MAD MONEY: CRAMER BACK TO BULL MODE

Posted: August 17th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | 1 Comment »

In one single day, Cramer changed his tune because now he’s loving it apparently. How a simple discount rate cute will fuel the economy and credit issues. I thought this problem had to do with bad loans and will throwing more money at it solve it? Cramer did agree that this was more a change in “in psychology, not fundamentals.” But this change Cramer said investors are on the offensive now and they should buy! Ultimately Cramer believes that analysts will be urging investors to “buy, buy, buy” after the weekend.

While there wasn’t a huge rally, Cramer said that this move averted a huge drop in the market possibily over 1000 points from Friday to Monday because overnight, the futures indicated the market to be down almost 150 points easily. But the Fed came in and changed the dynamics of everything. Although the mental attitude changed, Cramer said to “forget that the market was up today,” because hedge funds are still in “sell mode…pay off the investor masses” who were redemming their money from funds. There was a large outflow however statistically, retailer investors are a horrible indicator of the market but if there are enough outflows some funds will fall. But most of the time, you should take a contrarian view.

Yet Cramer warns that the 5.4% plunge for Japan’s Nikkei 225 Friday could happen here as well “most of the bad stuff is behind us.” Cramer sounded quite optimistic though.

Cramer viewed the Fed cut was the equivalent of an injection of nearly $120 billion in liquidity into the banking system as a move that saved Thornburg Mortgage (TMA) and Countrywide Financial (CFC) both were “within days of failing” but now look like takeover targets! What a turn of events! Countrywide even had a run at their banking deposits yesterday after news of them tapping credit which was definitely not a good since. They currently fund 70% of their loans with their funds but hope to go down to 100% by September which means cutting loan production. In addition he recommened Goldman Sachs (GS) and Lehman Brothers Holdings (LEH) – He owns Goldman for his charitable trust, Action Alerts PLUS.

OTHER PICKS:
Sears Holding (SHLD), which he owns for his charitable trust because it has a lot of cash on hand. Other picks were Bear Stearns (BSC), Downey Financial (DSL) and Washington Mutual (WM)

HURRICANE PICKS: Hurricane Dean is predicted to hit the Gult:
He picked Centex (CTX), as it could see a “short squeeze” and added Schlumberger (SLB) and Halliburton (HAL), because oil and gas are “total smoke shows.”

Once again, Cramer was pitching NYSE Euronext (NYX), which he owns for his charitable trust saying that valuation is low and their volume because of volatility is way too high.

Cramer gave all these recommendations saying that the stocks are ones that you can “buy high and sell higher.” but suggested to wait for the stocks to come down a bit from it’s spike from the rate hike.

LIGHTNING ROUND:

Honeywell (HON): CEO Dave Cote “is just the master of Honeywell. He’s buying back stock hand over fist. He’s doing a great job. … Honeywell is absolutely a TripleBuy.”

UBS (UBS): “Has been spindled, mutilated, crushed, whipped, and you know what? It’s a great franchise, and it’s going to come back. … The stock is way, way off its 52-week high. … Let’s pull the trigger if we can around here and buy some UBS. … It’s going to start rallying.”

Cummins (CMI): “I like Cummins. … It has now pulled back. … Caterpillar (CAT) is now down … 16 straight points. I think Caterpillar is a better buy now than Cummins.” Cramer owns Caterpillar for his charitable trust.

US Bancorp (USB): “I think Warren Buffet has just bought a ton of USB. Very little exposure to the mortgage market. … US Bankcorp is fine with me. I would stick with US Bancorp.”

Ingersoll-Rand (IR): “Warren Buffet has been buying this stock almost as aggressively as the company has itself. … The buyback is one of the most aggressive on the New York Stock Exchange. …. I think Ingersoll … is a buy.”

Ametek (AME): “Precision instruments is a good business. … I like Ametek. … Lenny Dykstra … thinks that this stock is the next one to move. … If he likes AME, I’ve gotta be on board, too.”

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