Jim Cramer's Wall Street Confidential, Jan. 3

Recap of Jim Cramer’s comments on Wall Street Confidential, Wednesday January 3. Click on a stock ticker for more analysis.

A Blockbuster Year: Microsoft (MSFT), Best Buy (BBY), Office Depot (ODP), Home Depot (HD), Lowe's (LOW) and Costco (COST), Wal-Mart (WMT), Target (TGT)

Cramer says that although drugs and tech were not "good enough" last year and had a "bad last 10 days," they are suddenly getting a boost, while investors are backing away from oil.

When Aaron Task pointed out Goldman Sach's downgrade of some tech stocks, Cramer responded that while January is usually tough for tech, the trend will be "flipped" because of a tremendous upsurge in PCs. The catalyst is Microsoft's Vista which will drive BBY and ODP away from marketing their large-screen TVs in favor of advertising their PCs.

Cramer would sell HD now and buy it lower, and dismissed rumors of a leveraged buyout, since HD is too large for an LBO. Its main problem, according to Cramer, was that it was run as a financial company by former CEO Bob Nardelli, while LOW and COST are more pleasant places to shop. Cramer would also sell Wal-Mart, which demonstrates the principle that "underinvesting in the stores and trying to save its bottom line is not a way to save a retailer." Cramer says he would rather own Target, but would avoid retailers which sell alot of winter clothes.

Task called 2006 an unexpected "blockbuster" year, and Cramer noted that while the upsurge began in July, it could keep going for another six or seven months. "The lesson of last year is that the worry should be that you are not bullish enough," Cramer said. With low inflation, high profits and the possibility that the Fed will cut interest rates, "Being careful could be reckless here," he said.

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