Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday, November 10.
Cramer believes a GM bailout should be priority number one right now, because the 3 million jobs lost if GM folds will have implications for the entire economy, even affecting 401(k)s of those who have nothing to do with the auto industry. Such a huge loss will cause thousands to default on their mortgages and will further curtail consumer spending to the point where Wal-Mart and Family Dollar will be the only strong retail names. If Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson can prop up the banks, they should also keep GM afloat, said Cramer.
Cramer added PPG to his list of stocks worth buying because its dividend has risen as its price has dropped. Cramer feels PPG’s 4.6% dividend is safe because the company has consistently raised its yield since 1972, and he suggested reinvesting the dividend so the money will be doubled in 16 years. Cramer notes PPG’s business is expanding, particularly in Asia, and the company has $600 in cash. In addition, China’s stimulus plan could create an upside, as well as its exposure to Wal-Mart which sells PPG’s prescription eyeglasses. In the unlikely event the company will only achieve half of its expected growth, Cramer still thinks the dividend is safe.
One viewer observed gun sales are up and wondered if fear over tighter restrictions under an Obama administration and fear of crime as the economy worsens might indicate a trade in gun stocks. Cramer said neither Smith and Wesson nor Olin is working right now; “There are things that happen that are not investible, and that trend is one of them.” Cramer said. When another viewer asked Cramer why not just choose high-yielding ETFs rather than individual stocks, he replied, “I (perhaps it’s hubris) believe that I can pick the best dividend-yielding stocks, and don’t want the ones I don’t like in the basket, which is why I am against that ETF strategy.” When asked how Cramer would play the Obama Presidency, he said a good speculative play is Tenet Healthcare, but added that since there are three months of pain until Obama is sworn in, why not wait until January?
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