Cramer's Mad Money - The Capitalist Manifesto (7/27/09)

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Includes: ABT, AMZN, BAC, BMY, FCX, GLW, HON, KSS, RIG, SLB, TGT, UNP, VZ, WFC, WMT
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday July 27.

The Capitalist Manifesto

Cramer outlined an eight-part plan that would create jobs and advance idealistic reforms such as green energy and universal healthcare;“Capitalists of America, unite!” Cramer said. “You have nothing to lose but your jobs, your earnings and your homes. So get to it!”

1. Build natural gas pipelines and subsidize natural gas cars. This move would create jobs and stall Obama's cap-and-trade bill.

2. Build bridges, sewers and aqueducts; this plan is a "sure-fire job creator."

3. Create three private subsidized healthcare providers. This is a compromise between nationalization and the current situation which keeps companies from hiring new workers because of expensive benefits. Subsidies will make hiring more affordable.

4. Bring home troops from Germany, Japan and South Korea; "The Cold War has been over for almost 20 years," observed Cramer who thinks the soldiers could help with infrastructure projects.

5. Create new incentives for hiring. It is too easy for businesses to cut staff to make the bottom line. Giving businesses a bonus for bringing on new workers may remedy the unemployment crisis.

6. Install a solar panel on every home. This is a green solution for unemployment.

7. Build a network of trains from Maine to Miami, from New York to Chicago, and create a transcontinental line. This will stimulate tourism, make commuting easier and more affordable, create jobs and reduce greenhouse gases.

8. Delay card-check unionization and forced arbitration, at least until the economy recovers. These policies tend to scare off employers.

Tech's Multiyear Rally: Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT), Yahoo (NASDAQ:YHOO), Apple (NASDAQ:AAPL), Research in Motion (RIMM), Qualcomm (NASDAQ:QCOM)

The Nasdaq's 12 day upward march might be only the beginning of what may be a multi-year tech rally like those seen in the 1990s. The notion of a personal computer for everyone caught on quickly in the 1990s, and an 11 day rally in 1992 led by Intel and Microsoft was the beginning of what would be a 27% gain for the companies until 1994. Netscape and Yahoo led the internet revolution in 1996, and were up 7% in just 12 days and had risen 37% just a year later. In 2009, mobile internet is the new trend with Apple, Research in Motion and Qualcomm leading what Cramer thinks will be the next major rally. He noted that in 1992 there was a short decline before the sector headed back up, so for the short term, the stocks could go either way.

Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Honeywell (NYSE:HON), Verizon (NYSE:VZ), Corning (NYSE:GLW), Abbott Labs (NYSE:ABT), Bristol Myers Squibb (NYSE:BMY), Union Pacific (NYSE:UNP), Freeport McMoRan (NYSE:FCX), Kohl's (NYSE:KSS), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Amazon (NASDAQ:AMZN)

Why is the market tepid on strong results from Honeywell, Verizon and Corning, when it flew upwards on not-so-spectacular results from Eaton, Caterpillar and Ford last week? Cramer thinks the market is taking a much needed breather. However, since fund managers need to stay invested, he thinks the drop will be a gentle 3-5% decline rather than a steep fall. Since negative sentiments are already priced into the financial sector, banks such as Wells Fargo and Bank of America might be worth buying. The healthcare sector has yet to attract the attention of fund managers; buys in the sector include Abbot and Bristol Myers.

The main casualties will probably be industrials like Freeport, which could see a 5% decline, according to Cramer. Retailers such as Wal-Mart, Kohl's and Target will also see a drop in share price, and Cramer expects to see Intel at $18, Microsoft at $22, Amazon at $80 and Microsoft at $152. Cramer says stocks recently have run a marathon and need to take a breather before the next big race.

Don't Miss That Call; Schlumberger (NYSE:SLB), Transocean (NYSE:RIG)

Friday's action in oil should remind investors never to miss an important conference call. Oil stocks were down around 1 pm after Schlumberger's negative earnings report, but Transocean rallied at 1:30. Why? Schlumberger's CEO said that underwater drilling had remained "resilient" and there was "very little cancellation" in this area. Those who listened carefully to the conference call would have gotten into Transocean early enough to catch Friday's move.

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