Cramer's Mad Money - T. Boone Pickens: Leave BP Alone (6/4/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday June 4.

Conversation with T. Boone Pickens: BP (NYSE:BP), Exxon (NYSE:XOM), XTO Energy (XTO)

Cramer and T. Boone Pickens made a bet of $100 that there would be natural gas legislation by Memorial Day. While the holiday passed with no official legislation, T. Boone Pickens told Cramer that everything was in place for reforms favoring natural gas as a bridge fuel:

You know we have got the legislation in place, and it is going to happen. Senator Reed, the majority leader, told me, he said he had to have an energy bill this year. I do think that I owe you $100, though, because I said that we would have it passed by Memorial Day. And that did not happen, but we did get it filed before Memorial Day.

The American financier says he likes natural gas because it is "clean, cheap and it's ours," but says he also enthusiastic about other forms of fuel, as long as they aren't imported from overseas:

I am not totally natural gas, you know that. What I am is American. I will take any fuel in America, so when you said something about Navistar and electric, great. I like the battery. I am even a guy that will take ethanol. I will take anything but OPEC oil. That is what I don’t want.

Concerning the BP (BP) spill, Pickens said:

BP and Fat Allen, over in the Coast Guard, they are doing everything that they can to get it fixed. And I would say leave them alone. Let them work it out. Let them solve the problem. And then investigate whether there was some mistake made and if they want to know the details of it, you can find out. But do not investigate while they are trying to fix the problem. Leave them alone.

T. Boone Pickens said he is still a believer in clean coal. Concerning energy alternatives, "We will need it all," he said, and predicted oil could go to $300 to $400 in the next 20 years.

Forecast: More Pain: Ciena (NASDAQ:CIEN), AutoZone (NYSE:AZO)

The Dow was down 324 points on Friday after a negative employment number. This one news item has so much effect on the stock market, said Cramer, because the fundamentals of the U.S. economy provide a fragile buffer against the European contagion, and if there is one lackluster domestic news story, stocks get killed. While the beginning of the coming week might provide some relief as stronger European countries are going to raise capital, the bond sale in Spain and Portugal will be the focus of news Wednesday and Thursday, and the news void in the U.S. late in the coming week will mean that these stories will have a major negative impact on stocks. In addition, Greece hangs in the balance and is teetering on the verge of bankruptcy.

Cramer reiterated his call for extreme caution. While he would like to tell viewers to get into Ciena (CIEN) before its earnings report or to buy AutoZone (AZO), the fact is, the only stocks working right now are accidental high yielders.

How to Play Ball in a Volatile Market: Chipotle Mexican Grill (NYSE:CMG), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), Deckers (NASDAQ:DECK), Intuitive Surgical (NASDAQ:ISRG), Express Scripts (NASDAQ:ESRX), (NYSE:CRM), DuPont (NYSE:DD), EastGroup Properties (NYSE:EGP), Annaly Capital (NYSE:NLY)

In this volatile market, there is one thing that is certain: more pain lies ahead. Using baseball analogies, Cramer suggested 3 strategies for playing the market game in the coming week.

1. Keep the bat on your shoulders. The negative employment number certainly threw us a curve ball, and with more bad pitches coming, Cramer advocated patience. Investors don't need to hit the ball out of the park in the near future, and should wait for a better pitch.

2. Try bunting. With the Dow up from its low 6,500, even though it is off its high, a worthwhile strategy might be to sell some stocks to raise extra cash. The most crucial thing to avoid, said Cramer, is giving back those profits.

3. Hit Singles. On Thursday, Cramer discussed C.A.N.D.I.E.S.: Chipotle Mexican Grill (CMG), Apple (AAPL), Netflix (NFLX), Deckers (DECK), Intuitive Surgical (ISRG), Express Scripts (ESRX) and (CRM), seven stocks that will be the first to rally when stocks come back, according to Cramer. He urged investors to be on the lookout for high yielding stocks at low prices like DuPont (DD), EastGroup Properties (EGP) and Annaly Capital (NLY). Investors who want to buy 10 shares in a company, but are nervous about the action in the coming week, should pick up 2 shares every day until the end of the week.

Mad Mail: Halliburton (NYSE:HAL), Express Scripts (ESRX), General Mills (NYSE:GIS)

Cramer told one viewer that Halliburton is "too scary" and is too connected to BP and the disastrous oil spill; "I don't like reading the New York Times front page about stocks I own...I like to keep them in the business section."

Cramer explained the Express Scripts (ESRX) and General Mills (GIS) stock split by picking up a pencil and breaking it in half:

Do you have more Express Scripts? No, you have two pencils… they are each in half…we do not care about splits… they are simply an irrelevance.. if you buy before the split, it does not necessarily mean that it is going to go higher after… if you buy after the split, it does not necessarily mean that it is going to go… none of it matters… what matters is the fundamentals of companies in the stock market… and right now the fundamentals of the companies in the stock market, with the exception of Express Scripts and General Mills, and a couple of other special situations… are not so hot.


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