On Monday, following a broad and steep sell-off, Mad Money host and former fund manager Jim Cramer stated that he feels the about 6% drop was ugly but not terribly unexpected, as some people were contemplating a 1,000 point loss. He went on to state that he believes Monday’s trading looked like a slow-motion flash-crash, and that this is because the market was full of machine selling. Cramer also felt that gold will probably start to come off of these highs and go down a bit before the equity markets bottom out. Cramer suggested that the simplest way for a retail investor to follow and invest in gold is through the S&P gold ETF (GLD).
Cramer discussed Johnson & Johnson (JNJ) as a safe stock to watch, noting that it was down about 2% on Monday, or about one-third the loss of the broader market. He also noted that its yield is superior to a treasury because it is about the same rate with better tax treatment. Still, Cramer stated he would prefer to wait for JNJ to pay over a 4% yield, which would occur if it were to fall to $57 per share.
Cramer went on to discuss Eaton (ETN), which was down about 10% on Monday. Eaton has a yield of about 3.2%, which Cramer considered comparable to JNJ’s 3.6% yield, but with double the recent earnings growth. Cramer stated that ETN has performed poorly lately because people are speculating that its earnings will now drop. Cramer argued that this is not 2008, and that he believes ETN could be a good buy, especially if it continues down further, to where the yield crosses that 4% threshold.
Cramer was asked what he thinks about Berkshire Hathaway (BRK.A) (BRK.B), to which he explained that it does not fit the profile of what he now wants because it does not have a dividend. Berkshire was down 6.46% on Monday, or about the same as the S&P 500.
Cramer spoke with the CEO of Nordic American Tanker (NAT), Herbjorn Hansson, discussing a Reuters story about the shipper’s dividend policy. Cramer and Mr. Hansson both stated that NAT’s dividend was not halved, as the Reuters article alleged, but rather that it stayed the same level since the last quarter. Mr. Hansson also stated that he believes NAT is different than other shippers because they are not over-levered.
Cramer spoke with Goldcorp (GG) CEO, Charles Jeanes, discussing the progression of various new mines that the company is ramping up towards productivity. Cramer argued that he believes the equity in GG, like so many other miners, is lagging the increase in gold prices and that he believes it should eventually catch up to the increasing price of gold.
Cramer also stated that he continues to like the domestic oil producers, especially those with shale exposure. He specifically discussed EOG Resources (EOG) with its CEO, Mark Papa. Cramer stated that EOG used to primarily be a gas play, but it now primarily deals in oil. Cramer also noted that the earnings were good, with a big beat, but that EOG is now near its 52-week low. Nonetheless, it could still go lower, like almost everything did today.
Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives. I am long NAT.