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Monday, 07/14/08
Posted 07/15/08, 08:31
am ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Monday, 07/14/08 |
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Dow Jones: |
11,055 |
- 45 |
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NASDAQ: |
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2,212 |
- 26 |
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S&P 500: |
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1,228 |
-11 |
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Opening Segment 1
Title: |
'Mad Mission
Statement' |
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. . . .
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Featured Stock(s): |
No specific stock picks.
General comments.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: We've got
plenty of hot Mad Money
topics to talk about
tonight...
We've got the collapse of
the U.S. banking system,
at least as we know it...
We've got the President's
plan to drill offshore...
We've got some ideas on
how to make money off of
that...
But first, we've got to
cover some principals that
have governed this show,
Mad Money, from day one...
For those of you watching
for the first time
tonight... and everyone
else for that matter...
it's time for you to
un-learn a most pernicious
and widespread myth about
investing... one that you
may actually believe in...
I'm talking about the myth
of 'buy and hold'... the
idea that the best way to
invest is to find some
high-quality stocks, and
then own them forever...
Sadly, this is
conventional wisdom...
The pundits tell you to
buy stocks, and just sit
on them... because, if you
sell frequently, you're
going to have to pay
commissions... big deal,
commissions have been dirt
cheap for years... And big
capital gains taxes...
wait a second, they're as
low as we've ever seen
them!...
The doctrine of 'buy and
hold' says that, if you
find a good stock...
whatever that means to a
buy and holder... and, if
you just hang onto it for
decades... well, you know
where you'll end up...
house of pleasure.... Uh,
I don't think so... the
house of pain.
This show's about doing
exactly the opposite...
It's about the need to do
homework after you've
bought a stock... the
beginning is the buy...
then the work sets in...
so you'll know when to
sell... because, sooner or
later, you always have to
sell... And it's about the
psychology of helping you
stay in the game...
whether it be through
index funds, or the mutual
funds I've recommended in
Stay Mad For Life... or individual
stocks... but only if you
have the time and
inclination, because
stocks can be dangerous,
if you're building your
own portfolio...
The whole point of Mad
Money is to educate you
about stocks... about your
portfolio... so that you
can let your gains run
until you know you're
being piggish... and cut
your losses, before they
wreck your gains...
. . . .
.
The Bottom Line!:
I'm here to save you from
a 'buy and hold'
strategy... That's a
strategy that could have
lost you oodles of money
in the past year.
I'm here to show you that,
while it does take work to
be a good investor...
homework... I believe the
results are worth the
effort. And, you
know what? If I have
to light my pants on fire
to do it - and I can get a
permit from the fire
marshal - I will!
. . . .
.
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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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na |
na |
na |
No specific
stock picks.
General
comments.
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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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 2
Title: |
'Financial
Freedom' |
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. . . .
. |
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Featured Stock(s): |
No specific stock picks.
General comments.
|
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|
After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC: After the
events of this weekend,
it's no surprise that the
financials got
carpet-bombed today...
With the few financial
stocks, Washington Mutual
actually getting new...
can you believe that this
guy is still the CEO... I
mean, the
Wall of Shame,
does it mean nothing to
this government?... This
man (pointing to Kerry
Killinger, CEO of WM) has
systematically presided
over one of the greatest
meltdowns in history, but
nobody seems to care,
except Cramer... I feel
like I come out here every
day and just repeat the
same old, but correct,
party line, that you can't
own the financials or the
homebuilders...
Over the collapse of a
bank that I have despised
and trashed to you
repeatedly,
IndyMac
(IMB),
on Friday... Which by the
way, is leaving the FDIC,
our banking safety net
with far less money than I
think it will need... And
with
Fannie Mae (FNM)
and
Freddie Mac (FRE)
suddenly about to be
owned, perhaps, by us,
through a federal
government bailout... We
need to figure out what
this means for you as a
bank depositor and
possibly a bank share
holder, or a homeowner, or
a potential one...
I want to make this
clear... I think what the
government is doing for
Fannie and Freddie, while
great for anyone who's in
the market for a mortgage,
is pretty much irrelevant
to the banking stock
sector... See, banks trade
primarily on earnings and
dividends... And right
now, few of them have any
of the former, so they're
cutting or eliminating the
latter... In fact, most
banks have gigantic losses
because they lent money to
home buyers that they will
never see back again...
They have what's known as
non-performing assets,
which are wiping out
whatever gains they might
have...
But I don't want to be the
Herald of purely bad news
here... See, there is a
silver lining... And it's
this, and I want to be
real clear...
Your deposits are safe...
I don't think you have to
go make a run on your
local bank... And with the
infusion of cash into
Fannie and Freddie, it may
have just gotten a little
easier for you to sell
your house... Those
organizations matter... I
believe it's the stocks of
the banks and the stocks
of the homebuilders that
you do have to worry
about...
But I don't want you to
fret about a second great
depression...
Nevertheless, when it
comes to those stocks, the
example of IndyMac, and I
think there will be many,
many more IndyMacs and
bigger IndyMacs coming
soon, that should be
enough to warn you away
from these stocks... Can
you believe that this
reckless beyond belief
lender, IndyMac, actually
criticized me a few months
ago on their conference
call... Telling us that
people will never walk
away from homes, they're
underwater it... Like
Cramer says they would...
It takes someone who used
to work at Countrywide,
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