Jim Cramer's Mad Money Review

Cleveland Cliffs (CLF), BHP Billington (BHP), Freeport-McMoran (FCX), Boeing (BA), Potash (POT), Deere (DE), Schlumberger (SLB), XTO Energy (XTO)
Tuesday saw the return of Cramer's five long-term bull markets: aerospace, minerals and mining, oil and oil service, agriculture and infrastructure, and those who believe that recovery is coming ruled the day. Aerospace was lifted by BA's news that, after several delays, the delivery of the long-awaited 787 Dreamliner may come on time. News of coal and copper shortages was good for BHP Billington and Freeport-McMoran. Cramer also recommended Cleveland Cliffs. Potash rallied after a bullish interview with CEO Bill Doyle. Cramer also mentioned his favorite ag stocks, Deere, and suggested investors buy more rather than worry about the sector on the next down day. Oil is well after Bear Stearns' upgrade of SLB and XTO's strong earnings. Infrastructure got a lift from Buffett's bid to rescue bond insurers, but Cramer warned that all of these gains could disappear, given how quickly the market has been moving.
CEO Interview: David Novak, Yum! Brands (YUM)
Cramer said Yum is one of the most pro-shareholder and pro-growth companies he has seen and is impressed by YUM's aggressive moves into China. In 2007, one new store was opened in China every day and three a day were opened in December 2007. Novak said the company's performance reminds him of how McDonalds began its initial expansion in the States. Domestic growth has not been forgotten, said Novak, adding the company will concentrate on desserts, healthier offerings and new beverages.
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Labels: BA, BHP, CLF, DE, FCX, Jim Cramer, Mad Money, POT, SLB, XTO, YUM

On Tuesday's show Cramer gave out 5 rules for investing in the stock market. His first rule is that there is a market for everything, including the stocks themselves. He said an example was how ethanol stocks were very hot about a year ago, and then several IPOs came on the market, so there was an oversupply of ethanol stocks on the market and the entire sector went down. So the ethanol business and news didn't matter because there were too many ethanol stocks available. Cramer said another example was his recommendation of Sealy (ZZ) at its IPO where he liked the stock, but didn't realize that there was a glut of IPOs, so the IPO market was saturated and the stock tanked.
Cramer took soma calls. The first caller asked how you can know whether an IPO is a good investment or not, and Cramer said that the key is the offering price for the shares. Another caller asked if there are any sectors that Wall Street overlooks, and Cramer said that you should look for a sector that used to have 10 analysts and only has 1 or 2 now and consider that sector for a turnaround. The next caller asked about the Vonage (VG) IPO, and Cramer said that this IPO was overhyped and that they should not have let the company sell stock to its customers.
Cramer's second rule is to know what you own. Sectors don't always matter since stocks within a sector can rally without others. Industries within a sector are the key to rallies, not the sector itself. An example occurred a couple years ago when he called for a tech rally and recommended Cisco (CSCO) and Microsoft (MSFT) because they were the big tech stocks, and he should have been thinking more specifically about the gadget industry within tech, since stocks like Apple (AAPL) were up big. He also said that he wants you to do at least 1 hour of homework each week for each stock you own. He thinks you should give your money to a mutual fund if you don't have enough time.
A caller asked why you don't see big rallies in the biotech sector, and Cramer explained that biotech stocks are moved by FDA rulings, not broader industry moves. The next caller asked how to find the pin action within a sector that Cramer talks about, and he used an example where Boeing (BA) reported a great quarter, and you should look to see who makes the components of the planes they make, since their sales will rise with Boeing's. The next caller asked how to predict performance if a sector is split, like Internet search with Yahoo! (YHOO) and Google (GOOG), and Cramer said that you need to look at management and other company specific factors in that case.
Cramer's third rule is that Latin America should always be treated as a shorter term trade since Wall Street has preconceived notions about the region that prevent it from being a long term investment, and they are the ones who move the market. You should always take profits as a Latin American stock moves up so you don't get caught when the big investors move out of their trade. A caller asked how important our economy is to Chinese stocks, and Cramer said that he doesn't like to recommend Chinese stocks because he doesn't trust their economy. The other caller asked about stocks like Wal-mart (WMT) and Starbucks (SBUX) that are expanding in China, and Cramer said that Starbucks could be the next Yum! Brands (YUM) which doubled their stock price after they doubled their stores in China.
Cramer's next rule is that being a lemming is ok, but he still wants you to go your homework, but if you agree with the moves that big investors are making, then it's good to go with the momentum.
His last rule was to not be afraid to say that something is too difficult to invest or trade on. His example is restaurant same store sales, which he has been crushed on in the past since there are so many factors that contribute to the number and the reaction. He said you aren't being weak, but smart by focusing your time someplace where you can make money.

Labels: AAPL, BA, China, CSCO, GOOG, IPO, Jim Cramer, Lightning Round, Mad Money, Mad Money Lightning Round, Mad MOney Recap, MSFT, SBUX, VG, WMT, YHOO, YUM, ZZ

Cramer continued his Back to School Tour today at Georgia Tech. He began by talking about InterContinental Exchange (ICE), which is up 131% since Cramer recommended it last March, and he thinks it still has room to go up since it profits off the volatility in the commodity markets. Cramer also thinks that this exchange might be bought out by NYSE EuroNext (NYX) which will bail him out of his NYX recommendation, which has been killing him all year. He believes NYX could pay up to $200 per share for the company. Cramer then took some questions from the audience. The first question was about exchanges investing in China, and Cramer said that he thinks Coca-Cola (KO) and Yum! Brands (YUM) are the best ways to play China.
Cramer then interviewed the CEO of Coca-Cola (KO), and they talked about the earning prospects for the stock and its international growth plans. Cramer is bullish on the stock, and is a fan of the CEO.
After the lightning round Cramer went over some stock picks with the Georgia Tech investment club. Nokia (NOK): Cramer thinks this stock is a winner. Grant Prideco (GRP): Cramer likes TransOcean (RIG), Halliburton (HAL), Schlumberger (SLB) and National Oilwell Varco (NOV) are better stocks. J Crew (JCG): Cramer said to back up the truck and buy this stock. Fossil (FOSL): Cramer doesn't like it as much as J Crew, and that he is worried about retailers that have had good runs recently.
Finally, Cramer ended the show by spending some time talking to students about the stock market and the economy.

Labels: Georgia Tech, GRP, HAL, Jim Cramer, KO, Mad Money, Mad MOney Recap, NYX, RIG, SLB, YUM

U.S. stocks headed for a lower opening Monday after putting up big gains last week and as investors readied for quarterly corporate earnings reports.
With the Treasury bond market closed for the Columbus Day holiday and no major economic news expected, stock market investors will be looking for any corporate news to guide them.
The third-quarter results being reported will reflect the difficult times some companies have faced -- particularly in the financial sector -- following upheaval in the credit markets and amid a souring of some home mortgages. Ahead of the bell on Monday, Dow futures fell 26.00, or 0.18 percent, to 14,130. S&P 500 index futures fell 5.60, or 0.36 percent, to 1,565.10, while Nasdaq composite index futures fell 6.25, or 0.29 percent, to 2,164.50.
Light, sweet crude fell 65 cents to $80.57 per barrel in premarket electronic trading on the New York Mercantile Exchange.
News from companies over the health of their profits and comments about their expectations for the fourth quarter are likely to draw attention on Wall Street this week. S&P expects tepid results, predicting a modest decline in total earnings per share for S&P 500 companies. However, it expects growth in the fourth quarter.
Among companies Wall Street will be looking to Monday is Yum Brands Inc. The parent of fast-food chains KFC, Taco Bell and Pizza Hut, is slated to report results Monday.
Overseas, markets in Japan were closed for a holiday. In afternoon trading, Britain's FTSE 100 fell 0.43 percent, Germany's DAX index fell 0.24 percent, and France's CAC-40 declined 0.23 percent.
Source: Tim Paradis, AP Business Writer

Labels: Dow Futures, Home Morgages, NMX, Stocks, Sweet Crude, YUM

Labels: ACAD, CHL, CROX, GS, Jim Cramer, LULU, Mad Money, MCD, NSTK, NVDA, PCAR, SBUX, UA, WB, XING, YUM

Paccar (NasdaqGS: PCAR - News) and Cummins Engine (NYSE: CMI - News): A Bear Stearns' upgrade of outperform from neutral brought CMI up 11% and PCAR to 6% on Monday. Cramer says these companies have further to rise.
Olin (NYSE: OLN - News) and PPG (NYSE: PPG - News): Acquisitions in the chemicals sector could mean that "cheap" plays OLN and PPG could be bought, according to Cramer.
Brinker (NYSE: EAT - News), Buffalo Wild Wings (NasdaqGS: BWLD - News), Chipotle (NYSE: CMG - News), McDonald's (NYSE: MCD - News) and Yum (NYSE: YUM - News): A Morgan Stanley report which indicates private equity's reluctance to rescue EAT may send restaurant stocks down. Cramer chose a select few worth buying including BWLD, CMG and international plays MCD and YUM.
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Labels: BWLD, CMG, CMI, EAT, Jim Cramer, MCD, OLN, PCAR, PPG, Stop Trading, YUM

Caterpillar (NYSE: CAT - News): Cramer thinks the downgrade of CAT was mistaken, because it is not levered to housing, but to BRIC as well as the Middle East and Asia. He predicts machinery stocks are this era's growth stocks and will benefit form the weak dollar because of international exposure.
Crocs Inc. (NasdaqGS: CROX): People keep asking Cramer how long to hold CROX, and he suggests hanging on until the last firm rolls out coverage. "Once it's sponsored by everybody, then you've got to vamoose," he said.
Yum! Brands (NYSE: YUM - News): Despite some yucky incidents, like the ecoli outbreak and rat infestation in a New York City KFC, YUM is up 11 points. "When I see it happen, I am supposed to stop shopping? Nobody else did." Cramer says the stock is "screaming higher" to $70.
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Labels: CAT, CROX, Jim Cramer, Stop Trading, YUM

Bullish calls:
Bank of America (NYSE: BAC - News): 'I like the stock very much here ... good yield, nice growth path, is not going to set the world on fire. ... I say buy Bank of America.'Level 3 Communications (NASDAQ: LVLT - News): 'Some people think I run hot and cold. ... I like LVLT. ... I endorse LVLT ... gonna close a deal soon with Broadwing (NASDAQ: BWNG - News). I am going to stay behind that thing with a TripleBuy.'ConAgra (NYSE: CAG - News): ' ... run, don't walk, into ConAgra, which is one that we nailed nine ways to Sunday.'Quest Software (NASDAQ: QSFT - News): 'The jury is still out. ... I like the core business. I want you to stick with it.'ConocoPhillips (NYSE: COP - News)Denny's (NASDAQ: DENN - News): 'For pecking order, I like Denny's, Brinker Darden ... 'Safeway (NYSE: SWY - News): ' I can't get behind a supermarket other than Safeway.'
Bearish calls:
CBOT Holdings (NYSE: BOT - News): 'We don't need to put any more money in those stocks. We are now in the 'don't buy' mode until that deal [with the Chicago Merc] closes.'FedEx (NYSE: FDX - News): 'I've been let down by FedEx. ... I thought you were having an Internet Christmas. ... even stuck my neck out ... We are done recommending FedEx on this show.'Scottish Power (SPI): 'Ring the register. ... Declare victory, nice investing, well done.'Smithfield Foods (NYSE: SFD - News): 'I want you to sell Smithfield Foods.'American Oriental Bioengineering (NYSE: AOB - News): 'Do not buy ... 'Yum! Brands (NYSE: YUM - News): 'Tough situation, obviously, they had that Taco Bell problem ... For pecking order, I like Denny's, Brinker, Darden ... and then, only then, do I like Yum.'Winn-Dixie (NASDAQ: WINN - News): 'Just came out of bankruptcy ... I can't get behind a supermarket other than Safeway.'Skyworks Solutions (SKWS): 'Ixnay on the Skyworksnay.'Harrah's (NYSE: HET - News): 'You just struck it rich! You go out and you ring the register!'

Labels: AOB, BAC, BOT, BWNG, CAG, COP, DENN, FDX, HET, Jim Cramer, Lightning Round, LVLT, Mad Money, QSFT, SFD, SWY, WINN, YUM