Cramer's Mad Money - You're Doing Fine Oklahoma (10/30/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday October 30.

Cummins (NYSE:CMI), Caterpillar (NYSE:CAT), 3M (NYSE:MMM), Goldman Sachs (NYSE:GS), Wells Fargo (NYSE:WFC), IBM (NYSE:IBM), Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Macy's (NYSE:M), Home Depot (NYSE:HD), Family Dollar (NYSE:FDO), J.C. Penney (NYSE:JCP), J.Crew (JCG)

Cramer's optimism was renewed as he headed to the Heartland for Mad Money's Back to School Tour which on Friday was located at University of Oklahoma's Price College of Business. In spite of the Dow's 250 drop on Friday, Cramer said there is room for hope when comparing recent performance of stellar stocks to the disaster in the markets a year ago. In industrials, Cramer noted "remarkable quarters" from Caterpillar (CAT), 3M (MMM) and Cummins (CMI). The financial sector was threatened with nationalization a year ago, but Goldman Sachs (GS), Wells Fargo (WFC) and Bank of America (NYSE:BAC) withstood the storm. A weak economy didn't stop IBM (IBM), Intel (INTC), Microsoft (MSFT) and Apple (OTC:APPL) from showing strength.

At first, mainstream retail names like Macy's (M), Home Depot (HD), J.C. Penney (JCP) and J Crew (JCG) were facing stiff competition from discount retailers like Family Dollar (FDO), but Cramer thinks consumers are returning to the better stores. Low natural gas and oil prices are a good sign, and natural gas is an area that is "growing and ready to hire."

Cramer expects another 7% pullback, so he suggests cutting some positions in stocks that have performed well. He urges investors to stay in stocks which are going strong.

CEO Interview: Aubrey McClendon, Chesapeake (NYSE:CHK)

With Friday's decline in the Dow, it's time to think about long-term themes, and one of Cramer's favorite investing ideas recently has been natural gas. The University of Oklahoma is an appropriate place to talk about the fuel, since the state has the fourth largest natural reserves and is the second in drilling.

Aubrey McClendon says the reason Washington is not talking about natural gas is that legislators are not well-informed about newly discovered reserves and the superiority of the fuel over alternatives. Not only is so-called "clean coal" not yet available, it is a "technical fantasy" and "financial insanity" according to McClendon. Vehicles are already equipped to run on natural gas, and the adoption of natural gas as a main fuel could create over a million jobs. Cramer says those who believe Washington will get behind natural gas should buy Chesapeake.

CEO Interview: Larry Nichols, Devon Energy (NYSE:DVN)

Continuing the natural gas theme, Cramer invited Larry Nichols, CEO of Devon, onto Mad Money. While Cramer is a fan of natural gas in general, Devon has hedged only 16% of its third quarter production and only 35% of its fourth quarter production; a wise move if natural gas is going to meet Cramer's predicted level of $6 in 2010.The stock has been a strong performer, and has gained 233% in the last ten years. Larry Nichols discussed the company's successful strategy of maintaining a balance between oil and natural gas projects, even though Devon is the leading natural gas producer. Nichols has dealt with falling natural gas prices by temporarily shutting down wells, but they are ready to operate again as soon as prices rise again. Cramer is bullish on Devon, and on natural gas in general.

Student Questions: Freeport McMoRan (NYSE:FCX)

Cramer recommended a portfolio of 10% gold and 20% foreign stocks as protection against a declining U.S. economy and a falling dollar. He likes Freeport McMoRan (FCX) as a China play.


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