Jim Cramer's 10 Predictions for 2008

Jim Cramer listed his top 10 predictions for 2008 this week. Some of his forecasts are more likely than others, while others may just be wishful thinking.

1. Goldman Sachs (GS) makes more money than every other brokerage firm in New York combined and finishes the year at $300 a share. Not a prediction—an inevitability. In fact, it’s only January, and I think it’s already come true.

2. Oil goes much higher, maybe as much as $125 a barrel... We are running out of oil more quickly than people can imagine, and that means great returns for oil companies. Just buy the stock of the company you filled up at today or buy a driller (Transocean (RIG) is my favorite), then sit back and make money.

3. The Fed arranges an Arabic Heimlich maneuver on Citigroup (C), so the banking giant doesn’t choke on the worst mortgage portfolio in the country.

4. Verizon (VZ) becomes your cable provider.

Cramer praised Verizon's Fios, and predicted that the stock will be the best performing in the Dow Jones averages. Time Warner (TWX) and Comcast (CMCSA) will be hit hard, he adds.

5. Turning to private equity, Cramer predicted that Cerberus Capital Management will fail to resuscitate Chrysler (which he attributes partly on the choice of Bob Nardelli), and that Congress will agree to bail out the fund.

6. Cramer is bullish on Google (GOOG):

Google stock reaches $1,000. The company becomes one of the top three companies in the U.S. in market capitalization... and succesfully challenges Microsoft (MSFT) for operating-system dominance.

7. With the dollar weak, Cramer foresees European companies swooping in to buy up the likes of Merrill Lynch (MER), JPMorgan (JPM), Colgate (CL), Clorox (CLX), Whirlpool (WHR), and Black & Decker (BDK), which, he forecasts, will all see their stocks rise as a result.

8. Apple (AAPL), he predicts, will reach $300. He sees it successfully taking over the music business, and, among other knock-on effects, he forewarns that Warner Music Group (WMG) will file for bankruptcy.

9. Turning to the media, Cramer posits that the cash-strapped New York Times (NYT) will accept a buy-out offer from Mayor Michael Bloomberg at $20 a share.

Don’t be so quick to scoff: The cash is spare change for Bloomberg, who, don’t forget, already owns a small media company. I’d say the $10 share price is even money. That’s how bad it is at the Times. The Bloomberg buyout is probably a 100-to-1 shot, but may be less if he decides not to run for president and needs something else to do this year.

10. Returning to his lament over governmental and Fed policies, Cramer predicts that the victims of foreclosure will lead a march on the White House and lay siege on the Fed. This, he says, will lead to Bernanke resigning, his replacement slashing rates, and the markets rebounding. As Cramer admits, this one's a very very long shot.

But if Bernanke or a future Fed chair does cut rates meaningfully, here’s a sure bet: That’s the time to start buying.

Comments

[Paul M]

2008 will be the year where everyone else in consumer IT/gadget manufacture gets it on UI, coolness and jewelry quotient. 2007 valuation gain of the Horsemen is seen as justification for major investment in design.

How about these then for the Horsemen:

AAPL loses market share in portable media. Content delivery becomes fragmented with multiple sites offering audio and video. Higher bitrate DRM-free audio encoding becomes standard with AMZN taking significant share with lower cost MP3's playable on any and multiple devices. AMZN moves into video content distribution. Internet-based on-demand studio content starts to serve the long tail.

AAPL grows market share in personal computers. FLASH HD-based laptops released - with longer battery life, instant-on features. DELL, SONY and others counter, releasing laptop and and slick desktop models.

MSFT Zune players become the surprise hit as cooler alternative to ipod (look at this holiday sales) with better home media and XBOX integration. Zune competitor to iphone released. New XBOX released improving home integration and media features. Windows Media software provides open system access to multiple audio and video content sites. New WM releases on Vista and XP improve UI.

MSFT gains then in media applications and devices against AAPL. Corollary with Windows counter to Mac OS in mid 80's for PC's. MSFT surprises everyone with UI innovation. Will APPL release a gaming/media console to compete ?

RIMM rapidly loses market share to host of alternative smartphone providers. PALM is resurgent with new 3G devices and continues to offer both Windows Mobile and PALM OS devices. Windows Mobile becomes standard Enterprise smartphone OS with direct Exchange Server integration and is adopted widely by consumers.

Wireless service providers are compelled by Congress to curb contract-based-subsidy practices and open network access to compatible unlocked devices. NOK and ERIC see growth for mobile devices in NA, in particular for slider & candy bars with compelling jewelry quotient.

GOOG maintains search dominance but fails to grow market share against YHOO in Portal.

AMZN solidifies as primary online shopping site and expands significantly into audio and video content distrubution . Kindle sees early adopter and niche sales but fails to gain mass market acceptance.

Disclosure: I hold no position in MSFT but need to reconsider that fact

[Beltway Greg]

It appears that we think alike Mr. Cramer. I predicted Apple, GS, and ICE as possible entrants to the $300 club for 09 on New Year's Eve. I would also add that if oil continues to climb the solar companies will rise and the dollar will trend lower. (What exactly does trend lower mean?)

Beltway Greg
Locked, cocked, and ready to rock for 08.

[AshleyGrayson]

I Paul M can make and sell the substance he was on when crafting this contrarian vision, he'd make more money dealing than investing. The value of such predictions is that statistically, one may turn out right and become the slogan for next year. At issue is the assumption that businesses can change their model quickly under competitive pressure, which doesn't seem to be the case. Apple knows how to sell to the New Buying Paradigm. Microsoft is not organized to be competitive but to be a tax on the act of being in business. Microsoft's long tail is the brontosaurus tail of "developers" who make money making up for Window's faults. By being Windows developers these companies, even though many of them make useful, decent products, primarily profit from being local tax collectors for the empire. As long as they are scooping in the taxes, they will not need to change. Apple and Google seem able to continue their success and most of the New Buying Paradigm-based companies we will hoot about in 2009 aren't even traded yet.

[Malkiel]

I predict that in 2008 a lot of companies will position themselves well in their industries, and tech companies will go a lot of interesting places that will make them money later, but nobody's share price will do anything other than tread water because the economy and credit crisis will cause stock market downturns at the end of each quarter as institutional investors engage in "window undressing" to get rid of holdings that didn't meet guidance, which will be everybody...

[Tom B]

I predict that the doomed will die: UnBox, Hulu, XBox movie downloads, HD DVD in general.

[GeoffConsidine]

Mr. Cramer is a key agent of market inefficiency. His picks and analysis have consistently been shown to under-perform the market, yet his books are best-sellers, his TV show is a hit, etc. There were some good articles on SA that discussed his 'track record.'

[kkin365]

It is interesting that Cramer, being a China-basher, has no negative comments on Chinese-domiciled stocks. Why should Bernanke resign? He inherited the mess from Greenspan; the latter now writes articles in various financial publications trying to argue that he did nothing wrong while he was in office.

[Alan vonAltendorf]

What bugs me about RIMM is that it costs $4000 to buy a BlackBerry + service (minimum 2 year contract). As an enterprise perk, fine, but not something consumers will jump for when home prices skid and cost of livinng (food and fuel) spike.

[Larry Teller]

While he's admittedly not Cramer, Dan Weiss has five (less high profile) picks for 2008 that look solid:

www.vestopia.com/Blogs...

[billb]

His number 1 stock pick last year was GS. What a year for the financials, eh Jimmy? :)

Here we go again with the GS. The broken clock strikes again.

[Jake2]

Lest we forget: Cramer announced the end of the housing crisis some time ago (I've got street 'creds,'" he said. He also "predicted" 14,500 for the DOW in '07. The man is a shameless walking advertisement (sandwich board?) for his own products, books, tv show, etc.

[Long-ShortGuy]

What's an "Arabic Heimlich maneuver"? Sorry if I'm ignorant, but I'd appreciate an explanation.

[Brewer]

Paul M, are you actually Paul Thurrot? That is really wacky there--the part about Microsoft getting creative, making a good web presence, and being able to catch up in media distribution. ROL. I guess you threw in the part about Zunes just for added hillarity. The only Zunes that were really selling were old models that were very deeply discounted. They are never going to have anything like a 'cool' player. I see them copying Apple's every move as usual, that has worked for Microsoft for years, but the other part of their success is in leveraging their monopoly. How are they going to do that this time though? What company are they going to buy or bankrupt this time?

Who would need to 'catch up' in gaming? Catch up to what, Microsoft' level of money loss?

[Tyrosine]

Verizon FIOS? Just because a company has a great looking product on paper, doesn't mean it will dominate. I for one am a Verizon FiOS customer and with the hundreds of different bugs the system has, there's no way this will dominate the industry. That are three types of companies:
1) Ones that release their product too late and are beaten to the punch (Think Microsoft Zune)
2) Ones that release their product too early, and these are filled with bugs and they get their reputation beaten left and right (Verizon)
3) Ones that release their product when appropriate. My money is that Comcast and Cox are on this path.

I will not be renewing my Verizon Fios next year. Their poor customer service and untrained technicians have been driving me crazy long enough. Never in my life have I ever had to reboot my cable-box every couple of days, and my internet cuts out whenever I pick up the phone. Lovely.

[User 111942]

I am also frustrated with FIOS service and might switch back to COX cable
TR

[Philly Jim]

The bald-eagle oracle speaks and the markets jump. Hey Jim, I realize E-trade Financial may not fundamentally be a good buy but what the hell! Please say it will go to $100. but buy a ton for your trust first and we can all get rich quick, just like the good ol' dot-com days. Let's drive up all the commodities too, then WATER! Yeah >=)

[sbenard]

Here's an alternate to #10:
The Fed continues to lower rates to near zero, devaluing the currency into the dust, and inflation goes through the roof while we have nevertheless experience stagflation. Today's skyrocketing commodities (oil, gold, grains, softs all hit record highs today) prices and plunging stock market are the beginning of the fulfillment of this prediction.

[WAKEUP]

In his prior life, Cramer was a snake oil salesman in the Arizona Territory, where many of his customers' contorted skeletons can still be found, just under the sand.

[Tell it All]

Not true, Fios works and I never had a problem

[Kunst]

Cramer is an idiot.

[INURFACE]

Sorry, I think your all wrong about Cramer. His show is for entertainment pourposes only. Someone had to volunteer to be class clown, so when he raised his hand too fast he stuck his finger in his nose and caused brain damage, cut him some slack.

[User 136191]

Go to you tube type in The money masters and be enlightened..

[Kunst]

INURFACE-

That would explain it. At least the injury didn't turn him into a mass murderer.

[Victhom]

TWX will do very good in 2008 Jim sorry but...I guess you want them all for you little greedy man LOL :0) I guess Deutsche Securities knows more than you what's coming for TWX....

Time Warner "buy"

Friday, January 11, 2008 9:33:32 AM ET
Deutsche Securities

NEW YORK, January 11 (newratings.com) - In a research note published yesterday, analysts at Deutsche Bank Securities maintain their "buy" rating on Time Warner Inc (TWX.NYS). The target price is set to $26.

[Long-ShortGuy]

The apple prediction isn't looking so good.

[bigeasy]

GOOG at 1000 and AAPL at 300 - doesn't look promising - my predictions: GOOG 620 and AAPL 160 - we'll see...

[bigeasy]

I would think that both stocks should trade by year end at roughly a resonable 25x 09 earnings or 160 for AAPL and 600-620 for GOOG - Cramer I am sure has since disavowed his predictions!

[MichaelZhuang]

You getting all excited about Cramer's predictions. You might want to check our how his stock picks panned out. I studied the accuracy and one year returns of his Jan 2007 picks. The result is here ...

investmentscientist.co.../

[otm]

I find it amusing that anyone would be tracking the Lightning Round as if it were presumed that it would be anywhere near accurate. Maybe I am missing something, but I thought the whole purpose of the Lighting Round was not to make accurate predictions upon which any sane individual would make an investment, but rather to give off-the-cuff advice within a few seconds, from which one might start to do some basic research. As much as Jim preaches homework, I take the Lightning Round to be pure entertainment and not much more.

I would suspect that if he had the time to research each Lightning round stock thrown at him as he does other stocks which he has spent time researching, his hit rate would rise considerably. But then, we would actually be researching his real advice, as opposed to his entrertainment, off-the-cuff remarks, wouldn't we. And who knows, maybe we just wouldn't have as much ammunition with which to take pot shots at him, would we...

I am sure there is ample room for anyone to stand up in public and advise us poor simpletons of better stocks to invest in that Mr. Cramer; instead of taking shots, let's here your choices; then we can take shots at you, instead of simply letting you sit back and sound so wise by denigrating his comments.

[your_avid_investor]

Stop bashing on this Cramer guy. It's pointless and not contributing to any direction on how to treat his stock predictions. If my opnion about him helps, I see him as someone who is simply motivated by his fearlessness of the markets. He survived hell when he was working professionally as a hedge fund manager, and now, he lingers around as a quasi semi-retiree because he feels that this is the kind of enjoyment (for him, at least) that he should have had in the first place when he worked on wall street. He also seems to have some kind of obsession with trading, which he readily would admit to. If you read his book "Confessions of a Street Addict", he will formulate to you $ by $ on how he made his millions. He gives you all the trades (generally by sector, or the maket as a whole), the time, and even the payout $$. This guy had a lot of guts (or the stupidity of a dare devil). He would borrow VERY heavily and cash in on big one or two day payoffs. His timing of the market was everything. Plus the fact that he is probably crazy helps him.

[PureTruthiness]

I have studied Jim Cramer's main recommendations for one year. Conclusion: He is absolutely the best contrarian indicator I have come across in over 25 years of investing. Bet against every one of his predictions and history says you will hit big on 7 out of the 10 and get rich. Have you all forgotten his 2007 Stock of the Year -- NYX? How about his statement on Jan 10 that the bear market was over and it would be straight up from there. The market tanked from there and hit its previous lows again on Jan 22. Who can forget his terrific contrary success when, with Google at 720 he said, "It has momentum and is going to 1000." The Cramer crazies sent it up to 750 the next day, where I shorted it. In the next few weeks Google took the shaft with no elevator straight down to 400 without passing "Go." Finally there is the greatest contrarian call of all time, the Jan 24 prediction that Beaeeer Stearns would be taken over at a premium to its then price at 84. I shorted again. Bear went straight down to $4 in just 9 weeks and got a $2 takeover. I l-o-o-o-ve Jim Cramer. Finally, as proof of his uncanny ability, with Bear at $4, Cramer said "Sell." Bear was at $14 one week later and now stands at almost $11. You can't make this stuff up. The man is incredible! I don't know how he does it.

MY PREDICTION FOR 2008: Cramer retires and gives a goodbye speech from the deck of a Navy warship in which he proclaims, "You won't have Cramer to kick around anymore." In what will be later hailed as a brilliant move, CNBC replaces Cramer by hiring that guy from the infomercials with question marks all over his suit to give financial advice in Cramer's time slot. Cramer followers never realize anything has changed.
Neilson does a special study and discovers the 20% of viewers who followed Cramer and think he is brilliant are the exact same people comprising the 20% of the U.S. population who still think George W. Bush is brilliant and doing a great job.

[Patrick M]

Pure Truthiness, that's the best comment I've seen here for a long time.


On Apr 08 04:27 PM PureTruthiness wrote:

> I have studied Jim Cramer's main recommendations for one year. Conclusion:
> He is absolutely the best contrarian indicator I have come across
> in over 25 years of investing. Bet against every one of his predictions
> and history says you will hit big on 7 out of the 10 and get rich.
> Have you all forgotten his 2007 Stock of the Year -- NYX? How about
> his statement on Jan 10 that the bear market was over and it would
> be straight up from there. The market tanked from there and hit
> its previous lows again on Jan 22. Who can forget his terrific contrary
> success when, with Google at 720 he said, "It has momentum and is
> going to 1000." The Cramer crazies sent it up to 750 the next day,
> where I shorted it. In the next few weeks Google took the shaft
> with no elevator straight down to 400 without passing "Go." Finally
> there is the greatest contrarian call of all time, the Jan 24 prediction
> that Beaeeer Stearns would be taken over at a premium to its then
> price at 84. I shorted again. Bear went straight down to $4 in
> just 9 weeks and got a $2 takeover. I l-o-o-o-ve Jim Cramer. Finally,
> as proof of his uncanny ability, with Bear at $4, Cramer said "Sell."
> Bear was at $14 one week later and now stands at almost $11. You
> can't make this stuff up. The man is incredible! I don't know how
> he does it.
>
> MY PREDICTION FOR 2008: Cramer retires and gives a goodbye speech
> from the deck of a Navy warship in which he proclaims, "You won't
> have Cramer to kick around anymore." In what will be later hailed
> as a brilliant move, CNBC replaces Cramer by hiring that guy from
> the infomercials with question marks all over his suit to give financial
> advice in Cramer's time slot. Cramer followers never realize anything
> has changed.
> Neilson does a special study and discovers the 20% of viewers who
> followed Cramer and think he is brilliant are the exact same people
> comprising the 20% of the U.S. population who still think George
> W. Bush is brilliant and doing a great job.

[User 153975]

I love Dubya. Maybe he will move from the White House to Mount Rushmore next year.