Cramer's Mad Money - 10 Signs of Hope (3/3/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday March 3.

10 Signs of Hope: Altera (ALTR), Xilinx (XLNX), U.S. Steel (X)

While Cramer usually regards hope as merely a crutch in a normal market, it may be useful for look for things to inspire hope, given the climate is so dismal.

1. Timothy Geithner broke his silence and discussed current problems. Even though there is no clear solution, the fact he is talking is a good sign

2. Fed Chairman Ben Bernanke is talking about a new TALP plan that will help asset-backed facilities.

3. The market rallied briefly on Altera and Xilinx's positive guidance.

4. The London copper inventory is dwindling, which may indicate commodities may be on the way back up.

5. China is unstoppable and is up 13.5% for the year.

6. Things just can't get any worse for many stocks; U.S. Steel has fallen farther than it did during The Great Depression.

7. Oil is putting in a bottom.

8. Houses are affordable, and Cramer reiterated his prediction that housing will bottom by summer.

9. Many companies are not only not cutting their dividends, but are raising them. There is a significant number of stocks with 4-5% yields.

10. Once the sellers are finished, the market will bottom.

The Silver Lining: SPDR Gold Shares (GLD), Agnico Eagle Mines (AEM), iShares Silver Trust (SLV)

Cramer has been talking about "Obama-proofing" a portfolio; one way is to make sure that 20% of holdings are in precious metals. He has discussed his favorite gold picks: Agnico Eagle Mines and SPDR Gold Shares. There is also room in a portfolio for silver. An investor can either own the metal itself or buy iShares Silver Trust. Silver is trading at the largest discount to gold in 13 years; one ounce of gold would buy 72 ounces of silver. While Cramer thinks this downward trend in silver will end, it might drop a bit further before bottoming. Therefore, he would buy on scale on the way down; "Never chase, just bid," he said.

Off the Charts: Big Lots (BIG), Family Dollar (FDO)

Cramer compared the charts and fundamentals of Family Dollar and Big Lots to see which one is the best tradedown play. According to the chart, Big Lots seems to be bottoming, and its 50-day moving average is catching up with the share price. Apparently, buying is more aggressive on the dips and selling is tapering off. Family Dollar is caught in a triangle pattern, and every attempt to break out upward is blocked by selling pressure. It appears that Family Dollar's supply is too heavy and the stock will fall back lower. However, Cramer, ever the fundamentalist, says in spite of the superiority of Big Lot's chart of Family Dollar's, he cannot accept the Big Lot's business model, which involves closing out inventory. Every retailer is using this strategy to stay afloat, and Cramer thinks that ultimately this strategy will fail Big Lots.

Cramer's Outrage: Tuition Hikes

Cramer is furious with the University of Pennsylvania, which announced it will raise tuition by 3.8% to compensate for a 19% reduction in its endowment. This is not the time to raise tuition, but to lower rates to make a college education affordable to all. He said the policy of putting endowments before education has to end, and he would not donate to such endowment to protest the way many institutions of higher learning treat their students.

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round and his Stop Trading! Picks.

Get Cramer's Picks by email-- it's free and takes only a few seconds to sign up.

Seeking Alpha is not affiliated with Jim Cramer, CNBC or TheStreet.com

Comments

[Conan the B...:]

Number 10: "Once the sellers are finished, the market will bottom"

Wow, what insight.

Mar 04 08:01 AM

[jimmy Turano:]

Carnac the magnificent has spoken!
He should wear a Black robe, a pointed hat and have a crystal ball, as his T.V. show opens from now on.
That is if he is still on air the rest of this year.
People are fed up, people have lost a lot of money,
people can't trust anyone anymore and are better off staying out of the high seas of financial storms,
until one day a rainbow is across the sky once again.

Mar 04 08:09 AM

[bonz:]

This from the guy who said in 2007 if he had to buy one stock it would be either GS or SHLD and that the Dow was going to 14,500 by Christmas.

Mar 04 08:24 AM

[Cesato:]

"6. Things just can't get any worse for many stocks; U.S. Steel has fallen farther than it did during The Great Depression."

Pretty easy for Cramer this time, there is more room up that down, it's kind of self-fulfilling prediction. Ever a short covering rally will make him look godd a for a little while.

Mar 04 08:38 AM

[odessa88:]

Cramer is just a complete waste of DNA.

if I want to hear the gibberings of an idiot, i will ask my ex-wife something.

Mar 04 08:57 AM

[Gravity404:]

Great a Cramer lovefest...I think we could focus our energy on more productive targets...I watched Geithner speak....oh, man we are in for a tough road ahead. That guy looked like a deer in headlights, repeating the same thing over and over. "Inherited....inherite... increase on top 5%...inherited...will help 95%...inherited...inhe...

How is the top 5% going to make up $1.7 trillion dollars over the next 10 years???

Mar 04 09:50 AM

[Gravity404:]

What does this mean??

9. Many companies are not only not cutting their dividends, but are raising them. There is a significant number of stocks with 4-5% yields.

They're cutting and raising them I guess. C cut to zero then raised back to 1 cent,

Mar 04 09:53 AM

[SJD:]

He's a cartoon character pure and simple.

Mar 04 10:32 AM

[Wrenchmensch:]

I commend 60-something Cramer for the energy he displays in conveying useless information. I am a 60-something trader, and I am having some success trading. One cannot short this market enough. Where is Cramer coming from?

Mar 04 10:35 AM

[ManAboutDallas:]

The biggest "sign of hope" will be when this pixilated leprechaun finally has no more viewers.... or followers.

Mar 04 12:27 PM

[hwood007:]

i think cramer is really 54, if he made less funny side remarks, he may by taken for more than he is .


On Mar 04 10:35 AM DKE wrote:

> I commend 60-something Cramer for the energy he displays in conveying
> useless information. I am a 60-something trader, and I am having
> some success trading. One cannot short this market enough. Where
> is Cramer coming from?

Mar 04 02:12 PM

[Conan the B...:]

Gravity404: I think that it means as they lower the dividend, the stocks drop and that raises the percentage amount again.

or something, who knows...Its JC.

Mar 04 03:12 PM

[samadams:]

He's the luckiest guy in the world he got into investing in the early 80s just as the great leveraging began. Any fool could have made money riding the performance enhanced Dow from 875 to 14k...the fools who made the most money are those who took the most risk. They are the same ones who are in denial now as we de-leverage. Use any rallies to lighten your position. We have further to go to the downside.

Mar 10 02:47 PM

[PeteK:]

Wow, 100% negative on this guy so far !!
This is probably a record.

Mar 14 04:51 AM