"Jim, but how do you know that China is for real?"
How many times a day do I get that question? It has been my position since December that China is going to break out of the tailspin first -- it is why I have been buying the iShares FTSE/Xinhua China 25 Index (NYSE: FXI) (Cramer's Take) exchange-traded fund all the way down, even as it should be up -- and that it could lead us back.
That's because China's stimulus plan is more about saving lives -- the lives of the people who run the country -- than jobs. That's stronger incentive.
Last night, in still one more huge up session, Shanghai pulled into the middle teens of appreciation. That's just too great not to believe something real is happening.
That, plus the outstanding increase in the Baltic Freight Index to over 1100, tells me there is more ahead.
On Tuesday, my colleague Matt Horween, who has been pushing me on this China thesis from day one, pointed out that Terra Nitrogen (NYSE: TNH) (Cramer's Take) has been on fire. It's the only fertilizer I have been recommending and that's because of the dividend. While I feel that I am being piggy hanging out with TNH here, Matt has convinced me that maybe bulk agricultural products like fertilizer are being shipped aggressively to China.
I think these are all of a piece. China doesn't do anything small. It will build big, it will feed big, it will use energy big, it will buy big, and we should do everything we can not to stand in the way of China even though it is clear that a Democratic U.S. president and his Treasury secretary aren't going to be out there being all warm and fuzzy with the Chinese.
Do not scorn this move. In a universe where every day I see companies' prospects get worse, not better, China is the only good game in town, and on Earth, for that matter.
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 the iShares FTSE/Xinhua China 25 ETF.
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Reader Comments (Page 1 of 1)
2-04-2009 @ 12:41PM
beachpaul said...
But does it sell "big"? If they can't export what they manufacture because importers have no demand for it, how will they turn it back into money? Internally? That's a big bet, Jimbo.