Jim Cramer Blog

GM is in trouble. Delphi has exclaimed that its workers need a change in order to continue its business with GM and has said it is the only way for them to emerge from bankruptcy. In addition, the ability of GM to use a different supplier is not feasible because they design and begin to produce materials for their cars years in advance and the time and effort this would take to switch would prove to be disastrous. But, that's is not the end of GM's troubles, three other companies that they rely on are also in bankruptcy: Colins & Aikman Corp., Dana Corp., and Tower Automotive. GM is continuing to loose its market share to the Japanese car manufacturers in almost every category of vehicle. This is a company that is on its way out. The only solution to this problem is to strip the company from its roots and start over. I guess that's why a certain someone came in and bought a significant portion of the company. Unfortunately, GM's assets are worth more than GM itself.

It looks like TSCM did hit a bottom early this week. The stock continues to trade up despite a flat market. If guidance stays the same, there is no question that TSCM has a clear path to $8 before its next downturn. If you take a look at the chart of the stock, the behavior over the past three months has been like clockwork. Buy at $6.75, sell at $8.25, and then short it for a month.

Google is up in the pre-market on the release of their newly implemented ads in local maps. This will now attract more local advertisers to use more of their marketing budget with Google. This is just one more service that this company released that has enormous potential. Imagine what they will do with the extra $2 billion that they are planning on raising through the sale of more of their stock.

Today on "Stop Trading" Cramer highlighted the Goldman Sachs call that Japanese financial companies earnings estimates are 35-45% too low. He also proclaimed that his trust owns a bank in that sector, MTU. He said the stock has had a run but the it is nowhere near its high of the 1980s. Another factor affecting the markets today had to do with the sell-off of the 10-yr treasuries. When the price of bonds go down, the interest rate rises. This is a major reason why the homebuilders were down today. Cramer said that if home buyers can withstand the fact that natural gas rose 50%, they can deal with their interest payments rising incrementally. I completely agree with what he said. If you peer at interest rates from a birds eye view, they are not even close to their highs over the past 20 years. People want to own a home. Home sales will not slow until rates move drastically higher.

The NASDAQ has now closed at a 5 year high. As this particular index continues to rise, the itch of retail traders to move all of their money into the stock market will begin to become unbearable. The companies that will be impacted the most by this include: Ameritrade (AMTD), E-Trade (ET), and Chuck Schwab (SCHW). If the NASDAQ and its basket of tech stocks break out, it could create the same kind of panic buying that revealed itself during the tech boom of the late 90s. It could be a good time to get into this sector before this panic buying begins to occur across the entire tech sector.

As the day nears that Google will be included into the S&P 500, the stock continues to push forward. This behavior is mainly because of the heavy buying of institutions whose charter directs them towards following the S&P 500 index. In addition, the shorts are getting scared out of this stock. In fact, I believe there is going to be an even bigger short squeeze coming in the near future. Remember there were a significant amount of people who thought that this stock was worth $250-300 a share. If the Nasdaq continues to rally look for GOOG to significantly outperform the market.

Today's rate hike sent the markets straight down after the announcement at 2:15p.m. This was mainly because the language that Bernake used indicated that further hikes may be needed in order to keep the economy in check. In my opinion, the mere fact that this language was used, indicates that our economy remains strong. And, in strong economies, stocks rise. So, why the selloff? The main reason for the market behavior today had to with the fact of uncertainty relating to the possible new policies that may be set forth by our new federal reserve chairman. I think the stock market would have gone down today even because even if there was no change in rates because investors would become scared that the economy is beginning to slow and would move their money into more cyclical plays. There is only one way to end these drastic market moves on the day that the Federal Reserve meets: Don't publicize these meetings. These comments and actions that the Reserve publicizes scares the American public. Let the public determine on their own how the economy is doing based on GDP, job reports, etc., and the rise or decline of major companies earnings. This would increase investor sentiment and eliminate these major market swings that we have seen in the past on the days or weeks following a Federal Reserve policy change on interest rates.

As you can see from the chart at http://finance.yahoo.com/q/bc?s=TSCM&t=3m, TheStreet.com has been in a trading range for the past 3 months. As of yesterday, it hit the bottom of the range. From here, it's a clear shot to anywhere between $7.75-8.50. It's time to jump in this stock today.

Palm stock closed slightly down Friday after surging earlier in the day on news that the company's profits grew in its fiscal third quarter, fueled by strong shipments of its Treo smart phones. Is this a trend that will continue to reveal itself, or was this unexpected growth due to the ongoing litigation of Research In Motion? The mere fact that the Blackberry service may be getting shut down is enough for businesses to not even consider going with RIMM as the connectivity of choice for their employees. Once a company begins to use a technology like the Blackberry or the Treo, many day to day operations depend entirely upon the devices working with precision. If a service like Blackberry would get shut down, the result could cause a business to be in complete disarray for days. I believe the unexpected growth of Palm will not continue because now that RIMM's legal problems are almost resolved, the consumer will focus back on the Blackberry because it is clearly the better service. Palm looks like a good short sale from here.

This past week Lucent and French Alcatel announced that they are in late stage merger talks. They described the deal as a share swap and a merger of equals. In my opinion, this would be a great move for LU, considering the fact they have had little success expanding their revenue and overall business prospects. But, will this merger be approved? This past year, a good number of deals between companies in different countries have been thwarted due to changes in foreign policy. France recently blocked an Italian bid for French utility company Suez and we all know about the failed Dubai ports deal. Will these two governments allow for this type of merger creating an international telecom behemoth?

It seems like today was the day for the next batch of Google news that tends to send the stock soaring. This past week, I got tired of waiting for this news and sold most of my shares. This is the bottom that we have all been looking for. After all the bad news that has plaguing this company, whether it be getting nailed by an unexpected tax rate or a slip up by top executives in the company, this is exactly what was needed to push this stock out of the current hole that it has been in. Now, because they have been added to the S&P 500, mutual fund managers across the country will not only add this stock to their portfolios, but will be forced to buy the stock because they promise a certain asset allocation in their respective prospectus'. As of tomorrow morning, all of those lofty estimates the analysts on Wall Street predict will finally have some credibility. I'm now reconsidering my move last week selling the stock, and the chances of my company buying deep in the money options are pretty high. I feel this is the best way to get in at this point. A further update will be given around noon when the stock has leveled out.

This stock was upgraded today which makes it twice in the past month. This company continually invests more and more money into their distribution chains. They've made aggressive moves towards taking over market share in this sector. After the move today on high volume, do you think this stock price will come down 5% before pushing through its current level?

Microsoft is in the process of being a victim of large numbers. The company is so large that it will take a mind-blowing innovation to generate a 10-15% increase in revenue. In addition, because they are so large, they are constantly being scrutinized by the world's governments regarding monopolistic issues. This has obviously been built into the stock for years as it has traded in a range from $25-30, back and forth, year over year. How are they going to attract new investors? The kind of investors that I'm talking about are those who buy new innovative stocks by the likes of Google and Apple (both of which I'm bullish). The investors that put their money into these type of stocks are young, more risk-tolerant, and are looking for other similar companies to throw more of their hard-earned money into. This is the money that will make this stock move. But, the only way to attract these new investors is to split this company up. This is the perfect timeframe to do so after the delay of their new Vista operating system (too much bureaucracy to get things done on time). Break the company in two parts. Software for internet and the other software for hardware. It seems that the major news sources that have been highlighting Microsoft have to deal with their recent battle with Google over buying a stake in AOL, and the overall development of their MSN search. It is obvious that the company's sector of greatest growth is going to be in their internet sector. They need to concentrate on this and flush out the rest of their holdings into a different company. Their growth rate, revenue growth, and overall investor sentiment would be significant. It's virtually impossible for Micrsoft to move in any meaningful way without this breakup. Even if there is major growth in their internet holdings, and they become more and more successful with MSN search, it will be difficult to see an overall bottom line difference with all the software and products that Microsoft supports. Breaking the Microsoft's internet sector into it's own company would put Google in a very vulnerable position. They would directly compete as opposed to competing in a round about way. And remember Microsoft is a seasoned veteran when it comes to managing a world technology power. Google is still learning, which is evident by the accidental slip of the CFO in an "official/unofficial" press conference that their overall search engine growth was beginning to slow . Google still has a lot of growing up to do. This new company could potentially have the same kind short and long-term growth that will drastically increase their diversity of investors and finally move this company in a forward direction.

There is one main reason why I go to yahoo.com, to gain access to their finance section. That is the only reason why I visit that site more than Google. Today, Google launched their finance section of the site. Traffic to financial sites was up 10% in February. How do you think this will help Google's bottom line? Could they potentially surpass Yahoo in overall traffic?

We all know how popular Jim Cramer has become. And, I feel like it is only the beginning of this boom. Jim Cramer will have the same familiarity as a public figure like Lou Dobbs. As his popularity increases, so will the hits on his website, http://www.thestreet.com. What does this mean? This means that we may be too late, but I'm still a buyer. This stock went from $5-$7 in less than 3 months. I'm making the call right now, this stock is going to $10 by year end. I have recently sold my entire stake in Google and have moved that money into TheStreet.com. They will procure more subscriptions (at $300 a piece) and their advertising revenues will increase substantially as Jim Cramer becomes more of a household name. As Jim Cramer's popularity continues to explode, so will TheStreet.com's revenue. Buy TSCM.

The world oil market is in crisis. The recent increased demand by companies such as China has really created a strain on the market. But, this strain has not hit the current market price of oil. It has put a strain on our foreign policy. Many of our decisions are mainly based on strategic advantages that will give us access to more oil. They are decisions that may continue to create turmoil in the Middle East. Think about it. If the Middle East ever gained any kind of stability, they would get together and create one Islamic state. This Islamic state would be a very developed economy (because of the oil) which would have more leverage with the West than anyone else in the world. If the West ever tried to get something that this Islamic state didn't want, all this new state would have to do would be to place an embargo on all oil leaving the region. If this would happen, all hell would break loose in the oil markets and 95% of the people on earth could not afford to drive or heat their homes. It would also kill the automotive and airline industries. Our economy would plummet. Is that why the US wages war with a developed nation with Iraq? Or, is that why the EU allows unflattering cartoon depictions of the prophet Mohammed to be published in large newpapers? Or, is that why the UN is addemately trying to block the nuclear program of Iran? If they would develop this technology, all that would happen is it would help the economy. It doesn't seem like it would be beneficial for Iran to wipe out Israel because they know we would thwart off any aggression towards Israel and not allow it to happen.

Fact: Google is one of the fastest growing companies in the world. Fact: They have the capability of being mentioned in the same sentence as Microsoft in terms of their ingenuity and buying power in the tech industry. Fact: Google needs to grow up before any type of legitimate investor will again consider them as a good investment. Last week the CFO of Google came out and decided to disclose unsubstantiated financial aspirations. Those statements drove the stock down close to 10%. But, I thought Google was one of those "New Age" companies that don't believe in the so-called "Norms" of business. They won't give guidance and they won't cooperate with the US Government because of privacy issues. They will cooperate with the Chinese government, which I don't have a problem with under the circumstances. The founders of Google, whom I have the utmost respect for, need to change the way they deal with their investors. I was, at one point, a large investor in Google. As of today, I have sold my entire position because I honestly do not know what to think. It the company still growing as fast, or is growth slowing? What are next quarters' expectations? There weren't estimates this past quarter and look what happened to the value of the stock. How can an informed investor truly believe that Google is a good investment if they have no guidance or expectations whatsoever? How can they beat the street? How can one gauge if their investment can be legitimized? The answer is: they can't. Google needs to change their investor relations and until they do, expect this stock to at most tread water.