Cramer's Stop Trading! Beware of Caveat Emptor (7/11/09)

Stocks discussed on the Jim Cramer's Stop Trading! TV segment, Friday July 10.

GM (GMGMQ), AIG (AIG), Novellus (NVLS), Apple (AAPL)

Cramer criticized the SEC for resigning investors to the caveat emptor school of non-regulation. The fact that GM's "worthless" stock and AIG are even trading at all leaves investors vulnerable to "traps" that are inevitably a loser's game; “This is the American securities market, for heaven’s sake,” Cramer said. “There’s no caveat emptor. Protect us.”

The mood on The Street is overly bearish, and all good news is being ignored. Cramer gave the example of Novellus which had a paltry lift after two important upgrades.

Cramer predicts Apple will report a number that will "blow your socks off."

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Comments

[Timeline St...:]

Apple will report $1.38 EPS on $8.6 billion of GAAP revenue. They will report between 10 and 11 million iPods, 2.3 million Macs, and 5.5 million iPhones.

They will also report another $3 billion in free cash flow, and a balance sheet number showing that they have $32.5 billion in cash, short term equivalents, and long term investments, which means that their forward P/E greatly understates their future potential.

Buy it now. It's cheap.

Jul 12 01:33 PM