Jim Cramer's Stop Trading! 1/25/08: Headline Overreaction

Recap of Jim Cramer’s comments on Stop Trading! Friday January 25. Click on a stock ticker for more analysis:

Merck (MRK) and Schering-Plough (SGP): Both MRK and SGP are down after news their sponsored cholesterol drug, Vytorin, is being reviewed by the FDA, and Cramer issued an alert to buy both companies, and said this is another example of good drug companies falling excessively on bad news. "This is classic headline overreaction," said Cramer and think it is highly unlikely the FDA will pull Vytorin.

Thornburg Mortgage (TMA), Toll Brothers (TOL), Fannie Mae (FNM), Freddie Mac (FRE): Cramer prefers TMA and TOL to FNM and FRE, concerning which he said, "I just think that they're not investible. ... I didn't like them ... yesterday."

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Comments

[User 132211]

ceg has increased appreciably. Should I sell half or continue to hold.

[NormanLepoff, M.D.]

It is very easy to pick stocks when the market is going up. It is when it is going down or sideways that it is a challenge. Cramer failed miserably on both counts. Barrons was correct. An investor would do much better with an index fund than listening to Cramer. So beware!!!!