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Friday, 02/08/08
Posted 02/09/08, 5:35
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Friday, 02/08/08 |
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Dow Jones: |
12,182 |
- 64 |
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NASDAQ: |
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2,304 |
+11 |
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S&P 500: |
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1,331 |
- 5 |
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Opening Segment 1
Title: |
'Cramer's Game Plan
For Next Week'
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. . . .
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Featured Stock(s): |
No specific stock picks.
See full comments below...
See Opening Segment 2,
below...
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JJC: The Game Plan
for not just next week
but, perhaps, the next
month... and maybe even
the full year... is all
about one word, and three
letters...
The word is "recovery"
and, for most of the
big-money managers out
there, recoveries come in
only three shapes...
An "L"... A
"U"... and a "V"...
This is a three-letter
game, and you need to
understand what the
proponents of each letter
think, in order to have a
clue about what's going on
in this market...
. . . .
.
If you think the economy
is going to come right
back, because of all these
Fed cuts and, perhaps, the
cuts to come... then,
what's you're betting on
is a "V"... That's
right, a "V" recovery,
meaning we're going to
snap right back to where
we were, before the chaos
began, one year ago...
Now, don't laugh please...
Lots of people actually
believe in this kind of
recovery...
We've had some of these
before.
Who believes? Well,
how about the people who
are buying the
homebuilders right now?
This is what they
believe... a "V"
recovery...
When you look at the
charts of
Toll Brothers (TOL)
and
Ryland (RYL),
and
Pulte (PHM)
and
DR Horton (DHI)...
the buyers here wouldn't
be taking these stocks up
so much, if they didn't
believe in a "V"
recovery...
These are people who,
despite the horrible
trading in this down-5%
week... the horrible
trading of
Bank of America (BAC)
and
Wachovia Corp. (WB)...
they're betting that BAC
is recovering now, and WB
is going to keep its
dividend safe...
because things are about
to get better fast, and
happy days are almost here
again...
They want to buy some
financial insurers...
They're actually debating
purchasing some MBIA Inc. (MBI)
or Ambac
(ABK)...
the most toxic of the
group... because
they're not in danger...
those companies are not in
danger, if a "V" recovery
is upon us...
I think these guys have
rose-colored glasses, like
you wouldn't believe...
I think they're being too
aggressive... too
assumptive...
They genuinely can make
the case that the Fed is
on the case. They
clearly don't believe
this... "They know
nothing!" (soundbite)...
and that the recession is
already coming to an
end... already!...
When the "V" enthusiasts
take over, we go higher.
These guys are huge bulls,
and I say, do them a favor
and sell stock to them.
They were absolutely
slaughtered today, along
with their optimism...
. . . .
.
On the opposite end of the
spectrum, you've got
people who believe this
recovery will be an "L",
or just a so-so bottom
that doesn't take a turn
up...
They really don't see a
recovery, as much as
stabilization, without
anything getting any
better... but the
stabilization is happening
at a lower level than
where this market is right
now...
These people are buyers on
dips only...
On the things that have
some, but not much,
cyclicality...
because they're worried...
You can imagine... if we
don't snap back, we're
going to be here for a
while...
So, what do they like?...
They like
McDonald's
(MCD*)...
They like
Verizon
(VZ)...
They're more buyers of
United Technologies
(UTX)
and
Honeywell
(HON)...
those companies did very
well this previous
quarter... and
they're saying to
themselves that, with
this, they won't get much
worse...
They like a
Pepsi (PEP),
if they can find it before
a rally...
When we're down big, the
"L" crowd has taken
control... and that's
almost always a good time
to buy...
These people are unexcited
about most stocks, and
only buy when they think
that the market reflects
still one more breakdown
from this level...
. . . .
.
Finally, there are those,
like me... who
believe that we are in for
a "U" recovery...
This could be months right
here. Maybe even
seven months, 10 months...
We think that the recovery
will be a slow and
grinding but, ultimately,
a successful exercise.
A "U" recovery means you
shouldn't be in any hurry
to buy...
So, wait for pullbacks,
like we got mid-day
today... and don't
get too excited about
anything, other than the
companies that will
ultimately come back six
to nine months from now...
no hurry...
It make take a year before
we get back to here
(pointing to the top of
the "U", on the flip
side).
People who are betting on
a "U" (recovery) believe
that this time next year,
things will be better...
So they're socking in some
retailers... Maybe
Kohl's (KSS)...
How about some J. C. Penney (JCP)?...
They like Jones Apparel (JNY),
which pays a good
dividend... They
like
Loews Corp. (LTR)...
Some would even step up to
Home Depot (HD)...
These people aren't afraid
of missing anything,
because they think the
market will come to
them... we're making
some time here...
They like the banks, but
they aren't chasing
them... because they see
this as a slow recovery...
and they know the Fed may
not cut much more...
They're worried about
dividend cutting, not Fed
cutting...
They make actually believe
in the silly Wall Street
Journal today that the Fed
is more worried about
inflation than
recession...
But that's not my kind of
"U" recovery...
Trust me, the Fed is
worried more about a bank
failure, and that's what
is motivating things.
. . . .
.
Nobody thinks things are
going to get worse,
because we eventually get
at least a leveling off...
right? None of
these three camps that
I've just described...
Not one of these camps
believes that we are about
to have another
breakdown...
That's because they all
believe, when the Fed
cuts, things get better...
. . . .
.
So it's just the three
letters of big money...
There are short sellers
who disagree, but the
mutual fund managers are
conditioned to "L", "U",
and "V"...
To believe we've got a "V"
recovery... Uh... too hard
for me...
To believe it will only be
this (holding up an "L"
recovery sign)... No.
Not bullish enough...
And to believe... citing
the Wall Street Journal
headline... that Mounting
Inflation Concerns Weigh
on the Fed's Next Move...
well, that too, is
wrong...
. . . .
.
Since I'm part of the "U"
school, I want
my charitable trust... to buy when
the market is swinging in
the "L" direction...
and to sell, when the
market thinks that the "V"
is about to take over...
This is too happy a
scenario, even for me...
. . . .
.
The Bottom Line!:
This
recovery is as easy to
understand as "LUV"... if
not A-B-C, or 1-2-3... to
give the Jackson Five
their long-awaited due...
Recovery comes in three
shapes, "L", "U", and
"V"... I believe in
"U"...
[See Jim's 2nd Opening
Segment stock picks
below... ]
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See all of tonight's stocks'
latest quotes on
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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Mutual-Fund-Holdings.com
NEW RESOURCE!
See Ken Heebner's CGM
Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
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Opening Segment 1
Title: |
'Carnival Cash'
'House Party'
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. . . .
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Featured Stock(s): |
Gafisa S.A. (GFA)
See GFA's official
website
here.
See the Yahoo!
Finance profile for
GFA
here.
See Opening Segment 2,
below...
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JJC:
If you want to own a
homebuilder that's
actually growing, not
shrinking... that
can actually raise prices,
not cut prices...
you know where you better
go...
You better go to Brazil...
All week, I've been
talking Brazilian
stocks... It's been a Mad
Money carnival...
and, even though it has
not been a drunken orgy,
which is how I tend to
view the real Carnival...
it has had some great
stocks...
. . . .
.
Today, I'm adding another
stock to the list... to the
Carnival float...
And that's Gafisa S.A.
(GFA)...
It's the #2 homebuilder in
Brazil, but the #1 Brazilian
homebuilder stock...
. . . .
.
[See Jim's past comments
on Mad Money about
Gafisa S.A. (GFA),
pre-searched for you
here >> ]
Note, as of 2/8/08, there were
no previous comments for GFA,
but that may change with
repeated mentions over time...
so it is still worth checking,
if you are reading this
recommendation at a later
time...
. . . .
.
The Bottom Line!:
Who
wouldn't want an
unbelievably-cheap play on
one of the best secular
trends in one the
strongest global
economies?... One that
can't be taken down by
America... Brazil!...
Gafisa S.A. (GFA),
frankly... of all the ones
I did this week, looks too
good to be true... but
it's not.
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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GFA |
30.85 |
31.68 |
Gafisa S.A. (GFA)
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Go to the LIGHTNING ROUND from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
tonight's show stocks
here >> |
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Symbol keys: |
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A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
of stocks
here >> |
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Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself. |
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Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself. |
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about. |
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Definitions of key phrases
used by Jim, known as
"Cramerisms": |
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Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back... |
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Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you. |
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Definition: 'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock). |
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Definition: 'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point. |
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See more
"Cramerisms" & other
financial phrases
here >> |
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Helpful Websites: |
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See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
jim-cramer-charitable-trust-stocks.com |
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See the stocks currently
known to be in Warren
Buffett's portfolio
of
stocks at:
warren-buffett-portfolio.com |
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Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
StockHomework101.com
This site is coming soon.
Thank you. |
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FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
Fast Money Recap - Trades
for next day...
Compare these picks to Jim's
comments for the same
stocks. |
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© 2005-2007 MadMoneyRecap.com ■
Important disclaimer: This site is
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thumbs up or thumbs down
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interpreted by us as accurately as
possible. Some comments have been
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and extraneous material omitted. Please rely on watching
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