TheStreet.com's Jim Cramer says if you don't want to wait for a pullback, look abroad for the next leg or find values at home.

What do you do when everyone knows we have come up too far, too fast; no one knows who is actually buying; and we are going into earnings season?

What do you do when the animal spirits are taking up the market and yet other than a handful companies -- Research In Motion (NASDAQ: RIMM) (Cramer's Take), Xilinx (NASDAQ: XLNX) (Cramer's Take), Corning (NYSE: GLW) (Cramer's Take), Best Buy (NYSE: BBY) (Cramer's Take) and Taiwan Semi (NYSE: TSM) (Cramer's Take) -- almost all companies that have spoken during the "off-season" earnings reports have been dismal?

Ken Heebner, who is the long-time manager of the CGM Funds, isn't afraid of risk. He often concentrates his portfolio on a few industries and is willing do dump stocks if conditions change.

Over the long run, the strategy has been a winner. But, of course, there can be some scary moments, such as this year (but who hasn't had troubles?)

So, now what is Heebner focusing on? It's the financials. Interestingly enough, up until summer, he was aggressively shorting the sector (this is according to the Wall Street Journal, which is a paid publication).

Let's face it, the banks and insurance companies are getting a flood of government money, with fairly easy terms. And, as seen with recent trouble-shooting with Citigroup (NYSE: C), it looks like the U.S. government won't let the big banks go down. In fact, Heebner has a $1 billion dollar position in Citigroup. What's more, about 40% of the CGM Focus fund is in financials.

Heebner is encouraged by the historically low levels of key metrics. For example, the top 20 U.S. banks have a price-to-tangible book value of 1.1X. This compares to the typical multiple of 2.7X.

OK, what are other financials that Heebner likes? Some include Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC) and even Banco Bradesco (NYSE: BBD).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

MOST NOTEWORTHY: Targeted Genetics, Tesco and The9 were today's noteworthy initiations:

• Rodman initiated Targeted Genetics Corporation (NASDAQ: TGEN) with a Market Perform rating, citing lack of key near-term drivers and the absence of definitive proof-of-concept data for its lead arthritis program.
• ING assumed Tesco Plc (OTC: TSCDY) with a Buy rating, citing the company's growing international business.
• Piper initiated The9 Limited (NASDAQ: NCTY) with a Neutral rating and $21 target, citing limited visibility around the company's FY08 and FY09 game releases and a higher risk profile than peers.

OTHER INITIATIONS:

• Baird initiated Gladstone Capital Corporation (NASDAQ: GLAD) with a Neutral rating and $19 target.
• Goldman initiated Brazilian banks with an Attractive view, starting Banco Bradesco SA (NYSE: BBD) with a Buy rating, Banco Itau Holding Financeira SA (NYSE: ITU) with a Neutral rating and Unibanco-Uniao de Bancos Brasileiros (NYSE: UBB) with a Sell rating.