AI
Tuesday, December 20, 2005 4:24:22 PM
Cramer's got something special for Santa this year!
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RealMoney Radio Recap: Rally Round Retail
By TheStreet.com Staff
12/20/2005 4:05 PM EST
With only five days left before Christmas, Jim Cramer talked Santa Claus Rally on the "RealMoney" radio show Tuesday.
Monday's terrible trading put a scare into a lot of hedge fund managers, who only get paid once a year, Cramer said, saying that they woke up to the possibility that their check could disappear in the next eight days of trading.
"So they began to actively bid on stocks below the market to preserve their paydays," he said.
And the perfect amount of confusion in the macroeconomic picture will allow hedge fund managers two weeks of robust holiday trading, Cramer said, creating the lift investors want to see, going into the end of the year.
"The only sector I am worried about is retail," Cramer said, because with just four shopping days before Christmas and a transit strike in New York City, stores with big exposure in that market like Urban Outfitters (URBN:Nasdaq) , Ann Taylor (ANN:NYSE) and the Gap (GPS:NYSE) might not make their numbers.
Cramer believes that the right amount of confusion means the economy doesn't get so hot that the Fed takes interest rates up, but doesn't cool so much that it pushes us into a recession.
Housing prices are up, but producer prices are declining. "That creates confusion, and that's what we want," he said.
"We want oil to drift, but not to plummet... .We want GM (GM:NYSE) to teeter but not to collapse." The murkiness will justify two weeks of buying, because there's no hard evidence that says not to put money into the market.
In the "danger zone" segment, Cramer told investors to dump Oracle (ORCL:Nasdaq) . "If it didn't make acquisitions [like its recent PeopleSoft acquisition] , you'd see the true picture of how bad this company is doing and you wouldn't want it," Cramer said.
"It's a yesteryear tech stock. It's not coming back."
Cramer's Callers
Tuesday's calls and emails focused on Internet stocks, with the first listener asking about smart Wi-Fi and Wi-Max plays.
Cramer recommended Qualcomm (QCOM:Nasdaq) , which he owns, because the company is a leader in CDMA (Code-Division Multiple Access), a very clear wireless connection.
He believes that Intel (INTC:Nasdaq) is a good Wi-Fi play, even though its primary business is in PC chips.
As for Wi-Max, Cramer called it a tech out in the future because unlike Wi-Fi and CDMA, its success depends on when the government decides to open up the airwaves necessary to use the technology.
"It will be a terrific, terrific technology. Alvarion (ALVR:Nasdaq) is the play there.
He added that while BellSouth (BLS:NYSE) and AT&T (T:NYSE) are interesting dividend plays, he doesn't see growth returning to those companies for some time.
There were plenty of Google (GOOG:Nasdaq) questions for Cramer who said he was pretty sure the search company was through with acquisitions and now focusing on developing its own products.
But because the stock -- trading Tuesday afternoon at roughly $428 -- is near his price target, Cramer said he couldn't be as aggressive on the company.
"I think Yahoo! (YHOO:Nasdaq) is a better buy here," Cramer said, adding that both companies are expensive, speculative stocks.
As for eBay (EBAY:Nasdaq) , Cramer said the company is more of a Christmas play than investors might assume. "I think a lot of Christmas presents are being bought on eBay. The core business is very good," he said.
But away fro the core business, Cramer said that the Skype acquisition was too expensive. Taking the person-to-person phone unit into account, he said that the stock is a push.
The Fat in the Hat
Cramer was still wary about RedHat (RHAT:Nasdaq) , because it's more expensive than a company like Google when you compare its P/E ratio with its growth rate. He was even warier of Amazon.com (AMZN:Nasdaq) .
"I've always regarded it as expensive," he said, adding that it's growing at 23% but sells at 80 times earnings. "That's even slower than RedHat," he said.
But Cramer was bullish on F5 Networks (FFIV:Nasdaq) , a traffic management company that makes software for Web companies.
"That's a growth industry and I like it," he said.
Cramer said that travel on the Web was too cutthroat a business to be a money-maker. He told listeners to steer clear of Priceline.com (PCLN:Nasdaq) , adding that even though travel on the Web has been explosive, nobody made any real money.
Niche Internet companies he recommended include The Knot (KNOT:Nasdaq) and Blue Nile (NILE:Nasdaq) .
As for the prospect of another Internet boom in 2006, Cramer said that it's possible but will never replicate the performance of the original dot-com explosion.
Cramer believes that projections for online advertising to get 6% to 7% of the market in 2006 are low, and that the figure will come in closer to 10%. Even though he said the Web was the place to look for money, he cautioned listeners, saying that he wants things to come down before he puts more money into the sector.
For investors paying attention to the January effect, next month might be the time to bargain-hunt. Cramer explained that people are encouraged to take tax-motivated losses in December, which drives down already weak stocks.
Then in January, the selling lets up and the stocks bounce back.
Cramer said that Fortune Brands (FO:NYSE) was a buy below $75. The stock traded near $78 Tuesday.
Finally, Cramer recommended Shanda (SNDA:Nasdaq) , a Chinese Internet stock with a limited downside because of the prevalence of online gaming on the mainland.
http://www.thestreet.com/_yahoo/funds/realmoneyradiowrap/10258391.html?cm_ven=YAHOO&cm_cat=FREE&....
.............................................
RealMoney Radio Recap: Rally Round Retail
By TheStreet.com Staff
12/20/2005 4:05 PM EST
With only five days left before Christmas, Jim Cramer talked Santa Claus Rally on the "RealMoney" radio show Tuesday.
Monday's terrible trading put a scare into a lot of hedge fund managers, who only get paid once a year, Cramer said, saying that they woke up to the possibility that their check could disappear in the next eight days of trading.
"So they began to actively bid on stocks below the market to preserve their paydays," he said.
And the perfect amount of confusion in the macroeconomic picture will allow hedge fund managers two weeks of robust holiday trading, Cramer said, creating the lift investors want to see, going into the end of the year.
"The only sector I am worried about is retail," Cramer said, because with just four shopping days before Christmas and a transit strike in New York City, stores with big exposure in that market like Urban Outfitters (URBN:Nasdaq) , Ann Taylor (ANN:NYSE) and the Gap (GPS:NYSE) might not make their numbers.
Cramer believes that the right amount of confusion means the economy doesn't get so hot that the Fed takes interest rates up, but doesn't cool so much that it pushes us into a recession.
Housing prices are up, but producer prices are declining. "That creates confusion, and that's what we want," he said.
"We want oil to drift, but not to plummet... .We want GM (GM:NYSE) to teeter but not to collapse." The murkiness will justify two weeks of buying, because there's no hard evidence that says not to put money into the market.
In the "danger zone" segment, Cramer told investors to dump Oracle (ORCL:Nasdaq) . "If it didn't make acquisitions [like its recent PeopleSoft acquisition] , you'd see the true picture of how bad this company is doing and you wouldn't want it," Cramer said.
"It's a yesteryear tech stock. It's not coming back."
Cramer's Callers
Tuesday's calls and emails focused on Internet stocks, with the first listener asking about smart Wi-Fi and Wi-Max plays.
Cramer recommended Qualcomm (QCOM:Nasdaq) , which he owns, because the company is a leader in CDMA (Code-Division Multiple Access), a very clear wireless connection.
He believes that Intel (INTC:Nasdaq) is a good Wi-Fi play, even though its primary business is in PC chips.
As for Wi-Max, Cramer called it a tech out in the future because unlike Wi-Fi and CDMA, its success depends on when the government decides to open up the airwaves necessary to use the technology.
"It will be a terrific, terrific technology. Alvarion (ALVR:Nasdaq) is the play there.
He added that while BellSouth (BLS:NYSE) and AT&T (T:NYSE) are interesting dividend plays, he doesn't see growth returning to those companies for some time.
There were plenty of Google (GOOG:Nasdaq) questions for Cramer who said he was pretty sure the search company was through with acquisitions and now focusing on developing its own products.
But because the stock -- trading Tuesday afternoon at roughly $428 -- is near his price target, Cramer said he couldn't be as aggressive on the company.
"I think Yahoo! (YHOO:Nasdaq) is a better buy here," Cramer said, adding that both companies are expensive, speculative stocks.
As for eBay (EBAY:Nasdaq) , Cramer said the company is more of a Christmas play than investors might assume. "I think a lot of Christmas presents are being bought on eBay. The core business is very good," he said.
But away fro the core business, Cramer said that the Skype acquisition was too expensive. Taking the person-to-person phone unit into account, he said that the stock is a push.
The Fat in the Hat
Cramer was still wary about RedHat (RHAT:Nasdaq) , because it's more expensive than a company like Google when you compare its P/E ratio with its growth rate. He was even warier of Amazon.com (AMZN:Nasdaq) .
"I've always regarded it as expensive," he said, adding that it's growing at 23% but sells at 80 times earnings. "That's even slower than RedHat," he said.
But Cramer was bullish on F5 Networks (FFIV:Nasdaq) , a traffic management company that makes software for Web companies.
"That's a growth industry and I like it," he said.
Cramer said that travel on the Web was too cutthroat a business to be a money-maker. He told listeners to steer clear of Priceline.com (PCLN:Nasdaq) , adding that even though travel on the Web has been explosive, nobody made any real money.
Niche Internet companies he recommended include The Knot (KNOT:Nasdaq) and Blue Nile (NILE:Nasdaq) .
As for the prospect of another Internet boom in 2006, Cramer said that it's possible but will never replicate the performance of the original dot-com explosion.
Cramer believes that projections for online advertising to get 6% to 7% of the market in 2006 are low, and that the figure will come in closer to 10%. Even though he said the Web was the place to look for money, he cautioned listeners, saying that he wants things to come down before he puts more money into the sector.
For investors paying attention to the January effect, next month might be the time to bargain-hunt. Cramer explained that people are encouraged to take tax-motivated losses in December, which drives down already weak stocks.
Then in January, the selling lets up and the stocks bounce back.
Cramer said that Fortune Brands (FO:NYSE) was a buy below $75. The stock traded near $78 Tuesday.
Finally, Cramer recommended Shanda (SNDA:Nasdaq) , a Chinese Internet stock with a limited downside because of the prevalence of online gaming on the mainland.
http://www.thestreet.com/_yahoo/funds/realmoneyradiowrap/10258391.html?cm_ven=YAHOO&cm_cat=FREE&....
