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Sunday, January 25, 2009

Jim Cramer Lighting Round Stock Picks

Mad Money Recap

Segment 1: The Obama Accountability Index
Cramer said that things were much better today than they were yesterday with IBM (IBM), Johnson & Johnson (JNJ), Abbott Labs (ABT), Forest Labs (FRX), Northern Trust (NTRS), and PNC (PNC) all reporting good earnings today, Wal-Mart (WMT) reporting good numbers, mineral plays announcing that they are cutting back on production, which is good for stocks like Freeport McMoran (FCX), and Apple (AAPL) and Research in Motion (RIMM) reporting good sales as well. Cramer said that the high yielding stocks are back at the lows that they bounced off of in November, and that they will bounce back again.
However, said many of the financials are still weighing us down, like Citigroup (C) and Bank of America (BAC). As long as they don't go under, the stock indexes should be OK.
Cramer thinks Obama needs to save the good banks like J.P. Morgan (JPM) and Wells Fargo (WFC) from the bad ones like C and BAC. He added that the bonds and preferred stock of C and BAC need to be preserved, because if they go down, investors will be even more afraid of the financials. To track Obama's performance, Cramer created an index of 6 Dow stocks, made up of Bank of America (BAC), Citigroup (C), Caterpillar (CAT), General Electric (GE), General Motors (GM), and J.P. Morgan (JPM). It will start at a value of 100 as of the closing price at the end of today, and all the stocks have an equal weight. They were picked because it includes good and bad banks, a test of the infrastructure stimulus, the auto sector, and a large conglomerate that represents a large section of the overall economy.

Segment 2: Dow All Stars Review
In the first week of 2009, Cramer recommended Verizon (VZ), Caterpillar (CAT), Hewlett Packard (HPQ), Johnson & Johnson (JNJ) and Home Depot (HD), and he wanted to review how they did after the big drop in the market recently. His group is down 3%, which isn't great, but is better than the Dow and S&P 500, which are down 8% and 9% respectively. He thinks this is good news because they should go up more than the index when times get better, plus they all have a yield over 3%, except HP. He still likes HP because they have great management, recently made a smart acquisition of EDS, and is beating their printer competition. Cramer is still bullish on Verizon because of its high yield, good CEO, and strong Blackberry Storm and FiOS sales. He also still likes J&J because it is a good defensive play and a strong balance sheet. Cramer is bullish on CAT because of its accidentially high yield and because it is in position to benefit from the U.S. and Chinese infrastructure stimulus plans. He is also still bullish on Home Depot because he thinks housing will bottom in about 5 months, and people will begin making home improvements then.

Segment 3: Interview with Google (GOOG) CEO Eric Schmidt
Cramer talked to Schmidt about his experience on Obama's transition team, and his ideas to reduce unemployment. He didn't make any stock picks in this segment.

Segment 4: Lightning Round!
Zions Bancorp (ZION): Cramer won't recommend any regional bank right now, so he gave it a "Don't buy".
CME Group (CME): Cramer would rather own NYSE Euronext (NYX) because it has a higher yield, or Ameritrade (AMTD) or Charles Schwab (SCHW).
Electronic Arts (ERTS): Cramer is bearish because it is not cheap right now, and the company doesn't have any momentum.
Barclays (BCS): Cramer is bearish because he thinks it is in serious trouble.
Huntsman (HUN): Cramer thinks it is too risky and recommended PPG (PPG) instead.
CBS (CBS): Cramer is bearish because media companies have not been doing well, and the ownership structure of CBS is unusual.

Segment 5: Quiz Cramer
Cramer had a live audience for the show today, and he took general questions but didn't make any stock picks.
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