Cramer's Mad Money - When the Facts Change...(10/23/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday October 23.

Note: Friday's Mad Money broadcast was a repeat program that last aired on June 25, 2009.

When the Facts Change...

When critics berate Cramer for changing his mind, his frequent response is from the wisdom of John Maynard Keynes, "When the facts change, I change my mind. What do you do, sir?" Cramer gave the example of his calling a bottom in March when the Dow hit 6,500, and he reasoned that unless most of the Dow stocks went to zero, the index couldn't go much lower. Although he was widely criticized by those who were holding onto their bearish theses, the Dow has since risen an additional 1,500 points. This demonstrates the rule that investors need to be flexible and get rid of a thesis that isn't working.

The Price is Right: Bank of America (BAC), Sprint (S), Advanced MicroDevices (AMD)

At the right price, even an unattractive stock can be a buy, said Cramer, who cited the example of Bank of America (BAC) and Sprint (S), which were both priced for bankruptcy. Those who bought these stocks precisely because they were so low have made a big profit. Cramer also told viewers to be on the lookout for secondary offerings, many of which are at a 10% discount to the actual stock price. Cramer said he is glad he changed his mind about Advanced MicroDevices, not because of improving fundamentals, but because of its falling stock price. The stock has doubled since Cramer recommended buying it just because it was too cheap.

Be a Skeptic

Cramer urged viewers not to take what a particular company says at face value. He is skeptical about a company that tends to blame its problems on the general economic climate, even though things are tough. For every company that blames the economy for its poor performance, there is usually a competitor who is thriving in a challenging environment.

Upside Downsides and Apple (AAPL)

Upside surprises usually move stocks, but not all upsides are created equal. Genuine upsides are created by companies like Apple (AAPL), which in spite of the recession, has constantly delivered new products and has increased sales. Upside surprises to beware of are those created by management through share buybacks, cost cuts, changing tax rates and other forms of number crunching. Upsides created by management are likely to fall right back down again if fundamentals don't support the move. Increased sales should be the main driving force for upside surprises.

Manipulation Works Both Ways

While many have criticized Cramer for his optimistic take on the markets, being negative does not necessarily equal credibility. While the pump and dump strategy is infamous (influential investors talking up a stock and then selling it into strength), hedge fund managers who are shorting stocks can do the same trick on the negative side, so there is no reason to have more faith in prophets of doom than in those who look on the bright side. Even if a hedge fund manager holds no shorts, he could still have a vested interest in talking down the markets if he feels he is underinvested and wants an entry point.

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Comments

[number6:]

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.” 10/06/08

This, along with SO , panicked much of the listening masses. 5 years has gone by pretty quickly?

I

Oct 25 09:32 AM

[Maxe Paul:]

Surely this article is a joke?

Cramer called the bottom now?

Cramer called many false bottoms, (my favourite was the one on bear Stearns at $50!) and never managed to call a top ever?

I am the only person who called the exact bottom, so far.

Here is my comment two weeks before the bottom seekingalpha.com/autho...

Here is my prediction on March 3 seekingalpha.com/autho...

Seriously, show me the transcript where Cramer "called the bottom"?

Cramer, you are a complete stooge.....again!

Oct 25 09:35 AM

[doc_hawkins:]

Oct 08 The Market was in correction
Oct 09 The facts have changed
I would dismiss the 5 year part. No one including the Soviets were good at 5 year plans.

Oct 25 09:40 AM

[CaptainJJack:]

I subscribe to Cramer's "Real Money", and unlike many others, I think it has a lot of value.

That said, Cramer is a trader, not an investor. He will talk about missing the opportunity one day, and then tell you to sell a week later.

As far as bad calls, in February, 2000, Cramer declared that the ONLY companies worth owning were internet companies.

Still, even after all that, I do listen to his predictions or his calls, I listen to his analysis.

He is a good thinker, and I respect that.

Oct 25 09:43 AM

[Maxe Paul:]

OMG, i guess the saying, "some people never learn" rings true with you loud and clear?


On Oct 25 09:43 AM CaptainJJack wrote:

> I subscribe to Cramer's "Real Money", and unlike many others, I think
> it has a lot of value.
>
> That said, Cramer is a trader, not an investor. He will talk about
> missing the opportunity one day, and then tell you to sell a week
> later.
>
> As far as bad calls, in February, 2000, Cramer declared that the
> ONLY companies worth owning were internet companies.
>
> Still, even after all that, I do listen to his predictions or his
> calls, I listen to his analysis.
>
> He is a good thinker, and I respect that.

Oct 25 09:58 AM

[eddybaby:]

I guess if you make enough calls, some will be correct.

Oct 25 10:06 AM

[User 62119:]

Bulla in Spanish = Loud Noise

Cramer remember in March when you said to get out of Apple because of Steve Jobs medical leave. That proved to be a wrong call. I like your program but sometimes you go to the extreme.

Oct 25 10:21 AM

[richjoy403:]

Cramer does have a lot of influence (period!).

Like all those who are public with their buy/sell predictions, he will be wrong on occasion.

However, I am not a regular follower...only because I can't stomach his stupid antics. For me investing is a very serious business, and not worthy of "I am here to entetain you"...what he does not only lacks entertainment value--it is banal and slapstick.

I am not interested in any studies of his record; but I would like to know what % of his viewers continue to watch him for more than 1 year.

Oct 25 10:35 AM

[Glen L.:]

Cramer? You mean that guy who lives across the hall from Jerry Seinfeld? His market sense is spot on! Love that coffee table book that converts into a mini coffee table.

Oct 25 11:13 AM

[Tom Wisecoff:]

Maxie Paul,
There

Oct 25 12:58 PM

[John Lounsbury:]

Maxe - - -

Perhaps Cramer is riding on the coattails of Doug Kass, another Real Money contributor who called for a market bottom within three days on March 2. He missed by two days, but still stood by the call on March 6. www.thestreet.com/stor...

Doug reiterated his position on March 9 and before the market opened on March 10. www.thestreet.com/stor...

Again after the market closed on March 10, www.thestreet.com/stor...

Doug continued to make bullish calls until late July, when he started to counsel caution. www.thestreet.com/stor...

His bearishness has increased since, as he has been recommending a mix of long and short positions.

I have not followed Doug historically, to my regret. I will pay attention in the future.


On Oct 25 09:35 AM Maxe Paul wrote:

> Surely this article is a joke?
>
> Cramer called the bottom now?
>
> Cramer called many false bottoms, (my favourite was the one on bear
> Stearns at $50!) and never managed to call a top ever?
>
> I am the only person who called the exact bottom, so far.
>
> Here is my comment two weeks before the bottom seekingalpha.com/autho...
>
>
> Here is my prediction on March 3 seekingalpha.com/autho...
>
>
> Seriously, show me the transcript where Cramer "called the bottom"?
>
>
> Cramer, you are a complete stooge.....again!

Oct 25 03:41 PM

[realold:]

"some people don't listen" is more like it - you. This person is saying that he likes the way Cramer tries to analyze situations. I do, also. I think that he is often wrong, but sometimes he hits a chord. His "sell everything" call was right on and saved me a bundle, as I was considering it beforehand. Listen and maybe learn. Never love anyone, especially politicians,who always have personal agendas


On Oct 25 09:58 AM Maxe Paul wrote:

> OMG, i guess the saying, "some people never learn" rings true with
> you loud and clear?

Oct 25 04:55 PM

[Tom Wisecoff:]

Maxie Paul, There is one guy that called the bottom on the market on March 3rd but he predicted a year or 2 before that. A couple years or so ago he said GE would drop to around $7 a share and the market would bounce from there. On March 3rd he said it was at the bottom and rally time.

By: rivet
03 Mar 2009, 08:17 AM EST
Rating: post rating 0 Rate this post: Msg. 1082816 of 1111593
Jump to msg. #
GE Good play today hit my bounce target $7-8 Warren should have waited.

stockcharts.com/h-sc/u...

(Voluntary Disclosure: ST Rating- Strong Buy)


By: rivet
03 Mar 2009, 08:58 AM EST
Rating: post rating 0 Rate this post: Msg. 1082819 of 1111593
Jump to msg. #
rally time just around the corner? GE has very good long term support at $7-8

By: rivet
04 Mar 2009, 09:16 AM EST
Rating: post rating 0 Rate this post: Msg. 1083024 of 1111593
Jump to msg. #
big DXO gap this morning GE gapping rally time now keep that idiot Obama off the TV for a week or so.

He called the top on HOV a couple years back then the bottom on HOV which I made bank on when I bought 100k shares at ..60.

By: rivet
04 Mar 2009, 10:54 PM EST
Rating: post rating 0 Rate this post: Msg. 1083200 of 1111593
Jump to msg. #
HOV .75 was $600 plus per share during the height of the housing boom. It has split since. Anyone familiar with their financial picture. From the chart it looks like it might be a good play. I've been watching for the last couple of years.

stockcharts.com/h-sc/u...

He told us to buy AMD when it was $2 a share in Feb 09. I'm still long on that one and up almost 3 bag.

By: rivet
08 Feb 2009, 04:05 AM EST
Rating: post rating 0 Rate this post: Msg. 1079644 of 1111594
Jump to msg. #
AMD looking very good

stockcharts.com/h-sc/u...

(Voluntary Disclosure: LT Rating- Strong Buy)


rivet called the top on GE, CSCO, and others. The first time I read any of his stuff was a simple post of the old SUNW Sun Microsystems. SUNW was at $128 a share and rivet posted "Is it time for a SUNWset?". A couple of days later it started dropping dramatically. He predicted it would fall all the way to $3.5 a share he called all the support and bounces along the way.
He called AIG FRE FNM something stunk and they were houses of cards that would fall to penny status. He made that call 4 years ago at least.

Right now his hottest pick is HSCC Homeland Security Corporation. It ran from .0020 to .067 a few weeks ago. I sold 3 million shares average price of .045 for $135k my investment was about $14k. I recently bought back in at .008-.012. Here's his call for the rally back in Sept and calling for buying starting as soon as tomorrow.
----------------------...
By: rivet
23 Oct 2009, 02:38 PM EDT
Rating: post rating 5 You rated it: post rating 5 Msg. 963805 of 963817
Jump to msg. #
By: rivet
15 Sep 2009, 03:38 PM EDT
Rating: post rating 0 Msg. 962682 of 963803
Jump to msg. #
HSCC volume steadly picking up. The .0050's maybe GOOOON!

By: rivet
16 Sep 2009, 07:33 AM EDT
Rating: post rating 0 Msg. 962689 of 963803
Jump to msg. #
HSCC volume will take a big leap forward soon. HSCC will become a household name. Volume will drive the price. The play of your lifetime is about to leave the station.

stockcharts.com/h-sc/u...

rivet

By: rivet
16 Sep 2009, 09:59 AM EDT
Rating: post rating 1 Msg. 1106082 of 1111440
(Reply to 1106052 by rivet)
Jump to msg. #
HSCC volume already 500k which is what the average daily volume for the last couple weeks has been.


By: rivet
16 Sep 2009, 10:07 AM EDT
Rating: post rating 1 Msg. 1106083 of 1111441
Jump to msg. #
HSCC .0070x.0075 665k will see a record volume today


By: rivet
16 Sep 2009, 10:16 AM EDT
Rating: post rating 0 Msg. 894 of 975
Jump to msg. #
HSCC will see huge volume increases starting today. pps will follow.

stockcharts.com/h-sc/u...


By: rivet
16 Sep 2009, 10:25 AM EDT
Rating: post rating 0 Msg. 962704 of 963803
(Reply to 962701 by john7777)
Jump to msg. #
jonh777 this is just the start. The mm will not know where the volume is coming from. This will be ever increasing it is not coming from the normal NIZ or investment boards but its coming, so hang on. The run started on the NIZ. I gave lots of time for anyone to get on board. The time is right.

Economic uncertainty
World unrest
Terrorist threatening our President
Weak leadership in the White House and Congress
On and ON

HSCC simply the stock play of our lifetime


9:18 AM EDT
CLB00412 HSCC .017bid ask .018

9:20 AM EDT
QQQQ HSCC .017 +91% .017x.018 17 Sep 2009

9:22 AM EDT
QQQQ HSCC .019 +113% .019x.02 17 Sep 2009

9:33 AM EDT
QQQQ HSCC .02 +124% 17 Sep 2009

9:39 AM EDT
CLB00412 HSCC .02 +124% 17 Sep 2009

9:41 AM EDT
QQQQ HSCC .025 +180% ask .03 17 Sep 2009


9:42 AM EDT
QQQQ HSCC .03 +233% 17 Sep 2009

9:43 AM EDT
QQQQ HSCC .03x .035 mm's are scrambling 17 Sep 2009

9:51 HSCC .04 +349% .037x.04 17 Sep 2009

17 Sep 2009, 10:47 AM EDT
Rating: post rating 0 Msg. 962796 of 963804
Jump to msg. #
HSCC .065 +630%

That's kinda how it's gonna go for HSCC real soon. You have this afternoon to buy the shares you want.

----------------------...

Kramer and the Gurus on CNBC may have the spot light but rivet has the cluebag.


Watch HSCC closely this week things might get exciting.

Tom Wisecoff

Oct 26 01:40 AM

[Maxe Paul:]

Amazing, how many people NOW claim they called the bottom! LOL,

Lets get real here, i called the bottom to the exact number on the S&P, not F&*%$'N Cramer, i did not call multiple false bottoms and tell people to buy Bear Stearns at $50, did I?

Personally im not an ego freak who wants to go around telling everyone i called A/the bottom, such as Cramer, BUT this just WILL NOT fly with me im afraid, im not going to sit here and read this garbage that Cramer called the bottom.

CRAMER, PULL YOUR F%&$*$@G HEAD IN!

Oct 26 08:26 AM

[Myny:]

Yes, you are totally not an ego freak. I dont see why would anyone think so.


On Oct 26 08:26 AM Maxe Paul wrote:

> Amazing, how many people NOW claim they called the bottom! LOL,<br/>
>
> Lets get real here, i called the bottom to the exact number on the
> S&amp;P, not F&amp;*%$'N Cramer, i did not call multiple false bottoms
> and tell people to buy Bear Stearns at $50, did I?
>
> Personally im not an ego freak who wants to go around telling everyone
> i called A/the bottom, such as Cramer, BUT this just WILL NOT fly
> with me im afraid, im not going to sit here and read this garbage
> that Cramer called the bottom.
>
> CRAMER, PULL YOUR F%&amp;$*$@G HEAD IN!

Oct 26 08:58 AM

[Maxe Paul:]

MUHAHAHA, have you ever heard of sarcasm?

IN FACT, i challenge you, MR JIM CRAMER to a bottom picking contest, and we will see who is the "bottom picking world champion", and who is not!

Loser gets there arse kicked (literally) by the winner on your show......segment........ channel time........5 minutes of wasted time, or whatever you call it.


On Oct 26 08:58 AM Myny wrote:

> Yes, you are totally not an ego freak. I dont see why would anyone
> think so.

Oct 26 09:18 AM

[JJJ:]

I called the bottom! Compliment me!

Oct 26 10:02 AM

[knight:]

forget calling the bottom I acutally bought at the bottom (week before) still not bad. Just sold to early ;(

Oct 26 11:15 AM

[RiskAverseA...:]

Good advice, Shemp! Now take it, because the fact a massive short squeeze (see unbalanced RSI surge in both March and July) largely has brought stocks to present levels is evidence you fail to account for in your bullish stand. And speaking of facts, diminishing volume shows this rally climbing a wall of complacency, and since when is this bullish? This same condition wasn't bullish last March-May, 2008 (while you, on the other hand, were bullish) and it continues not being bullish now.

Oct 26 01:43 PM

[ebworthen:]

Where are the Three Stooges when you need them?

Oct 26 05:48 PM

[Robert.from.Ct:]

IF U SHEEPLE FOLLOW CRAMER U WILL GO BROKE>>>>&... SUCKS A BIG ONE

Oct 26 05:52 PM

[ebworthen:]

Wait, wait, wait...did you all hear Cramer being negative tonight?

Did you hear Cramer sounding the "Caution, warning" bell?

Did you hear Cramer say he would feel o.k. about earnings reports if the DOW were at 8,000?

Whoops! Holy Hannah! If Jim Cramer is negative, that means we will retest March lows before long, maybe before next spring.

Oct 27 01:44 AM

[HW2:]

The same is true today , even more so , that , has always been true for the stock market : If you don't have money to lose don't put it there. Even stocks that do well for decades can tank at any time . The stock market is for people who have money to burn .

Oct 27 10:28 AM