Cramer's Lightning Round - The Most Dangerous Stock for 2009 (12/23/08)

Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program,Tuesday December 23.

Bullish Calls:

GlaxoSmithKline (GSK): Cramer says GSK is a positive company; “It works for me.”
Pepsico (PEP): Pepsi is down a bit, but Cramer still stands behind it. “Pull the trigger.”
Pfizer (PFE): After being down on Pfizer for so long, Cramer now says it is a buy. “I like the yield.”
Verizon (VZ): “A buy.”
Philip Morris International (PM): “Buy…PM is for me.”
Flowers Foods (FLO): The management is solid. Cramer would buy but “one and a half thumbs up.”
Caterpillar (CAT): “Pull the trigger.” Cramer says this stock, and not Terex, is best of breed.

Bearish Calls:

Vodafone Group (VOD): “Too complicated.”
Baidu.com (BIDU): While Cramer is liking other Chinese stocks now, he can’t go for Chinese internet, given the Chinese government’s strict regulations on privacy and use of the net.
Boeing (BA): “The most dangerous stock for 2009…the worst to own.” Cramer cites order cancellations as one of the big worries about Boeing.
National Oilwell Varco (NOV): While Cramer once liked this stock, you “can’t own it…Oil is going too low.”
Terex (TEX)

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Comments

[pondee:]

Unlike Cramer to have two sets of Bearish calls

2008 Dec 24 10:08 AM

[MrsLinarcos:]

Too bad Cramer can't see the SHLD is in deep trouble, Eddie has bled this company dry. Look for this company to go belly up in '09.

2008 Dec 25 08:17 AM

[long_on_oil:]

I record and watch Mad Money daily and Cramer has recommended several stocks that have done well, but in an up market that is easy for anyone to do. I bought NOV, COP and RIG all on his recommendations. As a viewer you have to remember one thing, it is your responsibility to sell at the right time too. You never make money by buying, you make your money selling. That is where Cramer is lacking. He is quick to recommend buying but to slow on the sell side.
NOV and RIG both pulled back 25% before he finally said to sell or take some off the table. Then again, to his credit, oil fell so fast it caught everyone by surprise. I wish I knew the stats but I bet more people have lost money taking his advise than have made money.
Cramer is probably right on NOV but as an investor, not a trader, your mission is to buy low and sell high. NOV has an upside down ratio of about 9:1 right now and they are a great company making a product that has a fantastic future. My prediction is if you buy NOV at $22 you will make more money within 5 years than any other stock Cramer recommends next week.
If you do buy NOV at $22 you have to sell half when it hits $60 and the other half when it hits $85. Never forget, it is the sell that makes you money, not the buy.

2008 Dec 25 08:37 AM

[Ricard:]

Cramer is for

1) the day trading crowd

2) those with ADD, massive ADD

I simply can't take advice from someone giving out five second answers using buzzers, sirens, and puppets as props. No offense, I know he's responsible for this site. I'm sure he's a very intelligent person.

2008 Dec 25 10:38 AM

[tipalia:]

agree with RICARD ( love that liquor also) Cramer s recos are very dangerous for the uneducated ,emotional small investors. And when you bought something he recommended be ready to get out as soosn as the next morning since he changes his mind not in a matter of days but often in a matter of hours. Yes like any of us he will get lucky but luck is only good for gamblers . It s strange how,very often, people spend more time to save nickels and dimes on a loaf of bread and spend no time at all to buy stocks .
Hard to understand the human behaviour sometimes.

2008 Dec 25 11:07 AM

[patp1008:]

Read this about Cramer's stock picks
consumerist.com/511667...

2008 Dec 25 11:15 AM

[relmor:]

Cramer screwed XM stockholders....bad...... bad....He suckered them into holding their shares through the entire merger process....Sirius shares could have been sold for a gain even after the merger was apparently going through....
THeres a reason that Cramer stopped talking about Sirius for two months prior to the merger, he was distancing himself from any lawsuit possibilities(he claimed the environment changed...FCC took too long...etc...What a joke....He should be in jail..

2008 Dec 25 12:22 PM

[relmor:]

His oil calls too, when oil was at 140 he loved oil, oil stocks, and anything associated with oil...I remember the Fast Money show when they dressed up as the blues brothers to bring the good news to the people about how guaranteed 200 dollar oil was, and to buy all these oil stocks, etc....Next week oil began its downtrend, and still hasnt stopped 7 months later...Fast Money people should all be arrested too....Such a scam...Feel sorry for people who listen to the pundints on TV....Sell when they say buy, buy when they say sell....But be careful, sometimes they slip in experts we agree with at bad timing....To throw off your timing...Such as when the market was going on a huge dollar surge up they had on Peter Schift on constanly...He is a permabear on the dollar....Which is the correct trade, just not at that time...See my point....

2008 Dec 25 12:26 PM

[So?:]

I guess it's time to buy Boeing now. You're best doing the opposite of what this guy tells you to

2008 Dec 25 01:02 PM

[Aryamehr:]

"even the dull and ignorant they too have their story," however it does not mean that you should follow everything they say but rather mull over all the logical facts using your education and experience in your ruminations. Cramer is no different than most analyst that make coments on TV, and the internet, they are all sources of information that can useful to those of us who understand this, however they are not prophets.

I listen to Cramer and most other pundits and people but I only listen for kernels that could lead me to compelling investments. They name a stock, I research the stock using fundamental analysis, I look at all the metrics understanding most are trailing twelve months, then I look into the short, intermediate and long term horizon with macroeconomic parameters and pick my stocks.

One of my major picks is Citi. Reasons - their metrics are compelling and their fundamentals based on the gov'ts decision to rescue the major banks and the Federal Reserves policy of essentially promising to keep short term rates at 0-0.25% for a long period (up to 2 years). Under these circumstances all the big banks are going to make a killing. Think about it the banks can now borrow money for a relatively long period of time at almost zero percent and lend it to there customers and pocket all the profits without paying the Federal Reserve. Ex. Citi borrows $10 Billion and lends it to its customers, ex. businesses, credit card holder, mortgage applicants etc. without having to pay any interest to the Federal Reserve for a long time, or until the economy starts manifesting an expansion.

Anyone that expected the economy to make an about face in the span of a week or a quarter is probably a moron. Macroeconomic events take time. The latency period between cause and effect is usually 18 months, so for TARP to manifest its positive effects it will mean that we will probably not see its full effects until the early part of 2010. What one needs to understand is the effects of TARP and its future progeny. The results will unequivocally be an expansion in economic activity however they will have inflationary side effects. This is usually the policy applied in most developing nations around the world, however the monetary policy of these nations is contained within their own borders. Our monetary actions effect the entire globe since our currency is the preferred currency used for international trade and hoarding national reserves.

The bubble in real estate was evident in 2004 and I liquidated everything then, however I was always fearful of one word that would knaw away at my reserves; Inflation. My fears are coming to their fruition and the only place left to park your money appears to be the securities market. Mark my words, inflation is a latent tax that in the modern era compels one to be vigilant or else you will have little savings for your retirement. Mr. Buffet spoke my thoughts recently by stating, "Cash is Trash," it truly is Trash. If you take into consideration the Real Inflation rate, that is eliminating Hedonics from the gov'ts formula, it is more than obvious that inflation has averaged at least 7% annually for the latter decade. Just use the rule of 72 and you will agree. If you agree with this then after paying taxes on the interest in your CDs or Money Market accounts you will probably net 2%. With inflation at 7% this would mean you are losing 5% on your money every year that you have it sitting in the bank. This would mean, using the rule of 72, that within 15 years your money would be worthless. So can you tell me if there is a better investment other the stocks? I don't think so. If you don't like Citi, how about Bank of America or JP Morgan Chase, or Wells Fargo. Believe me the economy won't turn around until the banks turn around. Real Estate is secondary to the banking sector and that is why TARP essentially addressed the financial sector.

Last but not least we need to understand that we are the only nation in the world that has the priviledge of being able to print a currency accepted anywhere in the world. I will leave you to ponder the consequences of abusing this power and the global ramifications if this is not done prudently.

2008 Dec 25 05:28 PM

[Aryamehr:]

that you should follow everything they say but rather mull over all the logical facts using your education and experience in your ruminations. Cramer is no different than most analysts that make comments on TV, and the internet, they are all nothing other than sources of information that can be useful to those of us who understand this, however they are not prophets.

I listen to Cramer and most other pundits and people but I only listen for kernels that could lead me to compelling investments. They name a stock, I research the stock using fundamental analysis, I look at all the metrics understanding most are trailing twelve months, then I look into the short, intermediate and long term horizon with macroeconomic parameters and pick my stocks. I also consider Black Swan events that could happen.

One of my major picks is Citigroup. Reasons - their metrics are compelling and their fundamentals based on the Treasury’s coordinated decision with the Federal Reserve to essentially back all their debt and keep short term rates at 0-0.25% for a long period (up to 3 years). Under these circumstances all the big banks are going to make a killing. Just ponder this, the banks can now borrow money for a relatively long period of time at almost zero percent interest and lend it to their customers and pocket all the profits without paying the Federal Reserve. Ex. Citi borrows $10 Billion and lends it to its customers, ex. businesses, credit card holders, mortgage applicants etc. without having to pay any interest to the Federal Reserve for a long time, or until the economy starts manifesting an expansion. By this time the housing market will have bottomed.

Anyone that expected the economy to make an about face in the span of a week or a quarter is probably a moron. Macroeconomic events take time. The latency period between cause and effect is usually 18 months, so for TARP to manifest its positive effects it will mean that we will probably not see its full effects until the early part of 2010. What one needs to understand is the effects of TARP and its future progeny. The results will unequivocally be an expansion in economic activity however they will have inflationary side effects. This is usually the policy applied in most developing nations however the monetary policy of these nations is contained within their own borders. Our monetary actions affect the entire globe since our currency is the preferred currency used for international trade and hoarding national reserves.

The bubble in real estate was evident in 2004 and I liquidated everything then, however I was always fearful of one word that would gnaw away at my reserves; Inflation. My fears are coming to their fruition and the only place left to park your money appears to be the securities market. Mark my words, inflation is a latent tax that in the modern era compels one to be vigilant or else you will have little savings for your retirement. Mr. Buffet spoke my thoughts recently by stating, "Cash is Trash," it truly is Trash. If you take into consideration the Real Inflation rate, that is eliminating Hedonics from the governments formula, it is more than obvious that inflation has averaged at least 7% annually for the latter decade. Just use the rule of 72 and you will agree. If you agree with this then after paying taxes on the interest in your CDs or Money Market accounts you will probably net 2%. With inflation at 7% this would mean you are losing 5% on your money every year that you have it sitting in the bank. Owing to this using the rule of 72 that would mean within 15 years your money would be worthless. So can you tell me if there is a better investment other the stocks? I don't think so. If you don't like Citi then consider any of the remaining majors, such as, Bank of America? JP Morgan Chase? or Wells Fargo? Believe me the economy won't turn around until the banks turn around. Real Estate is secondary to the banking sector and that is why TARP essentially addressed the financial sector. I chose Citigroup because of its international exposure. Remember most of the future growth is going to be in the developing nations not in the West and this is where Citigroup’s strengths are apparent.

Last but not least we need to understand that we are the only nation in the world that has the privilege of being able to print a currency accepted anywhere in the world. I will leave you to ponder the consequences of abusing this power and the global ramifications if this is not done prudently.

2008 Dec 25 05:57 PM

[oldman:]

Cramer is dangerous to your health and your investments.

2008 Dec 25 06:07 PM

[EzF-T:]

Still use best strategy on it, good analyze, will earn you more equity..

EzForex-Trading.com

2008 Dec 26 02:10 AM

[robinjoe:]

His show is entertainment. Why do people take his recommendations so seriously? If you want a financial adviser, pay for one.

2008 Dec 26 09:08 AM

[TAMR666:]

YOU HAVE A BETTER PROSPECTIVE ON THESE STOCKS THAN CRAMER. I"


On Dec 25 08:37 AM long_on_oil wrote:

> I record and watch Mad Money daily and Cramer has recommended several
> stocks that have done well, but in an up market that is easy for
> anyone to do. I bought NOV, COP and RIG all on his recommendations.
> As a viewer you have to remember one thing, it is your responsibility
> to sell at the right time too. You never make money by buying, you
> make your money selling. That is where Cramer is lacking. He is quick
> to recommend buying but to slow on the sell side.
> NOV and RIG both pulled back 25% before he finally said to sell or
> take some off the table. Then again, to his credit, oil fell so fast
> it caught everyone by surprise. I wish I knew the stats but I bet
> more people have lost money taking his advise than have made money.
>
> Cramer is probably right on NOV but as an investor, not a trader,
> your mission is to buy low and sell high. NOV has an upside down
> ratio of about 9:1 right now and they are a great company making
> a product that has a fantastic future. My prediction is if you buy
> NOV at $22 you will make more money within 5 years than any other
> stock Cramer recommends next week.
> If you do buy NOV at $22 you have to sell half when it hits $60 and
> the other half when it hits $85. Never forget, it is the sell that
> makes you money, not the buy.M LOADING UP ON NOV @22,SLB BELOW 40 AND NE IN THE TWENTIES.


On Dec 25 08:37 AM long_on_oil wrote:

> I record and watch Mad Money daily and Cramer has recommended several
> stocks that have done well, but in an up market that is easy for
> anyone to do. I bought NOV, COP and RIG all on his recommendations.
> As a viewer you have to remember one thing, it is your responsibility
> to sell at the right time too. You never make money by buying, you
> make your money selling. That is where Cramer is lacking. He is quick
> to recommend buying but to slow on the sell side.
> NOV and RIG both pulled back 25% before he finally said to sell or
> take some off the table. Then again, to his credit, oil fell so fast
> it caught everyone by surprise. I wish I knew the stats but I bet
> more people have lost money taking his advise than have made money.
>
> Cramer is probably right on NOV but as an investor, not a trader,
> your mission is to buy low and sell high. NOV has an upside down
> ratio of about 9:1 right now and they are a great company making
> a product that has a fantastic future. My prediction is if you buy
> NOV at $22 you will make more money within 5 years than any other
> stock Cramer recommends next week.
> If you do buy NOV at $22 you have to sell half when it hits $60 and
> the other half when it hits $85. Never forget, it is the sell that
> makes you money, not the buy.

2008 Dec 26 09:18 AM

[Emerald:]

The consumer is 70% of the economy and is currently overleveraged and scared. Banking is an essential eleement to economic activity but housing is the foundation of the consumer. Banks won't lend to consumers who now have lower credit ratings and can't afford a new house. Existing home owners are upsaide down on their mortgages in many cases. The banks are also hording capital because of the next level of impendng write-offs from credit cards, highly leveraged corporate loans and commercial real estate. Banks are not fully reserved and will be back to the Fed in a few months. Yes, borrowing money from the Fed is very cheap, but that's to keep the banks solvent, not to make them a lot of money. I agree a bank stock may be a good investment if you are ok with the risk and have at least a five year time horizon. 2009 is stiill a year of deleveraging and will be a poor one for most banks. Citi also has a huge, non transparent off balance sheet pool of loans.


On Dec 25 05:57 PM Aryamehr wrote:

> that you should follow everything they say but rather mull over all
> the logical facts using your education and experience in your ruminations.
> Cramer is no different than most analysts that make comments on TV,
> and the internet, they are all nothing other than sources of information
> that can be useful to those of us who understand this, however they
> are not prophets.
>
> I listen to Cramer and most other pundits and people but I only listen
> for kernels that could lead me to compelling investments. They name
> a stock, I research the stock using fundamental analysis, I look
> at all the metrics understanding most are trailing twelve months,
> then I look into the short, intermediate and long term horizon with
> macroeconomic parameters and pick my stocks. I also consider Black
> Swan events that could happen.
>
> One of my major picks is Citigroup. Reasons - their metrics are compelling
> and their fundamentals based on the Treasury’s coordinated decision
> with the Federal Reserve to essentially back all their debt and keep
> short term rates at 0-0.25% for a long period (up to 3 years). Under
> these circumstances all the big banks are going to make a killing.
> Just ponder this, the banks can now borrow money for a relatively
> long period of time at almost zero percent interest and lend it to
> their customers and pocket all the profits without paying the Federal
> Reserve. Ex. Citi borrows $10 Billion and lends it to its customers,
> ex. businesses, credit card holders, mortgage applicants etc. without
> having to pay any interest to the Federal Reserve for a long time,
> or until the economy starts manifesting an expansion. By this time
> the housing market will have bottomed.
>
> Anyone that expected the economy to make an about face in the span
> of a week or a quarter is probably a moron. Macroeconomic events
> take time. The latency period between cause and effect is usually
> 18 months, so for TARP to manifest its positive effects it will mean
> that we will probably not see its full effects until the early part
> of 2010. What one needs to understand is the effects of TARP and
> its future progeny. The results will unequivocally be an expansion
> in economic activity however they will have inflationary side effects.
> This is usually the policy applied in most developing nations however
> the monetary policy of these nations is contained within their own
> borders. Our monetary actions affect the entire globe since our currency
> is the preferred currency used for international trade and hoarding
> national reserves.
>
> The bubble in real estate was evident in 2004 and I liquidated everything
> then, however I was always fearful of one word that would gnaw away
> at my reserves; Inflation. My fears are coming to their fruition
> and the only place left to park your money appears to be the securities
> market. Mark my words, inflation is a latent tax that in the modern
> era compels one to be vigilant or else you will have little savings
> for your retirement. Mr. Buffet spoke my thoughts recently by stating,
> "Cash is Trash," it truly is Trash. If you take into consideration
> the Real Inflation rate, that is eliminating Hedonics from the governments
> formula, it is more than obvious that inflation has averaged at least
> 7% annually for the latter decade. Just use the rule of 72 and you
> will agree. If you agree with this then after paying taxes on the
> interest in your CDs or Money Market accounts you will probably net
> 2%. With inflation at 7% this would mean you are losing 5% on your
> money every year that you have it sitting in the bank. Owing to this
> using the rule of 72 that would mean within 15 years your money would
> be worthless. So can you tell me if there is a better investment
> other the stocks? I don't think so. If you don't like Citi then consider
> any of the remaining majors, such as, Bank of America? JP Morgan
> Chase? or Wells Fargo? Believe me the economy won't turn around until
> the banks turn around. Real Estate is secondary to the banking sector
> and that is why TARP essentially addressed the financial sector.
> I chose Citigroup because of its international exposure. Remember
> most of the future growth is going to be in the developing nations
> not in the West and this is where Citigroup’s strengths are apparent.
>
>
> Last but not least we need to understand that we are the only nation
> in the world that has the privilege of being able to print a currency
> accepted anywhere in the world. I will leave you to ponder the consequences
> of abusing this power and the global ramifications if this is not
> done prudently.

2008 Dec 26 11:00 AM

[MiddleOfRoader:]

IMO Cramer is no worse than other low-cost investment advice sources.

I subscribed to two monthly investment newsletters, and the advice coupled with the timing of that advice was so bad I had to subscribe to Morningstar as a check on those letters. The Morningstar ratings provided a false sense of security. As the year wore on and time after time either earnings or future forecasts came in below previous guidance, Morningstar would suspend the cratered stock's ratings as "Under Review". A couple week's later the "fair value" would be slashed 20% - 50%.

Last year, almost no energy stocks were rated highly by Morningstar, as Morningstar said they do not earn the cost of capital over a full cycle. In the midst of the big run-up in oil prices, Morningstar changed their model, with the new model basically assuming something close to the current oil price would continue indefinitely. All of a sudden, most energy stocks seemed to be highly rated, a couple of months before they all fell off a cliff.

At least Cramer went bearish on almost everything around the end of September, and viewers who followed that call probably saved themselves 20% - 30% if they were still invested at that point. Most other sources of advice kept preaching the benefits of sticking to a long-term allocation.

2008 Dec 27 01:26 AM

[Fish Gone Bad:]

I find Cramer very entertaining, just like tele-evangelists.

The next 6-8 weeks should be very bad for the stock market. The Santa Claus rally did not happen, banks are just as bankrupt as they were in September, and more and more people are losing their jobs (and homes).

The stock market is a blood sport. There are winners and losers. The best way to be a winner is to do your homework, watch the market, and learn from your mistakes.

Clark Jenkins
FishGoneBad.com

2008 Dec 27 02:34 AM

[Duude:]

The most dangerous stock for 2009 is an index of Cramer favorites. We need an ultrashort Cramer portfolio.
As for his call on Baidu.com, I think Chinese regulation isn't as much an issue to the Chinese people. It will not slow down the growth of the Internet or curtail Baidu's future profitability. The Chinese people are resilient. They have always introduced work-arounds. They've been dealing with this lot for 60 years and know their way around. To them, these are minor glitches.

2008 Dec 27 08:31 AM

[gooter:]

You should always be considerate of anyone who tells you how to get rich. After all, they are doing it as a charity for you. Certainly, Cramer doesn't need to be on TV, being paid, to get rich. He can stay home, utilize his uncanny daytrading skills, and make a fortune. There cannot, possibly, be any other reason to "share" this advice, other than charity. Now, given the fact it's "charity" and he'll make a killing whether or not he shares his advice with you, millions of viewers must be making a killing, also. Therefore, it should only be a matter of time before the show goes prime time, becoming the ultimate get rich quick scheme of all time. Gosh, making money is easy. Just turn on the TV and this guy tells you how. What a great country!

2008 Dec 27 09:21 AM

[notsosmart:]

7 to all a good night.

2008 Dec 27 04:58 PM

[jrs87sch:]

I agree with all of the bull calls except 2; CAT and PEP. Pepsi has been and will continue to be a laggard unless they acquire or create a completely great and different product. Frito-Lay is the only thing making it work for them.

Caterpillar might enjoy some revenue from the potential infrastructure build-out, but realize that commercial and residential construction has gone to almost nothing. If anything, the company's revenues may get close to leveling out. I don't expect that much of a boost.

2008 Dec 28 12:04 AM

[MrsLinarcos:]

Tele-evangelists lie and anyone who believes all of his shouting and cowering in fear, obviously they love being controlled by someone who makes them feel bad. Don't let someone like this control you when it comes to stocks. Make your own decision.


On Dec 27 02:34 AM Fish Gone Bad wrote:

> I find Cramer very entertaining, just like tele-evangelists.
>
> The next 6-8 weeks should be very bad for the stock market. The Santa
> Claus rally did not happen, banks are just as bankrupt as they were
> in September, and more and more people are losing their jobs (and
> homes).
>
> The stock market is a blood sport. There are winners and losers.
> The best way to be a winner is to do your homework, watch the market,
> and learn from your mistakes.
>
> Clark Jenkins
> FishGoneBad.com

2008 Dec 29 09:06 AM

[MrsLinarcos:]

Didn't want to forget to add, SHLD is one stock he's bullied people into buying, Eddie Lampert keeps Cramer in his pocket to help boost his stocks so higher ups in the company can get more before bailing out. SHLD is on it's way out, only Cramer can't see it.

2008 Dec 29 09:08 AM

[heirdough:]

So, where does a small investor go for advice? My broker pushes the products of the wholesaler who give him the nicest sweatshirt, or sleeves of golfballs. Are all advisors "me first" in their approach?

Jan 01 04:57 PM

[Ricard:]

Yes, they are. By far the worst is your local banker - they are usually the least informed about the actual products, and the most informed about their own incentive programs for pushing them. Fidelity is probably the best firm to go with, because their sales people are not paid by commission. However, they are only allowed to talk Fidelity - if you want a Vanguard fund, you're on your own when it comes to research.

Go to people who aren't selling anything. People you trust. If they can't help you, subscribe to an online paper, like the Wall Street Journal or Businessweek. It takes a while, but the more you read it, the more the financial section will sound like plain English. Find books that can cohesively talk about what you want to know, and read them. It's actually not that difficult - it just takes time.


On Jan 01 04:57 PM heirdough wrote:

> So, where does a small investor go for advice? My broker pushes
> the products of the wholesaler who give him the nicest sweatshirt,
> or sleeves of golfballs. Are all advisors "me first" in their approach?

Jan 09 07:44 PM