Cramer's Stop Trading! How to Play the Housing Recovery (8/25/09)

Includes: BAC, JPM, LPX, M, SHW, WY
by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV segment. Tuesday August 25

Weyerhaeuser (NYSE:WY), Louisiana Pacific (NYSE:LPX), Macy's (NYSE:M), Sherwin Williams (NYSE:SHW), Bank of America (NYSE:BAC), JP Morgan (NYSE:JPM)

Cramer welcomed news that Ben Bernanke is going to serve another term as Fed Chairman and was glad the decision of who would fill the position was not "politicized," (Bernanke was appointed by Bush); "The world loves Bernanke. He is a much loved figure," Cramer remarked.

On the housing recovery, Cramer would buy Weyerhaeuser on expectation that lumber will rise in price. Competitor Louisiana Pacific's price has already tripled and "is not nearly the company," Weyerhaeuser is. Macy's is also a good housing pick, and its furniture and large ticket items may be poised to make a move after the strong performance of its smaller merchandise.

Since people want to put a coat of paint on a house whether they are buyers or sellers, Sherwin Williams is also a good pick. Rather than homebuilders, Cramer would buy banks JP Morgan and Bank of America because they hold a lot of foreclosures and mortgages; “They’ve got the inventory and suddenly it’s been marked down to extremes, particularly in the case of JPMorgan.”


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