Cramer's Mad Money - Get 'Em While They're Cold (6/19/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 19.

Get 'em While They're Cold: BP (BP), JP Morgan (JPM), Apple (AAPL), Coke (KO), Pepsi (PEP), General Mills (GIS), Dominion Resources (D), Con Ed (ED)

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.

Tech Specs: Cisco (CSCO), Ciena (CIEN), Akamai Technologyes (AKAM), Infinera (INFN), Cavium Networks (CAVM), EZChip Semiconductor (EZCH), NetLogic (NETL), Juniper Networks (JNPR)

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.

Child's Plays: McDonald's (MCD), Disney (DIS), Hasbro (HAS), Gap (GPS), VF Corp (VFC), Apple (AAPL)

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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Comments

[samadams:]

The market will hit bottom when this clown is off the air.

Jun 21 11:45 AM

[Voice of co...:]

Does anyone with an IQ above really care what the idiot cramer thinks? Except to short his best ideas?

Jun 21 02:32 PM

[Maxe Paul:]

"speculative field bet", great advice, buy them all so you may get one winner!

"five stocks for young investors". Code word for you have years and years to get over the future losses.

Compelling investment advice from an EXPERT?

Jun 22 09:40 AM

[punk_ash:]

There are so many other things that are cold and better than these garbage picks that are worth picking.

Jun 23 12:49 AM

[Dean M:]

When I read garbage like this it makes me want to put all my money in a cd.

Jun 23 12:51 AM