“Mad Money” Jim Cramer Recap

Posted by Blain Reinkensmeyer
June 14, 2006 at 7:20 pm

Jim told us today that the Ethanol fad has come to an end, so get out. The first sign to sell according to our investing guru buddy was that Verasun Energy (VSE) went public today; I guess that isn’t a good thing. According to Jim supply will become too great and there will not be enough demand to carry it. Jim has recommended Ethanol companies on the show before including Archer Daniels Midland (ADM), The Andersons (ANDE), and MGP Ingredients (MGPI). The bottom line was, “don’t wait longer than a week to sell.”

Jim then went into talking about margins of debt as a whole for the market and how the more margin that is being used to buy stock is a bad sign overall. To Jim margin debt is the single most important indicator of the market. Currently the margin debt of the NYSE is $50 billion greater than what it was in 2005; not good. He then advised any viewers out on margin to get out.

This is pretty random for me but I actually have one of the lists of stocks that a caller called in with for Jim’s game, “Am I Diversified?” The stocks the caller owns are IBM (IBM), Starbucks (SBUX), TD Ameritrade (AMTD), Capstone Turbine (CPST), and Dynergy (DYN). Jim told the guy to sell his Capstone and buy a health care stock.

Finally with the lightning round some of the stocks I caught that Jim was bullish on were Yahoo! (YHOO) and Broadcom (BRCM). Jim was bearish on Tellabs (TLAB), Energy Conversion Devices (ENER) which was actually interesting to hear his opinion here. He said the company is a leader in energy converstion and is a good company but just not one to own right now. Waste Management (WMI) was the last call if I remember correctly and Jim was bearish on this stock as well.

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