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Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday October 30.

Back to the S&P Futures: U.S. Steel (NYSE:X)

While the Bulls and the Bears are slugging it out, investors are abandoning faith in individual stocks. With rising unemployment and once-solid companies reporting their last good quarter for a long while, the market fundamentals are declining. However, Cramer notes investors have not given up on stocks as an asset class and stocks are still cheaper than gold and real estate. The new trend is S&P futures, a basket that invests in all S&P names. Mutual and retirement funds are pouring money into these futures and individual investors are following suit. Cramer noted U.S. Steel’s upward move, in spite of its having dropped $165 and facing downgrades even prior to its earnings report. The fact that U.S. Steel is in the S&P 500 buoyed the stock.

CEO Interview: Sean Boyd Agnico-Eagle Mines (NYSE:AEM)

Gold is usually considered an ideal port in a financial storm, but it hasn’t worked as a hedge in this dismal market. The reason is that gold usually is a good protection when faced with inflation, but currently the market is in a deflationary cycle, noted Cramer. As a result, he is “eating crow” over his failed Agnico-Eagle Mines call; the stock dropped $22 from $68 reflecting gold’s fall from $897 to $738 an ounce. However, Cramer thinks gold will make a comeback in a few quarters, and a good choice may be Agnico-Eagle Mines. CEO Sean Boyd discussed the company’s projection of a 23% production increase along with the creation of 5 new mines between 2008 and 2010. Boyd says AEM’s dividend is modest because the gold industry is capital-intensive. Cramer says AEM might be a good investment for the patient investor who can wait a few quarters for an upturn in gold.

Sell Block: Wal-Mart (NYSE:WMT) vs. Petsmart (NASDAQ:PETM), Whole Foods (WFMI), Circuit City (CC), Best Buy (NYSE:BBY)

Move over Petsmart, here comes Wal-Mart. The giant retailer announced in a conference call that it is expanding into pet supplies, and Cramer commented, "When Wal-Mart decides to compete in a category, the competitor gets smoked.” He noted Whole Foods reeled when Wal-Mart started stocking organic foods, Circuit City and Best Buy declined when Wal-Mart expanded its electronics offerings and now pharma is suffering as Wal-Mart enters Phase III of its prescription drug plan. Even though Pet Smart has 1,100 stores and 13% market share, Cramer thinks it can’t compete with Wal-Mart and would sell the stock.

 Mad Mail: Johnson & Johnson (NYSE:JNJ)

Cramer suggested young investors have a diverse portfolio with a balance of growth and conservative stocks. In spite of pessimism from analysts, Cramer thinks Johnson & Johnson is still worth buying.

 

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Source: Cramer's Mad Money - Petsmart in the Dog House (10/30/08)