Mad Money Recap: Business Cycles

Posted by Blain Reinkensmeyer
July 11, 2006 at 10:10 pm

***Written By: Blain Reinkensmeyer Stock Forum ID: StockTrading101****

Jim Cramer had a pretty good show I thought today, going into some insight of the business cycle. His opening comments basically told us that we could not focus solely on earnings, and that having insight into the business cycle is important. One example was Walgreen (WAG), of which Jim told us their business cycle mattered much more than earnings. The stock went down regardless of its good numbers it had in March. The same happened to CVS (CVS). But, after the May 11th Fed tightening, the cycle changed, and it performed well.

Jim then went into how we are entering the beginning of an economic downturn. Sectors are more important during these times than earnings. Freeport-McMoRan Copper & Gold (FCX) is already up some 50%+ this year, and its best quarter is apparently still yet to come. But regardless of the good news to come, Jim tells us to walk away and be done with it.

We are too be catious of Apple (AAPL), as it is a “defenseless” stock. Ultimately Jim tells us the stock will bottom though. “Apple is turning into applesauce, and I can’t have that happen to you.”

Towards the end of the show Jim had CEO Yvonne Pierre, CEO of Dynamic Materials (BOOM) on the show.

Lastly, the lightning round had Cramer more bullish than bearish overall. Some bullish picks were Ashland (ASH), Lifecell (LIFC), News Corp. (NWS), Starbucks (SBUX), and Whole Foods (WFMI). Bearish picks included Salesforce.com (CRM), Alcoa (AA), and Marvel Entertainment (MVL).

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