Jim Cramer Blog

The last session of 2006 ends quietly, but the major market indices saw solid gains during the year. On Friday, the Dow ($INDU) ended the session with a loss of 38.37 points to close at 12,463.15. The S&P 500 ($SPX) fell 5.43 points to 1,418.30. The NASDAQ ($COMPQ) gave up 10.28 points to close at 2,415.29. Volume was light with the NYSE trading 1.01 billion shares and the Naz turning over 1.38 billion shares. Market breadth was negative by a 13-to-21 and 13-to-19 margin on the Big Board and Naz respectively.A lack of volume and very little tradable news kept stocks down Friday. However, 2006 finished with some very strong results. The Dow tacked on 16.29 percent, the SPX added 13.62 percent and the Naz was up 9.52 percent. The fact that the economy has remained solid despite a housing market slump and high prices is definitely bullish and this put traders in a buying mood. The last quarter of the year provided the bulk of the gains, mainly due to the fact that the Fed halted its string of interest rate hikes.Economic news on Friday was non-existent, which left traders with little news to trade on. Next week’s calendar will see some key reports, although the calendar remains light. However, the data will be crammed into three trading days due to the National Day of Mourning Tuesday in honor of President Gerald Ford’s death. All stock markets will be closed Tuesday as a result.Apple (AAPL) shares continued to get a lot of attention Friday, but this time the spotlight provided gains. AAPL shares added 4.91 percent to close at $84.84. The stock has struggled this week on option-related problems. An investigation into the company’s granting of options resulted in concerns there could be legal action. However, the company announced today that it would take an $84 million charge, but no current management, including Steve Jobs, will be indicted. Oil prices saw some gains Friday, which left crude prices basically flat on the year. Of course, there was a lot of volatility straddle between January and December. On the session, oil rose 52-cents to close at $61.05 a barrel. The high for the commodity came in mid-July when a barrel of oil cost almost $78. For the week, oil prices fell about 2.5 percent. Though we can expect some profit taking at some point, 2007 does look to be another strong year. Profits remain strong, the housing sector seems to be bottoming and inflation is moderating. Of course, there are always wild cards that provide volatility, but the bulls have to be please with 2006 and optimistic for 2007. Jody Osborne

Labels: AAPL

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
Cigna Jan 135 Calls (NYSE:CI - News) . CI's PowerRating is 5.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Intuitive Surgical Jan 95 Puts (NASDAQ:ISRG - News). ISRG's PowerRating is 5.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Baidu.com Jan 125 Calls (NASDAQ:BIDU - News). BIDU's PowerRating is 6.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
NutriSystem Mar 60 Puts (NASDAQ:NTRI - News). NTRI's PowerRating is 6.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Immunomedics (NASDAQ:IMMU - News). IMMU's PowerRating is 5.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggestsan extraordinarily negative earnings report, or other news which may negatively affect the stock.
None Today
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
CIT Group. CIT's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: BIDU, CI, IMMU, ISRG, NTRI, stock options

Rule #1: Resisting the Business Cycle, United Health Group (NYSE: UNH - News)
Cramer discussed more rules from his books: Jim Cramer's Real Money: Sane Investing in an Insane World, and Jim Cramer's Mad Money: Watch TV, Get Rich. His first rule deals with the business cycle which is largely controlled by the Federal Reserve's raising and cutting interest rates. When rates are reduced, the economy gets stronger, and investors should buy cyclicals such as "the dirty, smokestack stocks that make things like machinery, cars and minerals." When the Fed raises rates, the economy gets weaker, and it is time to get out of cyclical stocks and into companies that produce consumer staples, such as food and drugs. "You can't own cyclical stocks when the economy stinks, and you should stay away from the consumer staples when the economy's stronger," Cramer said, adding that this applies even if a company has strong fundamentals. He recalls his error of holding on to UNH when the economy picked up, and said that the selloff during the boom was a much bigger factor in the stock's decline than UNH's involvement in an options-backdating scandal.
Rule #2: "Analysts are never bullish enough on good stocks, and ... never bearish enough on bad stocks.": Ebay (NASDAQ: EBAY - News), Amazon (NASDAQ: AMZN - News) and Lucent (NYSE: LU - News)
The reason for the second rule is that analysts covering a stock are dealing with an entire sector for which they must find some stocks that are buys, sells and holds. "The Street will almost always treat a sector that's en fuego as being a lot less en fuego than it actually is," he said. Knowing this, investors can more easily spot which sectors are hot but underappreciated.He noted that this happened with oil stocks during certain times in the past few years when the sector was hot. Even the companies that were neglected or had a "sell" rating went up anyway. It can work the other way too, and Cramer thinks that analysts should have stayed bearish on eBay, Amazon and Lucent for a longer period of time.
Rule #3: Don't Be a Snob, Darden (NYSE: DRI - News), Ruth's Chris Steakhouse (NASDAQ: RUTH - News), Morton's (NYSE: MRT - News)
Because analysts inhabit an upper-class bubble, Cramer says they often miss out on companies that make low-end or mid-grade products. While they can more easily relate to stocks such as RUTH and MRT, most analysts missed out on 50% of Darden's big move between January 2005 and March 2006 because they turned their noses up at Red Lobster and the Olive Garden.
Rule #4 : "Whenever a stock is being heavily shorted and heavily hyped at the same time, it's time to sell that stock," NutriSystem (NASDAQ: NTRI - News)
Hype and a large short interest do not mix, but create a battleground where an investors should fear to tread, and Cramer commented, "You don't do something as risky as shorting a stock unless you're a well-educated investor who has done his or her homework on the thing." One can do research on a stock page on Yahoo or Google finance to see the percentage of shares that are shorted, and a large percentage of shorts indicates that there is a problem the bulls don't know about or do not want to face, as was the case with NTRI, which had problems with its distribution model. "So when all the analysts are having their lovefest with the stock, and you have an army of shorts sitting on the sidelines, you should see a red flag," Cramer said.
"Past performance is not indicative of future success."
Cramer warns viewers not to rely on past successes as a model for future investments, since "stocks have no memory and you could lose big." Investors should aim to make money, but not to feel "invincible" if they do and should avoid following the same patterns. Cramer recommended playing by the rules outlined in his books for successful investing.
Published By SeekingAlpha

Labels: AMZN, DRI, Ebay, Jim Cramer, LU, Mad Money, MRT, NTRI, RUTH, UNH

Labels: AAPL, AMR, IBM, IRM, PERY, SI

Cingular said it expects to carry more than 500 billion minutes of use on its network this year.
Cingular said people are using its service for longer periods -- an average of 755 minutes a month, as reported at the end of last quarter. Over the course of two years of network enhancements, the average length of a wireless call on the network has increased as much as 15 percent in some markets, the company said. Cingular says call volume has increased because of better quality as a result of $13 billion in enhancements. "It's common-sense business. If you give customers a quality product, they'll use it more often," said Ed Reynolds, president of network services for Cingular. "The investment we made is really paying off for us and our customers. People have noticed the difference and are taking full advantage of our services."
Cingular said the network investment gave customers access to more than 45,000 cell sites, "resulting in a substantial reduction in dropped and blocked calls as well as improved voice quality." Cingular Wireless, a joint venture of AT&T Inc. (NYSE: T - News) and BellSouth Corp. (NYSE: BLS - News), is the largest wireless carrier in the U.S., serving 58.7 million customers. BellSouth and AT&T's merger is pending FCC approval. Cingular Wireless employs more than 750 in Memphis, half of them in distribution; BellSouth, 650; and AT&T about 100.
Published by Bizjournals.com

Labels: BLS, T

Chip maker Intel Corp. said it plans to cooperate with a court order to produce documents related to its international business practices. The order, issued Wednesday, was called a "significant legal victory" by rival Advanced Micro Devices Inc., which has sued Intel over antitrust allegations. In a letter to Judge Joseph Farnan in the U.S. Federal District Court in Delaware, Santa Clara-based Intel (NASDAQ:INTC - News) said it plans no objections to the order. In September, a federal judge ruled that if Sunnyvale-based computer chip maker AMD (NYSE:AMD - News) wins the antitrust case filed in the U.S., it cannot receive damages for Intel's alleged monopolistic practices overseas. In June 2005 AMD launched the antitrust action against Intel, alleging its business was hurt by Intel's practice of offering rebates, discounts and other incentives to persuade PC makers to use chips from Intel instead of AMD. AMD said Intel has a monopoly that lets it charge higher prices. Intel, in turn, claimed that AMD had a reputation as unreliable supplier and didn't invest enough in its business.
Published December 28, 2006 by the Silicon Valley/San Jose Business Journal

Labels: AMD, INTC, Intel Corp.

Stocks that were moving substantially or trading heavily Thursday on the New York Stock Exchange and Nasdaq Stock Market:
NYSE
IBM Corp., down 23 cents at $96.97; Siemens AG, up $1.01 at $98.59.
Both companies were awarded a 10-year $9.3 billion contract from the German Federal Armed Forces. The deal calls for the two companies to modernize non-military information and communications technologies.
Alcoa Inc., unchanged at $30.02.
Morgan Stanley lowered its fourth-quarter estimates due to the strike at the aluminum producer's Cleveland Works facility. There are also concerns about the weak dollar's effect on the company's profit margins.
Citigroup Inc., down 53 cents at $55.88.
The biggest U.S. financial company moved lower on reports it might be interested in buying a stake in Chinese budget carrier Spring Airlines.
NASDAQ
Apple Computer Inc., down 65 cents at $80.87.
Federal prosecutors are examining the management of stock options that were allegedly falsified to maximize the profitability for executives. Chief Executive Steve Jobs is said to have received 7.5 million stock options in 2001 without proper board approval.
Openwave Systems Inc., up 70 cents at $9.52.
Investment group Harbinger Capital Partners plans to nominate two directors to the company's board, stepping up a proxy battle as the company attempts to buy back shares and cut operating costs.
Jupitermedia Corp., up 32 cents at $8.03.
The technology company said it plans to acquire JustTechJobs.com, though terms of the deal were not released.
Published by AP

Labels: AAPL, Alcoa, Apple Computer Inc., C, MS

Wall Street stalled Thursday after a battery of reports indicated the economy is stronger than expected and raised concerns that the Federal Reserve might be more aggressive about interest rates next year. There has been speculation in the market that Fed policymakers might be ready to cut interest rates because the economy appeared to be moderating on course. However, investors believed that better-than-expected reports that measured existing home sales, consumer sentiment, and manufacturing in the Midwest lessened the possibility of a cut. Moreover, the trio of reports suggested to some that central bankers -- who have left interest rates unchanged during their last four meetings -- might even have to implement a rate hike on further signs the economy is growing too fast. This caused a sell-off in bonds, and stifled a stock market surge that pushed the Dow Jones industrials past the 12,500 mark for the first time on Wednesday. Even with the prospect that a rate cut isn't in the offing, investors remain positive, analysts said. Still, volume was thin, typical for the week between Christmas and New Year, which means price swings can be exaggerated. The market's real response could come next week when most of Wall Street gets back from vacation. "You'd expect some kind of correction after these reports, and the fact we're not getting one shows Wall Street is pretty bullish," said Ryan Detrick, equity analyst at Schaeffer's Investment Research. "With the market going up, and not too many sellers out there, we could stay at these levels until we get back next week." According to preliminary calculations, the Dow Jones industrial average fell 9.05, or 0.07 percent, to 12,501.52, after reaching a new trading high of 12,529.88. That's slightly above Wednesday's record close of 12,510.57. Broader stock indicators slipped. The Standard & Poor's 500 index fell 2.11, or 0.15 percent, to 1,424.73, while the Nasdaq composite index fell 5.65, or 0.23 percent, to 2,425.57. Despite the dip during the session, major indexes are heading toward double-digit gains for the year. The Dow is now up 16.7 percent this year, while the Nasdaq has risen about 10 percent and the S&P 500 is up 14.1 percent. Bond yields have fallen to record lows in the past few months, but began to rebound on Wednesday after a better-than-expected government report on new home sales suggested the housing slump could be at the bottom of its decline. It was the first sign this week the economy might be expanding instead of moderating. The three economic reports on Thursday continued to push rates higher, with the yield on the benchmark 10-year Treasury note rising to 4.69 percent from 4.65 percent late Wednesday. Oil prices rose after the Department of Energy reported in its weekly inventory report that U.S. crude supplies dropped by 8 million barrels last week. The rise was limited, though, by rising gasoline and heating oil supplies and lagging demand for heating fuels due to mild weather. A barrel of light sweet crude rose 19 cents to $60.53 on the New York Mercantile Exchange. Meanwhile, the dollar was lower against other major currencies, while gold prices extended their rally. Among the reports released early in the session, the Conference Board's index of consumer confidence climbed to 109 this month -- the highest since April. Economists expected a decline to 102. Bolstering hopes the housing slump has bottomed, the National Association of Realtors reported sales of previously owned homes gained 0.6 percent to a 6.28 million annual rate in November -- besting economist projections for a decline. Paul Desmond, president of Lowry's Research Reports, said he's not worried about any short-term corrections for stocks. He believes the big picture outlook for stocks is good, and that buyers will not run out of supply anytime soon. "We have all the major measurements of investor demand being at new highs, and more importantly there is no evidence of any significant amount of selling going on," he said. "We think the markets appear to be heading substantially higher next year." With little in the way of corporate news, Apple Computer Inc. fell amid reports of a federal probe into the possible forgery of documents to boost executives' profit. Chief Executive Steve Jobs is said to have received 7.5 million stock options in 2001 without proper board approval. Its stock fell 65 cents to $80.87. International Business Machines Corp. and Siemens AG won a 10-year $9.3 billion contract from the German Federal Armed Forces. The deal calls for the two companies to modernize non-military information and communications technologies. IBM fell 23 cents to $96.97, while Siemens rose $1.01 to $98.59.
Alcoa Inc. finished unchanged at $30.02 after Morgan Stanley lowered its fourth-quarter estimates due to the strike at the aluminum producer's Cleveland Works facility. There are also concerns about the weak dollar's effect on the company's profit margins. Declining issues outnumbered advancers by a razor thin margin on the New York Stock Exchange, where volume came to an extremely light 903.3 million shares, compared to 972 million shares on Wednesday. The Russell 2000 index of smaller companies was down 3.25, or 0.41 percent, at 794.48. Overseas, Japan's Nikkei stock average closed up 0.01 percent. At the close, Britain's FTSE 100 was down 0.07 percent, Germany's DAX index was up 0.04 percent, and France's CAC-40 was down 0.12 percent.
Published by AP

Apple Computer (NASDAQ:AAPL - News) shares slipped on renewed concerns about the company's options granting practices. U.K. newspaper The Financial Times reported that Chief Executive Steve Jobs was handed 7.5 million stock options in 2001 without the required authorization from the board. The FT report said records that purported to show a full board meeting had taken place to authorize the options were later falsified. The un-sourced report didn't say who falsified the report. Jobs later surrendered his options before they were exercised, implying that he did not gain any direct benefit from them, it added.
Security Bank Corp. (NASDAQ:SBKC - News) said it now sees operating earnings of $1.38 to $1.40 per share in 2006, below its previous forecast for a profit of $1.42 to $1.47 per share. The Macon, Ga., bank holding company cited recent deterioration in certain and acquisition development real estate loans for the shortfall. The company expects operating earnings of $6 million to $6.4 million, or 31 to 33 cents a share, for the fourth quarter. It added that it doesn't anticipate similar problems to become more widespread in 2007 and that the losses on these credits will be manageable "provided there is no further deterioration in the economy."
Sento (NASDAQ:SNTO - News) swung to a second-quarter net loss attributable to stockholders of 65 cents a share from earnings of 8 cents in the year-earlier period. The Salt Lake City provider of call-center services cited higher costs of sales after the termination of a client program.
Star Gas Partners (NYSE:SGU - News)said it's restating a net $200,000 from continuing operations for fiscal years 2004 through 2007, due to a previously announced assessment of derivative transaction accounting. Inter-period adjustments will be substantial the move will have no impact on liquidity or cash flows. The home-heating-oil distributor said it's committed to its operational turnaround taking place. It cannot predict when the audit of the restated financial statements by KPMG will be completed or when the partnership's fiscal 2006 Securities and Exchange Commission Form 10-K will be filed.
Tapestry Pharmaceuticals Inc. (NASDAQ:TPPH - News) named Donald Picker president. Picker was most recently executive vice president of R&D at Callisto Pharmaceuticals.
Threshold Pharma (NASDAQ:THLD - News) reported positive Phase II clinical-trial results for glufosfamide combined with gemcitabine to treat advanced pancreatic cancer. The cancer-treatments developer said 21% of patients in the clinical trial had a partial response.
By MarketWatch

Labels: AAPL, SBKC, SGU, SNTO, THLD, TPPH

AsiaInfo Holdings (NASDAQ:ASIA - News) shares gained after the Beijing-based software company said it has recently signed contracts to upgrade the business support systems of China Telecom's Henan, Shanxi, Tianjin and Heilongjiang subsidiaries. Financial terms of the contracts were not disclosed.
Champion Industries Inc. (NASDAQ:CHMP - News) reported fiscal fourth-quarter earnings more than tripled to 20 cents a share from 6 cents in the year-earlier period. Revenue in the three months ended Oct. 31 rose 6.6% to $37 million.
First Cash Financial Services Inc. (NASDAQ:FCFS - News) will replace Republic Bancorp Inc. (NASDAQ:RBNC - News) in the Standard & Poor's SmallCap 600 index after trading closes on Friday. Citizens Banking Corp. (NASDAQ:CBCF - News) is acquiring Republic in a deal expected to close on or about that date.
Openwave Systems (NASDAQ:OPWV - News) shares advanced after Harbinger Capital Partners announced late Wednesday it plans to nominate two directors, James Zucco and Andrew Breen, to the Redwood City, Calif.-based software company's board. The company's shareholders will vote on the nominees at Openwave's annual meeting on Jan. 17. Harbinger said Zucco and Breen, if elected, would recommend phasing-out non-performing product lines, reducing quarterly operating expenses to roughly $50 million and launching a "significant" share repurchase program.
Rick's Cabaret International (NASDAQ:RICK - News) shares surged after the Houston-based company reported fiscal 2006 net earnings of $1.75 million, or 35 cents a share. In fiscal 2005, the nightclub operator posted a net loss of $215,148, or 5 cents a share. Revenue in the year ended Sept. 30 rose to $24.5 million from $14.8 million. "Our growth program is on track and we are looking forward to another strong year in 2007 from our existing clubs and the four acquisitions we have made recently," said Eric Langan, president and chief executive, in a statement. "We will also continue to look at additional acquisitions that fit our business model and can be quickly accretive."
SciClone Pharmaceuticals Inc. (NASDAQ:SCLN - News)and its European partner, Sigma-Tau, said they've completed patient enrollment for the Phase III clinical trial evaluating Zadaxin in combination with pegylated interferon alpha and ribavirin to treat patients with the hepatitis C virus. The trial is being conducted by Sigma-Tau in Europe and has enrolled 553 patients.
By MarketWatch

Labels: ASIA, CBFC, CHMP, FCFS, OPWV, RBNC, RICK, SCLN

The ever-widening stock option scandal that encompasses over 190 US companies has taken a serious turn for Apple Computer. The Financial Times reported Chief Executive Officer Steve Jobs was given stock options in 2001 without authorization of the board. The news sent a shockwave through shares. The stock dropped as much as 6% on Wednesday after news surfaced that Jobs had hired a lawyer to represent him in federal inquiries and that some officials may have falsified documents.
The FT report stated records purported to show that a full board meeting conducted to authorize the options was later falsified. The story did not implicate any person or persons who allegedly falsified the report. Jobs later surrendered his options before they were exercised, which implies he did not gain any benefit from the options. The SEC is currently investigating the evidence, according to the article. Jobs owns roughly 5.43 mln shares of Apple, or 0.6% of the company, according to filings. His stake is worth $442 mln as of Wednesday's closing price.
The maker of the iPod began an internal investigation of its stock option grants, which did include one such grant to Jobs, back in June. In October, Apple stated it had found 15 misdated grants from 1997 to 2002. Jobs was aware in some instances that he didn't benefit, according to the company, and he apologized to shareholders. At the time, Apple stated two former unnamed executives raised "serious concerns." The Recorder, a San Francisco-based legal newspaper, first reported Wednesday on the discovery of possibly falsified documents that were unearthed during Apple's internal investigation and passed on to the US Attorney's office.
These charges are a serious matter and create a great deal of uncertainty regarding Apple's future. Jobs is a technological visionary and solely responsible for Apple's resurgence over the past few years. The implication of Jobs will continue to overshadow channel checks that suggest Apple had a very strong holiday sales season for iPods and Macs. For our part, we argued a bull case for Apple on July 14th, during the stock's near-term low. Since then, shares have gained over 60%. Given these returns, as well as the upcoming seasonal weakness in the first quarter and the seriousness of the options matter, we would be trimming positions at this time.
--Kimberly DuBord, Briefing.com

Labels: AAPL, Apple Computer Inc.

World's largest computer-services company International Business Machines Corp. (IBM) and Siemens (SI) said Thursday that they jointly won a $9.3 billion, 10-year contract to manage and upgrade the non-military IT systems of Germany's armed forces. U.S. computer services group IBM will receive a 40% share of the deal, with SI getting the rest. The companies are expected to sign on the dotted line for the deal before the end of the year.
Under the contract, the two companies will co-manage the project. IBM will modernize data centers, while SI will be in charge of PCs, phone systems and servers at around 1,500 locations.
In October, IBM beat analysts' expectations for earnings per share with its third-quarter earnings, thanks largely to strength in software and hardware. Its service segment, however, came in a bit light. With the new contract helping in this area, a strong seasonal bias in the fourth quarter, and the fact that the stock is trading well under the industry average at 16.4x trailing 12-month earnings, IBM stock continues to represent an attractive risk/reward opportunity.
--Christine Marie Nielsen, Briefing.com

Labels: IBM, International Business Machines Corp.

Don't Buy and Hold
In spite of the fact that Cramer was a money manager "with a terrific track record" he admitted to having made every mistake he describes in his book, Jim Cramer's Real Money, Sane Investing in an Insane World, as well as every faux pas mentioned in his new publication, Jim Cramer's Mad Money: Watch TV, Get Rich. Cramer identifies the single worst and most common mistake as adopting a "buy and hold" strategy, which is disastrous because "it's just not true that your stock will necessarily bounce back." Just hanging onto a stock might have worked 30 or 40 years ago when "taxes were high and commissions were even higher," but in today's world, investors need to do homework on their stocks, and investors who don't have the time to research their investments on a weekly basis should go into mutual funds.Don't Dwell on Regrets
Although Cramer says he is the worst offender when it comes to this vice, he urges investors not to waste precious time grieving over past mistakes, since one "cannot afford to get thrown off their game." Instead Cramer emphasizes the importance of going forward and not losing confidence.
Tips are for Waiters not for Traders
"You have to discipline yourself so that you never, ever take a tip seriously," Cramer said, and he discussed the non-existence of real stock tips. For instance, if someone would say that Nokia is about to buy Research in Motion, the only way he would know is if he were an insider, and taking a tip from an insider is illegal. Cramer emphasized the importance of avoiding temptation in such a case: "Having the Securities and Exchange Commission investigate you is pure hell even if you haven't done anything wrong," he said. "Imagine how bad it would be if you were actually guilty of something." However, A non-insider who would tell an investor about a potential, unpublicized merger would have no basis for knowing, and should also be ignored: "If you get a tip, it's either illegal, incorrect or straight-up manipulative."
Diversify, Diversify
"I like to think that I'm universally loved, but people really tend to hate me when one sector is en fuego and I tell them to take some money out of it and spread it around because you can't keep all your eggs in one basket," Cramer said. However, once the "hot" sector falls out of favor, people thank Cramer for telling them to stay diversified. Cramer warns investors not to have more than 20% of their money invested in a single sector. "You absolutely must stay diversified, and this rule can't be bent, broken or spindled."
Don't Buy an Entire Postion at Once
"The single most arrogant thing you can do as an investor is buy your whole position in a stock at once," Cramer said. Investors who buy incrementally make more money and do not have the regret of having jumped hastily into a stock. Cramer suggests looking for opportunities to buy gradually.
Published By SeekingAlpha

Labels: Jim Cramer, Mad Money

Stocks opened lower Thursday ahead of economic news and after shares of Apple Computer (AAPL) came under pressure amid concerns about the company’s past stock option granting practices. Shortly after the opening bell on Wall Street, the Dow Jones Industrial Average ($INDU) had lost six points. The NASDAQ ($COMPQ) was down 4.5.
Apple Computer is off $1.02 to $80.50 after the Financial Times reported yesterday that Chief Executive Officer Steve Jobs was granted 7.5 million options during 2001 without the required authorization of the company’s board. The report, which cited people familiar with the matter, also said that the SEC is investigating the allegations.
Meanwhile, Microsoft (MSFT) is trading down on news it is looking into a flaw in its new Vista operating system. The bug makes it possible to shut down a web site or gain greater access privileges. MSFT is down 11 cents to $29.91. Citigroup is the Dow’s biggest loser after the Wall Street Journal reported that the financial services giant is “in talks to buy a stake in low-cost Chinese airline Spring Airlines.”Economic data will come into focus a bit later this morning. November, existing home sales will be worth watching after yesterday’s new home sales report came in better than expected. The numbers are due out at 10:00 a.m. Eastern time and expected to show a decline of sales—to an annual rate of 6.15 million from 6.24 million in October. The Chicago’s Purchasing Manager’s Index [PMI] and Consumer Confidence are due out at the same time. Economists expect the PMI to show an increase to 52 in December, up from 49.9 the month before. The Consumer Confidence index is expected to edge down to 102 in December, compared to 102.9 in the previous month.
In other markets, crude oil prices are up 25 cents to $60.59 a barrel ahead of weekly inventory data. The EIA report is released one day later than usual due to the holiday earlier this week. Gold is higher, up $7.00 to $637.20 an ounce. After being sold off sharply yesterday, the ten-year Treasury not is up two ticks and its yield sits at 4.65%, compared to 4.6% two days ago. The buck is little changed ahead of the day’s economic news. Indeed, the day’s economic data does hold market moving potential and it wouldn’t be surprising to see a bit more volatility today following the news. Profit taking following the Dow’s 100-point run past 12,500 yesterday might also affect trading. In addition, with many players away on holiday, thin trading might exacerbate the volatility and help the major averages make another big point move on Thursday.
By Frederic Ruffy

Labels: AAPL, C, MSFT

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
NYMEX Holdings Jan 135 Calls (NYSE:NMX - News) . PowerRating not available due to less than 200-day trading history.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Intuitive Surgical Jan 95 Puts (NASDAQ:ISRG - News). ISRG's PowerRating is 5.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Sears Holdings Jan 175 Calls (NASDAQ:SHLD - News). SHLD's PowerRating is 6.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
Harman International Jan 100 Puts (NYSE:HAR - News). HAR's PowerRating is 6.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Veritas (NYSE:VTS - News). VTS' PowerRating is 5.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggestsan extraordinarily negative earnings report, or other news which may negatively affect the stock.
NeoPharm Inc. (NASDAQ:NEOL - News). NEOL's PowerRating is 5.
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
Federated Department Stores (NYSE:FD - News). FD's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: FD, HAR, ISRG, NEOL, NMX, SHLD, stock options, VTS

Here are 7 stocks to watch for today. This list comes directly from the TradingMarkets Stocks Indicators page.
Stocks Ready to Surge: These are the stocks that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals.
Cisco Systems (NASDAQ:CSCO - News) and J.C. Penney (NYSE:JCP - News). CSCO's PowerRating is 5, and JCP's PowerRating is 6.
Low-Priced Stocks Ready to Surge: These are the stocks under $10/share that today made new 10-day lows that are still in an uptrend as they are trading above their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term upside reversals. Please note: All stocks carry risk and low-priced stocks usually come with even more risk. Always use caution.
Cincinnati Bell (NYSE:CBB - News). CBB's PowerRating is 6.
Pullbacks from Highs: Most successful momentum-based traders and money managers like to buy strong stocks after they pull back. TradingMarkets.com uses a proprietary mathematical model to identify up to 30 (in weak or choppy markets there will be fewer) of the strongest stocks that have pulled back from recent highs. These stocks should be considered potential candidates to resume their longer-term up trends.
Daktronics (NASDAQ:DAKT - News). DAKT's PowerRating is 5.
Trading Where the Action Is: This list contains the most volatile stocks over the past 50 trading days. These stocks are only for the most aggressive traders who are willing to assume a high degree of risk in order to capture larger gains.
International Asset Holding (NASDAQ:IAAC - News). IAAC's PowerRating is 9.
Stocks Ready to Drop: These are the stocks that today made new 10-day highs that are still in an downtrend as they are trading below their 200-day moving average. They are sorted in rank according to how over-extended they are vs. their 10-day moving average. For example, the top ranked stock is trading the furthest distance from its 10-day moving average on a percentage basis. Historically, these stocks on average have had larger than normal short-term downside reversals.
Labranche & Co (NYSE:LAB - News). LAB's PowerRating is 3.
Explosion List: An inherent feature of all markets is that periods of lower-than-normal volatility are usually followed by periods of higher volatility. These stocks are trading at one-third or less of their normal volatility and therefore have a high likelihood of exploding within the next few trading days.
Vertex Pharmaceuticals (NASDAQ:VRTX - News). VRTX's PowerRating is 7.
PowerRatings are courtesy of PowerRatings.net

Labels: CBB, CSCO, DAKT, Hot Stocks, IAAC, JCP, LAB, VRTX

Shares in second-largest health insurer UnitedHealth Group Inc. (UNH) were down about 2% in early trade Wednesday after it became known the company had received a formal order of investigation from the Securities and Exchange Commission related to the company's stock option practices.
In spring, regulators launched a preliminary investigation into the matter. UNH CEO, Dr. William McGuire was determined to have approximately $1.5 billion of unrealized gains on stock options- many of which were granted at or near quarterly low points in the company's stock price. That company executive later resigned.
UNH's own internal review found errors in its stock options accounting that would cost up to $1.7 billion to correct. However, in October, UNH made a solid showing with its quarterly earnings, indicating that while near-term operational risk remained, the company had made some strides to get back on track.
The Securities and Exchange Commission late last week tried to cut through some of the confusion that has arisen with the way companies disclose grants of stock option awards to executives, saying on its web site that how companies disclose stock option awards will now conform more closely to U.S. Financial Accounting Standards Board guidelines. This requires recognition of the costs of equity awards over the period in which an employee works for the award.
Minnetonka, Minn.-based UNH said in a filing to the SEC that it intends to cooperate with the SEC's investigation.
--Christine Marie Nielsen, Briefing.com

Labels: UNH, Unitedhealth Group Inc.

With little news to speak of this holiday week, a meeting in Japan between Ford and Toyota Motors (TM) continues to feed the rumor mill, sparking a slew of speculations. Toyota Motor's Chairman Fujio Cho, a lifetime employee of the second largest automaker, met with Ford's new CEO Alan Mulally allegedly to discuss increased cooperation on technology.
The Nihon Keizi newspaper in Japan reported Ford may be interested in Toyota's hybrid vehicle technology and manufacturing methods. Toyota would only confirm the two executives had a courtesy call, declining to comment on any specifics of the meeting. Toyota was the first carmaker to introduce the gasoline-electric vehicle. According to the article, Ford uses hybrid vehicle parts from suppliers affiliated with the Japanese automaker, and therefore it may be seeking a technological tie-up with the parent company.
Ford would only confirm Mulally meet with Toyota's "leadership," stating it is routine for management to meet with other carmakers on a "variety of topics." The meeting is, however, being viewed by some as a first step in a potential partnership. With US automakers under the spotlight, market participants are anxious to spot signs of a potential change in strategy given challenging industry fundamentals. A potential partnership does have political implications, possibly easing potential trade frictions between the US and Japan.
In the first nine months of the year, Toyota's sales grew 12.5%, compared to an 8.2% decline for General Motors (GM) and a 7.5% drop for Ford. Both Ford and GM plan to cut production next year, eliminating thousands of jobs. The Detroit-based General Motors may lose its title as world's largest automaker to Toyota next year. Toyota bypassed Ford in 2003. One meeting doth not make a union, but tell that to traders sending F shares higher this morning.
--Kimberly DuBord, Briefing.com

Labels: F, Ford Motor co.

Only two trading days remain in the year and, in the absence of any market nosedives between now and Friday, bulls will probably be pleased with the stock market’s performance in 2006. The S&P 500 Index ($SPX) has added a respectable 14.3%, the Dow Jones Industrial Average ($INDU) is up 16.74% to record highs, and the NASDAQ ($COMPQ) is up 10.24%.The gains aren’t limited to the large cap stocks of the Dow, S&P 500, or NASDAQ. The Russell 2000 Small Cap Index ($RUT) gained 18.5% and the S&P MidCap Index ($MID) rose more than 10%. In addition, nearly every sector of the market moved higher as well. Steel stocks were among the best gainers. Investor appetite for steel companies rose amid merger hopes and better pricing for the metal. So, despite concerns about slowing de