Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 19.
Many investors think the recent cooling off of the markets is a reason to run into defensive stocks, but that was the strategy two weeks ago. Cramer told investors to buy cold and sell hot; oils, banks and techs are cheap now and it is a good time to buy Apple, JP Morgan and BP on sale. The jump in defensive stocks is making them too expensive to buy; Coke, Pepsi and General Mills have each increased by about $5, and Con Ed and Dominion Resources have jumped 10%. However, that doesn't mean that it is time to unload all defensive stocks; Cramer says 40% of every portfolio should be comprised of defensive stocks to offset the losses incurred from higher risk holdings.
Cramer has been recommending speculative tech stocks for a while now, but on Friday he outlined one method for taking risk and maximizing returns. He suggested taking a "speculative field bet" and buying similar kinds of stocks, so if one name gets hit hard, the losses may be mitigated by gains. On the internet video trend, which is expected to comprise 60% of all internet traffic as opposed to 33% now, Cisco is a good play, but Ciena, which produces switches for video signals, will also work. For more risk, Cramer recommends Akamai, Infinera, Cavium and Netlogic. The latter three specialize in deep packet inspection technology which delivers quality video faster. Cramer warned viewers that these stocks depend on the fortunes of Juniper and Cisco, so it is important to watch those two stocks as well. As with all speculative plays, it is essential to do homework, buy on scale and use limit orders, Cramer cautioned.
Cramer discussed five stocks for young investors; these companies can get kids interested in the market and grow along with the young shareholders. McDonald's is a perennial favorite for kids and has a solid 3.5% dividend, international exposure and is a good weak dollar play. Disney is another fun stock for kids, who enjoy Disney theme parks and Pixar films. CEO Robert Iger is a reliable, CEO and the Disney brand is timeless. Hasbro is a cheap stock and has steady, consistent growth. While Gap has significant name recognition among kids, Cramer thinks VF Corp has as much appeal, particularly with its popular North Face brand, and is a better company. Every kid's portfolio should have at least one share of Apple, said Cramer, since the company's iPhones and iPods are here to stay.
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