No fear of small countries with small markets

What's the better bet? The paper of Spain or the paper of UPS, which just raised its dividend?

By Jim Cramer Feb 5, 2010 7:58AM
Jim Cramer


By Jim Cramer, TheStreet


The companies are stronger than the countries. Plain and simple. I will take the common stock of Kinder Morgan Energy Partners (KMP) or Enterprise Products Partners (EPD) over the paper of Greece or Portugal any day of the week. Which is really the problem. Who needs the headache of the stuff?


Not only that, but a lot of our dividends are going higher after the companies turned out to be doing better than expected. The dividend boosts are running hot and heavy. The paper of Spain or the paper of United Parcel Service (UPS), which boosted its dividend Thursday? Is there really an issue?


I am a big believer in contagion when the contagion can affect demand, but as Doug Kass spells out this morning using some pretty smart data from Mike O'Rourke, we are dealing with small countries and small markets. In the 1996-1997 fiascos, our issues involved Russia, which had just raised a gigantic amount of capital, and Asia, which was taking in a huge amount of tech.


I am not minimizing anything. I have said repeatedly that 2010 will not be like 2009. The past year pretty much represented a remarkable turn everywhere on borrowed money. I am simply saying that the common stocks of so many companies represented great buys after they got hammered, and I am curiously wondering with a Chevron (CVX) yielding 4% and an HCP (HCP) giving you 6% and change -- one of my faves -- whether we should use their pain as our gain.


The usual caveat: When I see the run in copper, for example, and I know it is driven by hedge funds, I want to short Freeport-McMoRan (FCX), a company without a dividend that just ran fivefold, and I don't want to be in a steel stock like U.S. Steel (X), which had a similar move.


Bing: More on Spain Debt


But companies like Inergy (NRGY) are beginning to be bought.


AT&T (T) and Verizon (VZ)? Reflecting the worst again. Pretty compelling. (Post continues after video below)


You can stay away from the non-dividend plays, or you can go after the companies that just reported superior earnings with multiyear visibility, a la Boeing (BA), or the drillers, all of which signaled better times ahead and bet that Greece, Spain, Portugal and whoever is next -- Italy? -- won't hurt you.


What will hurt you is your fellow shareholder, the one who owns copper on margin, the one who has been playing oil in big tankers.


They are your enemy, not these tiny countries that are smaller than Exxon (XOM).


At the time of publication, Cramer was long Chevron.


Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.


Related Articles


Five Dumbest Things on Wall Street: Feb. 5


Jobs report is a Rorschach test


Boring is best: Under the Radar

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

120 rated 1
268 rated 2
439 rated 3
709 rated 4
641 rated 5
609 rated 6
640 rated 7
516 rated 8
272 rated 9
152 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.