies. It's one of the rare positives in an endless litany of negatives.
Jim Cramer is co-founder and chairman 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 was long Unilever, Procter & Gamble and General Mills.
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Reader Comments (Page 1 of 1)
11-20-2008 @ 9:53AM
art said...
art the transmission man You no I am just a small business man
but unless fuel comes down and stays down long term we are never going to get out of this mess. And also where we need gov in or lives is get after the companys that have added fuel surcharges and still have not lowered or removed them.And fuel at the pumps in ny still has not dropped as fast as it went up. greed is a problem and needs an answer. And all other priceing that has gone up but has not come down.
11-20-2008 @ 10:03AM
art said...
Sorry. But I forgot a few other beefs the so called big three should hang there head in shame.I want to no why as big as they never competed with honda and toyota. That does not seem to concern anyone. If I make ice cream and then a nother ice cream store opens and offers different flavors and I start lossing bussiness one would copy or a least answer the other store with a simlar product. But not the big three there no better and never addressed the problem just keep turning out suvs until well now what.
11-20-2008 @ 10:36AM
nick said...
What a brilliant statement slug. What are you going to talk up today to get the folks to sell into the firesale?
11-20-2008 @ 10:36AM
wade said...
All this stuff that happened the last few years. its all a bunch of BS. First off the Media sais prices started gojing up from the gulf war then it was china and india sucking up everything then it was the refinerys could not produce the amount for demand and they would break or then it had to change from summer to winter fuels then it was speculators in the market. its amazing to me how stupid OUR GOV is. only thing it was that made prices go up was pure GREED. While the rich get richer the poor get poorer. I hope to see the greed of america stop. And our Gov to open there eyes before this countrys dies..
11-20-2008 @ 10:36AM
nick said...
What a brilliant statement slug. What are you going to talk up today to get the folks to sell into the firesale?
11-20-2008 @ 4:29PM
Joe said...
Thanks JC for finally pointing this out! Bravo!! ive been waiting. Now i cant complain you always focus on the neg. Now be a voice for us. Ive wrote senator after senator. Why Jim dont we go back to the idea of letting the consumer write of interest in a car loan? (just like a house) This would be systemic 3 pronged. Demand lift for detroit. Get the banks involved in loans. Give consumer chance to bailout Detroit with them getting benefit and not just handing a bad business model billions? this seems soo darn simple and logical. Jim. please your thoughts on this!!
11-20-2008 @ 7:03PM
ynot said...
Now we go from Mo Money, Mo Money, Mo Money toooooo, you got it, No Money, No Money, No Money.
11-20-2008 @ 9:12PM
beachpaul said...
Boon next year? Boondoggle. Jim have you ever thought about selling real estate. No one believes anymore. The government, Wall St., Big 3, Google, Media, Private Jets, Talking Heads, The Fed, Banks, no one believes them anymore. Point that out.