Von der Leyen elogia proposta de Trump de dar garantias de segurança à Ucrânia

[Ulisses Pereira]

"'Loved' Stocks Have Some Room"

By Jim Cramer
RealMoney.com Columnist
3/10/2008 9:38 AM EDT



"The real battleground out there is about the "overowned" and "loved" and whether it is time to leave them.




The overowned groups -- natural gas, agricultural, coal, rails and oil and oil service -- aren't cheap, are overextended and are places people are hiding in.

Those are all awful qualities.

Against them, they have earnings, which rely on worldwide growth instead of domestic growth, and multiple years of positives, provided that ethanol continues to be used and oil doesn't get found in great abundance.

So the question is, are the ag/coal/oil/gold/infra group the Apple (AAPL - commentary - Cramer's Take - Rating) and Google (GOOG - commentary - Cramer's Take - Rating) from last year? There are supply problems on every one of these -- unlike Apple and Google -- and the demand side is not slowing.

Of course, when things look really bad, the first thing you want to do is short these companies because they are up, and up a lot. Their charts are truly overextended on a multiple-year basis.

You can take them down easily and quickly with a combination of selling ETFs selling and buying puts.

You can trash anything that way if you want to.

Here's the way I think it will play out. I believe you will have massive corrections of this group over time. MASSIVE. But I think EVERYONE knows that. Nobody really "believes" that these stocks are invulnerable.

It is why I think that you need to own them with calls if you have a chance and when they run, you sell common against them.

That's usually not good enough for all of you.

Nobody likes it when anybody hedges. But if you ask me, this market is divided into two groups: those stocks that go down and then go up again and those stocks that go down and then don't go up.

The "loved" complex is the former; the "hated" complex -- which literally represents the vast, vast majority of stocks that rely on financing and U.S. domestic growth -- is the latter.

I do not understand the case for the latter.

At least I understand the case for the former. The estimates are too low.

Now, one other consideration. You have to understand that short-selling hedge fund managers simply cannot stand momentum names and try to break them with everything they have. In this environment, stocks are made to be broken.

In other words, to some degree, the whole issue is moot: In this environment, nothing goes higher until we get really oversold, as we are now. Then this complex goes higher. If you bought it down here, you can make some trading money.

When it rallies, you leave.

I guess, in this environment, that makes me bullish on the group.

This is a market where the buyers and sellers of stocks are more important than the stocks themselves. I don't like the buyers of these stocks and can't root for them. They are the Buzz and Batch of this era. But I don't like what else is out there either.

But at least these stocks HAVE buyers. Which is more than any other stocks have.

At the time of publication, Cramer had no positions in the stocks mentioned. "

(in www.realmoney.com)