Tech Is Stale, Apple Is Fresh - Cramer's Stop Trading! (5/1/08) 8 comments
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Recap of Jim Cramer’s comments on Stop Trading! Thursday May 1. Click on a stock ticker for more analysis.
Apple (AAPL), Research in Motion (RIMM), Mastercard (MA), Parker Hannifin (PH), Eaton (ETN), CSX (CSX), Union Pacific (UNP): Cramer would be in Apple until the release of the new iPhone, and then sell. As stated in his Mad Money program this week, Cramer believes “old tech” companies are stale and he believes the “new tech” companies are represented by names such as PH, ETN, CSX and UNP which are creating innovative products to conserve energy and solve practical problems. The only two tech stocks Cramer would buy are AAPL and possibly RIMM.
Concerning the economy in general, Cramer said, "I'm seeing money coming in for the first time in a long time. ... Maybe it's the $600 checks, maybe it's the income tax refund.” Cramer said recently a major retailer attributed improved sales to good weather and impulse buying. If this is the case, Cramer would also buy MA."
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This article has 8 comments:
Such anger! tsk tsk. You can't just take a stock recommendation from Cramer, buy it and wait for it to go up. You will lose money. It's always been that way; always will be.
You can make money from Cramer. I have. But here's what I do. I'm only interested in maybe 20% of the stocks he talks about. The other 80% is just entertainment, and is often too speculative for me. If he mentions something that interests me, I compare it to others in the same industry, checking past revenue and earnings growth, estimated future revenue and earnings growth, profit margin and return on equity, and IBD ratings (a momentum measure if there ever was one). Then I check the price and compute the PEG. Many of the Cramer and IBD stocks have PEGs near 2.0 and I just walk away. Many times I like a different stock than JC.
And even after all that, you will still lose money unless you buy smart. Once you decide on a stock to own, you have to wait for a pullback. Cramer says 5%. I never buy anything unless it pulls back at least 10% from a recent high. Sometimes it takes three of four weeks to buy something. Sometimes the stock just goes up and I never get a chance to buy it. Oh well. Say lavvie. Anytime I have just bought something without waiting for a pullback I have been working against a headwind and stand a 50-50 chance of losing money.
Mad Money does move stocks and if you buy one or two or three days after it's mentioned, the Wall Street pros will eat you for lunch. If I had to guess, I would guess that Papita has dicovered this the hard way. If you want somebody to tell you what to buy instead of trying to figure it out yourself, subscribe to Gorilla Trades and do what they say. (BTW, JC is 53 - or maybe 54, he's 10 years younger than he claims).