Michael Delaney

Cramer's Lightning Round - A Plethora of Fantastic Rails (4/28/09)

Don't stop covering the game show. I like the game show. It's fun to watch the game show. Play KSU if you like volatility and upside (and downside, be careful) potential. Play UNP or BNI if you are more conservative and like the dividends. There is no wrong answer here.

Stimulus Puts Railroads on Fast Track to the Future

I do not think we are going to see hydrogen powered trains in the near future, but high-speed rail in areas that are already electrified (the northeast corridor) are possible in one to two years. High speed rails in Europe have absolutely decimated short-hop airline flights. Studies have shown that travelers prefer planes to trains when train travel exceeds about four hours. Thus, high speed trains in Europe (at 150 mph) will replace air flight out to about a 600 mile radius, and with a carbon footprint of 10% that of an airliner. High speed rail in the United States will run at a more modest 110 mph so we can expect high utilization on trips of 450 miles or less.

A high speed rail line from New York to Los Angeles sounds intriguing, but would probably have low ridership because most people would want to fly when crossing a continent.

Nothing To Ship - Cramer's Stop Trading! (10/22/08)

Dr. Norman,

Did you buy RIG at $120 because Jim Cramer said it was a buy, buy, buy? Even though you knew the price of oil was dropping every day? Even though you knew we were headed into a recession and the demand for oil was going to go down before it goes back up?

If you did, then you are to blame, not Jim Cramer. And oil will rebound. Probably sooner than most people think. I think two years from now you will wish you had some $120 RIG. If you thought you could make a quick 20% and be out, this is a mighty dangerous environment to try that with any stock. If you thought you would hold RIG for 18 to 24 months, what's the problem?

Tech Is Stale, Apple Is Fresh - Cramer's Stop Trading! (5/1/08)

Papita,

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).