Segment 1: Time for a Break
Cramer said that today was a sell the news day because the media’s opinion on corporate earnings seems to have changed from last week. Companies like Caterpillar (X), Eaton (X), and Ford (X) reported mediocre results last week and the market was very pleased by the news, but Corning (GLW), Honeywell (HON), and Verizon (VZ) reported good results today and the stock sold off. Cramer thinks that this is a sign that the market is too overbought, and said that it is time for a pullback. He said that the market is due for a 3% - 5% decline, but it will be a mild one because money managers are still looking to put more money into the market. He doesn’t think that the banks or healthcare, will be hit by the pullback, and recommended Wells Fargo (WFC), Bank of America (BAC), Abbott Labs (ABT), and Bristol-Myers Squibb (BMY). He then said that the rails, industrials, and retailers are the most vulnerable right now, and warned that Eaton (ETN), Union Pacific (UNP), Freeport McMoran (FCX), Target (TGT), Kohl’s (KSS), Costco (COST), and Wal-Mart (WMT). He also said that there should be a small pullback in tech, but it is still in a bullish trend.
Cramer took phone calls on the following stocks:
Broadwind Energy (BWEN): Cramer said that this is a very speculative stock, and said that he likes Quanta Services (PWR) better as an energy play, and said that he would buy Chevron (CVX) and ConocoPhillips (COP) on a pullback.
GrafTech International (GTI): Cramer is bearish on this Chinese stock because oil is not high enough.
Segment 2: Cramer’s Capitalist Manifesto
Cramer said that we need a plan to ensure that the U.S. economy recovers and begins to create jobs again. He recommended the following:
1. Create a natural gas network and subsidizing natural gas cars because it is clean, cheap, and abundant in the U.S.
2. Replace the aging infrastructure across the country.
3. Create 3 private healthcare providers and then give them subsidies to encourage businesses to hire new employees.
4. Bring back troops from places where they are no longer needed, like Germany and Japan.
5. Give a bonus for hiring a new employee.
6. Put a solar array on every home.
7. Build a national network of high speed trains.
8. Put an end to talk about card check unionization and forced arbitration.
Segment 3: The Nasdaq’s Streak
Cramer said that the 12 day winning streak that the Nasdaq had until it came to an end late last week was the longest since 1993, and that it is a very bullish sign for tech stocks. The last times that the Nasdaq had a similar run were in 1992 and 1996, and they were led by new product cycles, just like this move. Those moves were caused by the PC and Internet, and this move is caused by the mobile Internet. He recommended buying Apple (AAPL), Qualcomm (QCOM), Research in Motion (RIMM) (even though he doesn’t like it as much as AAPL), and all the mobile phone component makers and semiconductor stocks.
Cramer took phone calls on the following stocks:
Google (GOOG): Cramer said that Microsoft (MSFT) and Yahoo! (YHOO) are quality competitors, so he would rather invest in a company with less competition like Apple (AAPL).
Riverbed Technologies (RVBD): Cramer is bullish because he thinks people overreacted to their quarterly earnings report.
Netflix (NFLX): Cramer
Segment 4: Lightning Round!
Geron (GERN): Cramer is bearish on this stock because it is too speculative, and recommended Gilead Sciences (GILD) instead.
Research in Motion (RIMM): Cramer is bearish because they only had an OK quarter, and recommended that you buy ARM Holdings (ARMH) as a peripherial play or Apple (AAPL) because of the iPhone, and stay away from Palm (PALM).
Bank of America (BAC): Cramer is bullish because he thinks the stock could go to $18, and said he likes JP Morgan Chase (JPM) and Wells Fargo (WFC) as well.
Starent Networks (STAR): Cramer is bullish on this stock as a mobile internet play, and said now is a good time to get in because it pulled back.
CKX Entertainement (CKXE): Cramer is bearish on this stock because he doesn’t like the entertainment industry.
Thompson Creek Metals (TC): Cramer said to take profits because it is up so much from its lows, and because Freeport McMoran (FCX) reported that the lithium market is still weak.
Segment 5: Eureka Moment
Cramer pointed out an example of a trading opportunity that he found by listening to a company’s conference call. He said that all the oil service companies headed lower after Schlumberger’s (SLB) CEO reported that he thinks that oil has to go over $70 for the drilling companies to make money. He then said that the offshore drillers still seem to be doing well, and Transocean (RIG) is the top offshore driller. RIG stock went up that afternoon, and you could have made money on the trade if you had been listening to the SLB conference call.
