Cramer's Mad Money- Bottom's Up (8/12/10)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday August 12.

Potash (NYSE:POT), Deere (NYSE:DE), MedcoHealth (NYSE:MHS), Allergan (NYSE:AGN), ConEdison (NYSE:ED), Duke Energy (NYSE:DUK), Progress Energy (PGN), Agnico-Eagle Mines (NYSE:AEM)

Cramer predicted Wednesday's sell-off would continue to some degree on Thursday, with a third of the market in freefall, a third falling more slowly and a third bottoming at the opening. He continued his discussion of stocks to buy at the bottom in sectors that are ready for a bull market.

Although the news of wheat shortages should have been good for agriculture stocks, worries over futures have kept share prices down. Cramer would buy Potash (POT) and Deere (DE). He discussed the move he predicted in MedcoHealth (MHS) which opened at 44 and close up at $46.78. Allergan (AGN) also moved up. Cramer thinks both still can be bought. In utilities there were three "flips" on Thursday when ConEdison (CON), Duke Energy (DUK), Progress Energy (PGN) started low and closed higher. These stocks still have room to run. While Cramer likes gold, he thinks it really had to be bought on Wednesday, when there was a golden opportunity for buyers of Agnico Eagle Mines (AEM) and SPDR GoldShares (NYSEARCA:GLD).

The Psychology of the Dow

A lot of what is going on in the market is psychological. Cramer discussed a glass half-full, glass half-empty attitude. No matter what the news is, when Dow is above 10,700 there is panic. When the Dow is 9,500, suddenly, people get optimistic:

The fact is, we get too positive above Dow 10,700, but we're too negative when we get to DOW 9,500, which has always been my low-end target. We are filled with glee...when we're above DOW 10,500. But below, 9,500...I gotta say we're locked in a range.

We came from the upper bounds where the euphoria does indeed seem very misplaced. When the market's high, the glass is half empty. But when you listen to the bears, you'd think it was completely empty. When the market is lower, we think it's half full. The same problems we shrug off when we were below 10,000, make us terrified when we hear them when we're above it.

Regardless of whether the news is about commodities, China or a company's earnings, The Street adjusts its attitude according to the movement in the Dow.

CEO Wall of Shame: AirTran's (AAI) Robert Fornaro

Cramer asked viewers to vote for the next inductee to the CEO Wall of Shame. AirTran's (AAI) Robert Fornaro garnered 38% of the votes. In his tenure which began in 2007, the stock has declined 55% compared to a 28% dip in the S&P 500 for the same period. It has declined much more than its peers in aerospace, and is down 25% compared to an average 5% decline for the industry. With the stock down 33% for the year, Robert Fornaro should either merge the company with one of its competitors or quit, according to Cramer.


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