Cramer's Mad Money - Madoff Is a Serial Killer (1/8/09)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday January 8.

Donny Deutsch: “Madoff is a Serial Killer”

Donny Deutsch, host of CNBC’s The Big Idea called Bernie Madoff a “serial killer” who “belongs in a cage tomorrow.” He added; “He didn’t do it with homicide. But do we let serial killers out on bail?” The guy who made off with $4 million of the Deutsche’s family friends is now going to sit in his house and “watch the BCS game tonight…it is a travesty” and an “abomination.”

The CAT Will Pounce: Caterpillar (CAT)

Yesterday, Cramer featured Johnson & Johnson as the stock to buy in case Obama’s stimulus plan misfires. Caterpillar is the name to buy if Obama gets it right, but he would wait until the stock price hits $40 before buying. Caterpillar might take a hit in the near term because of lower global demand for equipment, but should start to rise again after housing bottoms in the summer. For those how really want to own CAT now, the 4.1% dividend will pay investors for waiting and with a strong cash flow, the dividend is safe. Cramer expects Caterpillar to decline on Friday’s unemployment number, but thinks CAT is a long-term buy.

Illinois Tool Works (ITW) CEO David Speer

David Speer told viewers that, given a 30 year low in industrials. not to expect a recovery for manufacturing until 2010, but when things start to look better for the sector, Illinois Tool Works will lead the way. Illinois Tool Works has a history of thriving during bear markets and emerging stronger, and will continue its tradition of introducing new products and making acquisitions. As long as Obama’s stimulus package contains a strong infrastructure component, Illinois Tool Works can expect to benefit substantially, but the initial effects may not be seen until the early part of next year. Cramer thinks Illinois Tool Works can be bought now.

Sell Block: Ciena (CIEN), Skyworks Solutions (SWKS), Tellabs (TLAB), AMD (AMD), Intel (INTC)

Cramer would take profits in four speculative tech names that have made a nice 22% profit collectively. While tech had a nice rally, it is going down again, and investors should feel happy that they caught the speculative four very cheap and can take substantial profits. Cramer recommended these stocks late November 2008 to mid-December, and Ciena is up 42.7%, Skyworks 20.4%, Tellabs 14.2% and AMD 12.8%. Cramer doesn’t think any of these will go much higher, if at all, given Intel’s profit warning that could affect competitor AMD and Skywork’s upcoming earnings report.

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Comments

[lovethelang...:]

I second that, Ed. Even that's too good for him and somebody needs to be made an example of. You can bet there are plenty more out there waiting to pull the same scam (if they haven't already). Throw them in the cage with the Enron execs and let 'em all rot together.

Jan 09 10:14 AM

[Ricard:]

I am not a day trader - this article appeared on my watch-list due to CIEN. From a long standpoint, CIEN is a great stock to dollar-cost-average down. If it reaches 5 again, I will sell puts to go double long.

Jan 09 10:16 AM

[prairiedog555:]

I liken Madoff more to a child molester, in that he victimized people who put their trust in him. And I guess that same analogy could be used in regard to Wall Street.
Are there no honest men left in America? Is honesty an outmoded ideal? What do our children learn from Wall Street and Congress.

Jan 09 10:47 AM

[marts1:]

Bernie, my HERO. What a guy too live so well over so many years. More power to him. Wish I could have done it. Tough sh-t on the losers. They should have been less trusting . No sympathy for those that lost billion & millions, they still have plenty left. So give up your third & fourth homes, yachts, fancy cars and take fewer vacations. See how the common folk live.
On Jan 09 10:47 AM prairiedog555 wrote:

> I liken Madoff more to a child molester, in that he victimized people
> who put their trust in him. And I guess that same analogy could be
> used in regard to Wall Street.
> Are there no honest men left in America? Is honesty an outmoded ideal?
> What do our children learn from Wall Street and Congress.

Jan 09 01:39 PM

[breckandy:]

Look at the boys. His boys had no money invested in Dad's firm but had it elswhere. Did they know something everybody else didn't?

Jan 09 02:16 PM

[Tricky:]

One thing I've been wondering about for a long time -- why is it that huge scale "white collar crime" is often punished less harshly (in terms of # years in prison and the type of prison) than small scale violent crime? Who has done more harm to society -- a person who has committed one murder or the likes of Lay & Skilling / Madoff / Ebbers?

Jan 09 09:59 PM

[mangiamillie:]

CAT has been used as a weapon of Palestinian destruction. CAT has been used to kill a Brit and an American who tried to defend the Palestinians.

Jan 10 06:48 PM

[aristid:]

maybee they are waiting for a Ruby to get rid of Oswald? Madoff may have more to say than it seems from a good ol Daddy.

Jan 11 04:32 AM