Sky is Falling Part III

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Jim Cramer's Stop Trading! Buy Countrywide





By TheStreet.com Staff


2/8/2007 2:56 PM EST





Jim Cramer would still be buying Countrywide (CFC - Cramer's Take - Stockpickr


- Rating) even as the subprime lending business goes sour, he said Thursday on


CNBC's Stop Trading! segment.


Cramer said the warnings late Wednesday from HSBC (HBC - Cramer's Take -


Stockpickr) and New Century (NEW - Cramer's Take - Stockpickr - Rating) are


"just the beginning" of the shakeout of lower-quality names in the low-end


mortgage business.





"Some of these companies had bad models," Cramer said. "HSBC wanted in so bad,


they lowered their standards" in buying lenders like Household International.








By contrast, Cramer said, Countrywide and some of the other big lenders, such


as Wells Fargo (WFC - Cramer's Take - Stockpickr - Rating) and Bank of America


(BAC - Cramer's Take - Stockpickr - Rating) and Citi (C - Cramer's Take -


Stockpickr - Rating), "have models that show they aren't going to blow up,"


Cramer said.





Cramer said he would buy Countrywide before Wells because it's cheaper. He


also said signs of stress in the subprime lending arena raise the prospects of


a Fed rate cut sooner rather than later -- a move that would be hugely bullish


for most stocks.





Cramer also would buy J.C. Penney (JCP - Cramer's Take - Stockpickr - Rating)


ahead of a big media blitz tied to the all-important Valentine's Day next


week. He said the retailer is the best positioned department store right now.
 
<a href="http://www.cramerwatch.org/">Jim Cramer Watch</a>





Jim Cramer can pick stocks better than Leonard the Wonder Monkey. He doesn't beat the market though...
 
<p>Huh someone doesn't take Cramer's advice in that you should do your homework. CFC 2005 year end numbers compared to end of Q3 the negative amortization of their option arm portfolio increased 630%. I can't wait for 2006 year end numbers. Cramer tests his minyons and if they don't do their homework they fail. Oh and look at his great picks of 2000 <a href="http://www.thestreet.com/funds/smarter/891820.html">http://www.thestreet.com/funds/smarter/891820.html</a></p>
 
Cramer's picks from February 2000:





" A-ha, that just leaves us with tech. That's why we keep coming back to it. That's why, despite the 80% increase in the Nasdaq last year, we are looking at another record year now. It is by that process of elimination that I have picked my top 10. And my next 10 and my next 10 after. Only those companies are worth owning. The rest?"





Buying tech in 2000; that was a recipe for an 80% drawdown. Nice...
 
<p>IrvineRenter, </p>

<p>Do you think they might be doing the "pump and dump" schill? It would most certainly make sense, find a worthless stock, laud it for performance, let it go up and then dump it! Oh well.... </p>

<p>On a side note, this is one of the reasons why I'm i've kinda invested in the market as a whole, along with a healthy dose of CD's and Bonds. While my returns haven't been spectular, I do manage to return a nice healthy 7-8ish %. I DON'T time a damn thing except when the cd's/bonds mature. </p>

<p>good luck</p>

<p>-bix</p>
 
biscuitninja,





I'm not quite so cynical with Cramer to think he is pumping and dumping. I just think he is paid to give opinions about stocks. Even if he became very bearish on the market, he would still need to pick stocks because that is what he does. It would make for quite a boring show if he got up and said "Don't buy anything the market is about to drop."





Now you could make the larger argument that all these shows are shilling for the stock brokerage industry just like the NAR is a shill for the real estate industry. I would agree that is probably the case.
 
<p>I went back to look at old, old threads, and found this. Too bad Crammer can't have his nose rubbed in it.</p>

<p>Look at what he said about Citi! Many exclamation points!</p>
 
Ah yes Cramer's picks. Lets see how those worked out since 2/8/07.





<img src="http://img108.mytextgraphics.com/photolava/2007/11/03/citi-48dsytj0n.jpg" alt="" />





<img src="http://img105.mytextgraphics.com/photolava/2007/11/03/wfc-48dsze8wx.jpg" alt="" />





<img src="http://img106.mytextgraphics.com/photolava/2007/11/03/bac-48dt2o9on.jpg" alt="" />


<img src="http://img105.mytextgraphics.com/photolava/2007/11/03/jcp-48dt41yyy.jpg" alt="" />





I guess if you sold WFC at the right time you would have profited. But if you were still holding these stocks you would be <em>mad losing money.</em>
 
awgee,





IR posted a link above but it is an HTML disaster right now. IIRC there are one or two other sites that keep track of him.
 
Okay, I give up. What does "IIRC" mean? So many times I can figure out these acronyms by context after enough time and posts, but this one eludes me. Help?
 
First, you can't beat the market on a consistent basis. I think if you buy a limited number of stocks you could beat the market, but Cramer has too many stocks, therefore is well diversified and can't beat the market.





Why is everyone after Cramer? There are many other good/better investors out there. He has a column and it has to be popular which is what he does.
 
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