Jim Cramer's Wall Street Confidential, 11/6/07: In Retail, Bad is Good

Recap of Jim Cramer’s comments on Wall Street Confidential, Tuesday November 5. Click on a stock ticker for more analysis:

Target (TGT), J.C. Penney (JCP), Kohl's (KSS) and Lowe's (LOW)

Things are going to get uglier in retail, and that is the precise reason, according to Cramer, investors should go shopping in the sector; “It is so counterintuitive sometimes to be right," he went on. "But all of my career, the biggest money I've made is when I was counterintuitive. Retail is awful, the numbers will be awful and you need to buy."

Cramer suggests buying some usually strong retail names such as TGT, which should sell its credit card division, JCP, KSS and LOW. He believes the decline in the stocks may not be due to selling, but may be in anticipation of the National Retail Association’s prediction of a sluggish holiday season.

"We should have a cathartic down leg if the same-store sales are as bad as I think, but it's entirely possible that that's when the hedge funds that have been very short this group cover," Cramer predicted.

He suggests buying half a position in retail now and half when the fundamentals get worse. However, he adds the stock prices might not necessarily drop.

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