Cramer's Lightning Round - ProShares UltraFinancials Is a Hoax (6/12/09)

Stocks discussed on the lightning round session of Jim Cramer's Mad Money TV Program, Friday June 12.

Bullish Calls:

Saytam Computer Services (SAY): "I can't believe this comany reported a decent number...it is so good as a speculative play, I'd buy some."

Union Pacific (UNP): "I like all the rails..I think it is going to have an explosive quarter I give it a triple buy."

Peabody Energy (BTU): "If you want to own coal, own BTU."

Tetra Tech (TTEK): "Has been ramping...Obama second half play and I'm going with it."

Bearish Calls:

ProShares UltraFinancials. (UYG): I think it is a hoax I don't want you near this thing..this should never have been approved by the Commission...don't you dare touch that."

Riverbed Tech (RVBD): "I recommended it and took it off...I think you get another 5 or 6 points...I do not want you to sell but I wouldn't buy."

Fluor (FLR): "I don't really care for infrastructure plays...but Fluor is the best one."

Textron (TXT): "That CEO needs to take a permanent vacation. Now he's on an intellectual vacation"

Equinix (EQIX): "I think they are not proprietary..I want you to stay away."

OshKosh (OSK): "Has had a big run...sell sell sell."

Melco Crown Entertainment (MPEL) Las Vegas Sands (LVS)

Patriot Coal (PCX): "If you want to own coal, own BTU."

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Comments

[AndrewBaker:]

If ProShares UltraFinancials (UYG) is a hoax, then best buy SKF, the ultra-short to this ultra-long. Right now, with the market correcting and realization that the banks have overshot on the up, it's a good bet, methinks.

Jun 15 10:55 AM

[MattZN:]

All the ultra funds are a hoax. You don't BUY them, you SHORT them. Right now I'm shorting both the ultra-long and the ultra-short financials in equal dollar amounts. And I'm making money. That's how broken those things are.

Only a complete fool actually buys an ultra fund long. It doesn't matter whether it is an ultra-long fund or an ultra-short fund.

It's really unconscionable that the government still allows these things to exist.

-Matt

Jun 15 01:51 PM

[Old Trader:]

Matt,

Unfortunately, that (shorting) is not an option for those trading within an IRA.


On Jun 15 01:51 PM MattZN wrote:

> All the ultra funds are a hoax. You don't BUY them, you SHORT them.
> Right now I'm shorting both the ultra-long and the ultra-short financials
> in equal dollar amounts. And I'm making money. That's how broken
> those things are.
>
> Only a complete fool actually buys an ultra fund long. It doesn't
> matter whether it is an ultra-long fund or an ultra-short fund.<br/>
>
> It's really unconscionable that the government still allows these
> things to exist.
>
> -Matt

Jun 15 06:49 PM

[Northstar10000:]

Idiots
Not all ultra short/long ETF's are junk. Tell me how SSO/SDS
does not track the market almost perfectly. Also while you are at it tell me how these can both be shorted and make money. I know you can't. What they own or short has to follow the market., because they are the market. You might be/guess wrong on market direction but both of these will follow the trend.

Jun 15 07:38 PM

[Chkrazer:]

what an irresponsible fool

Jun 15 10:09 PM

[MudEngineer:]

Check the stock charts for the past year. UYG was at 25+ and SKF was at 150+. If you had shorted "both of them" you would actually have made a lot of money as they "both" went down. The way that they are supposed to work is one is supposed to track the exact opposite of the other percentage wise. I would like to sign up for a class action lawsuit on this farce. Any attorneys out there willing to make a lot of money?


On Jun 15 07:38 PM Northstar10000 wrote:

> Idiots
> Not all ultra short/long ETF's are junk. Tell me how SSO/SDS
> does not track the market almost perfectly. Also while you are at
> it tell me how these can both be shorted and make money. I know
> you can't. What they own or short has to follow the market., because
> they are the market. You might be/guess wrong on market direction
> but both of these will follow the trend.

Jun 15 10:29 PM

[Fitz919:]

The Ultra Shorts/Longs are very interesting to me. I've traded them extensively. One of the problems no one is addressing, is the fact that new shares are being created all the time. This lowers the price. Look at FAS and FAZ, they are around $10 and $5, and the daily share volume traded is astonishing. I realize that many daytraders can be in and out of these things dozens of times in a day...I've done that many times myself...so that can really pump up the daily volume.

Holding any of these overnight is foolish, your value will always erode. They are designed for single day use...that way you don't suffer the effects of share dilution and decay.

Jun 15 11:45 PM

[TCK:]

Matt , you can short any of these in your IRA by buying puts, or put spreads. I do it all the time.

Currently holding puts on FAS


On Jun 15 06:49 PM Old Trader wrote:

> Matt,
>
> Unfortunately, that (shorting) is not an option for those trading
> within an IRA.

Jun 16 07:18 AM

[doubleshortetf:]

Ultrashorts may not quite track the 2X target but I find it better tool than to short or put options. Like other poster said, cannot short on IRA account.

My fave ultrashorts are TWM, QID, SDS, SKF and FXP (risky but way oversold and hoopla by recovery led by China).

TWM is the best as Russel 2K way overshot.

Jun 16 01:34 PM

[Maxe Paul:]

If Cramer dose not like an ETF then it must be REALY bad, because i imagine he would be the person who would promote these like crazy.
Another ETF flunks the "test".

Jun 16 02:08 PM

[doubleshortetf:]

Not quite. I see it as positive for ETF as contrarian indicator to IDIOT MORON Cramer.


On Jun 16 02:08 PM Maxe Paul wrote:

> If Cramer dose not like an ETF then it must be REALY bad, because
> i imagine he would be the person who would promote these like crazy.
>
> Another ETF flunks the "test".

Jun 16 02:56 PM

[ken3602:]

There is a decay effect for sure, but if you say buying FAS in March at $3 and selling $9 in June is foolish I am quite not sure what is the smart thing to do. There are daytraders all over the stocks. Holding blue chip stocks for a couple of months or years is a lot more foolish and riskier many times. These etf's are not for 'buy and hold' if it means buy and hold forever, but if can successfully see a mid term trend on going or reverse, FAS, FAZ, SKF, SDS, SRS etc. can be a great tool to make a fortune.


On Jun 15 11:45 PM Fitz919 wrote:

> The Ultra Shorts/Longs are very interesting to me. I've traded them
> extensively. One of the problems no one is addressing, is the fact
> that new shares are being created all the time. This lowers the price.
> Look at FAS and FAZ, they are around $10 and $5, and the daily share
> volume traded is astonishing. I realize that many daytraders can
> be in and out of these things dozens of times in a day...I've done
> that many times myself...so that can really pump up the daily volume.
>
>
> Holding any of these overnight is foolish, your value will always
> erode. They are designed for single day use...that way you don't
> suffer the effects of share dilution and decay.

Jun 16 05:14 PM

[Oneder:]

Cramer got owned with his call on Melco (MPEL). He gave no reason whatsoever for why he didn't like it, other than to say he didn't like it. C'mon now Cramer, why not be more thorough than that? MPEL is trading up double digits today just days after the bearish call. Further, it has been upgraded by Deutsche Securities, UBS, and Citi. It was also initiated to a buy rating by other analysts. Additionally, he didn't take into account that Melco (Macau/China-based) is not affected by numbers coming out of Las Vegas.

Jun 18 01:17 PM

[249EM:]

Cramer will never like MPEL, because he jumped on board in the beginning, and when it didn't meet it's first deadline he called it a dog, and helped start the run down on this stock. C'mon like any construction project ever met a deadline. You emotional freaks on the stock market act like you've never been part of a new home construction or remodel.


On Jun 18 01:17 PM Oneder wrote:

> Cramer got owned with his call on Melco (seekingalpha.com/symbo...).
> He gave no reason whatsoever for why he didn't like it, other than
> to say he didn't like it. C'mon now Cramer, why not be more thorough
> than that? MPEL is trading up double digits today just days after
> the bearish call. Further, it has been upgraded by Deutsche Securities,
> UBS, and Citi. It was also initiated to a buy rating by other analysts.
> Additionally, he didn't take into account that Melco (Macau/China-based)
> is not affected by numbers coming out of Las Vegas.

Jul 30 09:24 PM