Cramer's Stop Trading - Peabody Is in Freefall (3/2/09)

Stocks discussed on Jim Cramer's Stop Trading! TV Program, Monday March 2.

Anadarko Petroleum (APC), AeroVironment (AVAV), Arch Coal (ACI), Peabody Energy (BTU), Duke Energy (DUK)

Cramer said he is no longer bullish on AeroVironment, a stock he liked as an Obama play, because he fears Obama might do the same thing to defense that he did to healthcare. He commented there are no Obama stocks, because the President's reforms are hurting the market. Natural gas is "in distress" because Obama doesn't favor the fuel and drilling is being reduced. Even though Anadarko Petroleum is the best-hedged and the best-managed natural gas company, it has to resort to raising capital, a move that is not a good sign for the industry. Coal is also suffering and Peabody and Duke are in "freefall."

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Comments

[Alex Bernstein:]

Some times I invest my money taking advice from Cramer. However, I notice that he changing his mind from buy to sell and back to sell so often without regard to fundamentals, as in case on AeroVironment. The company continues to increase their earning, bringing new products and services almost every week to the degree that they had to hire many new employees. Therefore, Mr. Cramer your advice to sell good quality company stock would only hurt AeroVironment stock short term, but inevitably fundamentals of the company will speak louder than your advice. Mr. Cramer your actions are irresponsible!

Mar 03 09:00 AM

[epeon:]

I don't really want to defend Cramer, but the truth is that at this point in time he is a bit clueless. However, aren't we all? The market right now is so erratic that no one has a clue what is going on.

Mar 03 09:05 AM

[Gravity404:]

Welcome to the boards, Alex, with a poignant observation of Mr Cramer's myopic focus on rating, but he does have a good point about your president (or I like to call him Carter Redux.)

Mar 03 09:06 AM

[nutty buddy:]

Cramer might be on to something. Goodbye to Bush's War on Terror. Hello to Obama's War on Investments.

Mar 03 10:34 AM

[dsrtwriter:]

One of the first things Marxists do is to destroy the capital of the middle class and promote envy.

I would like to think that Obama and company are incompetent, but I fear that they are idealogues who want to wipe out wealth so we will look to government.

What will be next? No term limits as in Venezuela?

Mar 03 12:17 PM

[fran:]

cramer must come up with a script every day for entertainment with a bit of psuedo-analysis thrown in. there is no consistent theme for him to sell, except neuroses. that's what you see. he made his fame on tv as showman during a powerful up market, which contained many themes from which to select. on the up side his schtick was easy. it is no longer so.
if you wish his type entertainment, watch but don't listen with an ear toward investment advice.

On Mar 03 09:00 AM Alex Bernstein wrote:

> Some times I invest my money taking advice from Cramer. However,
> I notice that he changing his mind from buy to sell and back to sell
> so often without regard to fundamentals, as in case on AeroVironment.
> The company continues to increase their earning, bringing new products
> and services almost every week to the degree that they had to hire
> many new employees. Therefore, Mr. Cramer your advice to sell good
> quality company stock would only hurt AeroVironment stock short term,
> but inevitably fundamentals of the company will speak louder than
> your advice. Mr. Cramer your actions are irresponsible!

Mar 03 01:07 PM

[fran:]

remember, cramer is a person who has been hot and cold on geithner and bernanke several times over the past months. consistent focus and rationale have not been his most significant attributes. he is an entertainment after all, keeping ratings and sponsors $$$$$ is his objective for CNBC.


On Mar 03 09:06 AM Gravity404 wrote:

> Welcome to the boards, Alex, with a poignant observation of Mr Cramer's
> myopic focus on rating, but he does have a good point about your
> president (or I like to call him Carter Redux.)

Mar 03 01:21 PM

[Steve Ward:]

One thing that Cramer says is that " there are no Obama stocks". this is true. Obama, after only 6 weeks in office has a schitzo approach to everything.
I'm for clean coal but let;s do an enforced cap and trade program before the technology is in place. I'm for natural gas because it is a fuel we can be independent with but let's pull the leases the Bush administration passed out.

I'm for energy independence but let's do nothing on oil drilling and advanced oil shale programs and again let's pull the leases.

Mr. Obama is indeed exuding genuine confidence but it strikes me as the confidence of a man who does not truly know that he is up to his waist in the swamp and the swamp is filled with alligators.
Unbder this scenario I do not know why anyone, including Buffet wants to invest in anything, unless you have to have a daily TV program to do, like Cramer.
then you have to come up with something even if it goes against what you said the day before, such as "there are no Obama stocks".

Mar 03 02:47 PM

[rogerlig:]

Cramer has to come up with SOMETHING every day, so he generally goes with the flow and makes up rationales (often with some good justification) as he goes along. Yes, he changes his mind frequently (he wanted to buy GM at 25, as it was going to 50, as I recall, HOG at 60, WB at 40, all in the last year or two).

The truth is that we're kind of in uncharted territory here. In forty years, neither I nor Cramer has experienced the kind of free fall that we've seen in the past six months, so we're all kind of playing it by ear at the moment.

Mar 03 04:54 PM

[MauDib:]

What has to happen is that businesses increase dividends, not cut them, to encourage investment. Like buying a CD, that encourages families to save now because of increased consumption in the future, not just a hoped for promise of capital gains - that evaporate quickly.

Of all the stakeholders in a business, e.g. govt taxes, employees, etc., the distant owners get the least after everyone else gets their cut - the poster child is GM.

During this decade, I read financial commentators talking about a "mouth-watering" 3 % dividend - you have got to be kidding! Give the shareholders a real return on their investment since mgt does not need the cash for growth (and growth for its own sake - questionable benefit) - at least 7% OR 50% of net income, whichever is lower.

Example, Conoco has 6 bbls of oil for every share of stock, yet the share is priced below 1 bbl - why? The reason is that history has shown that the govt is the #1 recipient of the cash - 35% to 50% - then the employees then mgt -- with stock options, mgt has a disincentive to distribute dividends, rather try to grow the business. This is the opportunity to change this thinking. Investors would have a real incentive to invest.

Since this is not likely to happen, I will go back to individual rental properties which give me control and, thus, real ROI - spendable cash!

Mar 03 08:32 PM

[Amitabha Mu...:]

Since right now the present government has increased its stake to the Citi bank it will do everything to keep the bank healthy. So in my opinion if somebody is going to invest a huge amount then break it into twelve smaller amount of equal magnitude. The stock price is going very cheap. So buy it every month. If it goes down further then subsequent investments will help you recover the loss and ultimately when Dow goes up you will make tons of money.

Mar 03 11:30 PM

[Amitabha Mu...:]

As I had written earlier that the American government may give more efforts to upgrade its technology for making 2000 MW nuclear power plant so that it goes at a higher level compared to those manufactured in Russia or France. Also it may develop the technology of building superior breeder reactors that will produce so much fuel that America will not have to worry for producing ecofriendly power for many centuries to come. Meanwhile efforts to be given to building much bigger size space shuttles which in its turn will make space based power plants a reality. Meanwhile fusion reactors will be technologywise available. Its immense engineering problems will be solved. These are the things which will keep the American leadership position intact.
But unfortunately in the area of technology America is going backwards. There is nothing in the primitive technology area of wind turbines as the energy density is low. The next step might be an attempt to drive the big ships using sails.

Mar 03 11:53 PM

[Alex Bernstein:]

AVAV is up 10% today. Mr. Cramer your actions was irresponsible!

Mar 04 02:43 PM