Industrials can't catch a break

Companies like Caterpillar and Honeywell have yet to see a slowdown in demand, yet their stocks are like hot potatoes that no one wants to hold on to.

By Jim Cramer Oct 3, 2011 8:57AM

the streetHere's a piece I don't want to write. Industrials seem determined to replay 2008. It doesn't matter that things are much better for them. It doesn't matter that there is ample credit around the world, something that crushed them the last time around.

 

It doesn't even matter that none, not one, of the industrial stocks I am close to -- Honeywell (HON), United Technologies (UTX), Cummins (CMI) or Caterpillar (CAT) -- have seen a slowdown. They all get whacked.

 

This endless decline is playing havoc with the performance of anyone who is trying to keep pace with the averages. Owning them has been anathema to making money.

 

At the same time, the most overvalued and overstretched players are the recession stocks. But many of those have yield protection, and all are levered to the decline in commodity costs. If it weren't for the strong dollar, people would be raising numbers like crazy.

 

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I see no end to the decline of these stocks if Europe stays weak, China slows down and we bump along in a near-recession economy.

 

I think these declines are pure panic. But there seems to be a hot-potato effect going on here. No one is willing to own them through this period, somewhat similar to the mineral and oil stocks they now seem to correlate perfectly with.

 

Oddly, retailers, so geared to "strapped" consumers, have held up great, while industrials, which are levered to worldwide growth but especially emerging-growth trends, just can't stop plummeting.

 

Bottom-fishing has become a huge sucker's game, even for those companies that are seeing strong demand. We got a great channel check out of Caterpillar on Friday morning, and no one cared at all.

 

Be careful with this group. It can't bottom until the numbers get cut or we get to 2008 levels and you will have to buy them no matter what.

Either way, the bottom does not seem to be at hand.

 

At the time of publication, Cramer was long CMI.


jim cramer
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for his charitable trust.

7Comments
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Welcome to the decline of the stock market caused by more and more baby boomers retiring and taking $50,000 out of the stock market a year instead of paying in $5,000 a year. They were to be replaced by 2/3 of a worker but in this economy they are being replaced by 1/3 of a worker making minimum wage and not contributing anything into the stock market. Also add unemployed people raiding their retirement funds and state and local governments not putting in money and raiding their pension funds. 

This endless decline is playing havoc with the performance of anyone who is trying to keep pace with the averages. Owning them has been anathema to making money.
Oct 3, 2011 6:47PM
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jimmy your going to buy back Orcl @25.06 , What is that jimmy  ,  what is that .Jimmy I use  to sell on the news , jimmy  you know that old saying, that has been around even before you were born, sell on the news ,  I bought orcl @ 9.10 a few years ago. jimmy your a killjoy ., your in nomans land,

good bad or ugly    , your insight is poop     ,.   your just waving a flag with a bullet proff vest . Jimmy jimmy jimmy    , I don't think I will buy your next book , pull a rabbit out of your hat  , dancing boy.

Oct 3, 2011 10:19AM
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Jimmy: Can't never could do anything . What happened to the optomist ? What happened to if there is a bull out there you'll try to find it .  What happened to stop losses are for wimps . Jimmy your like a fiddle player singing sad songs these day . Remember when your dead buddy Mark called the bottom , call it Jimmy , let that bald head shine down upon Cramerica , I am sick of SDS, and want the bear to hibernate, its time.   
Oct 3, 2011 3:35PM
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cramer ,

i have tried to educate you..you can't beat the averages with your "rigor" and puny yield strategy

the SDS is still the play here that is KILLING the averages...i am waiting for

you to recommend it as that will be my indicator on when to sell and go long

Oct 3, 2011 11:45AM
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Middle class working people have been getting crushed for a long time. Wages have failed to keep up with cost so many are forced to only spend on necessities. Until wage earners receive meaningful raises growth will be muted. Corporations have a lot of cash on their balance sheets but see little reason to invest it with demand weak. Politicians will spend billions trying to get elected and then do nothing afterwards. Citizens deserve better but have very little clout to change big issue matters. Buy American and support our Troops.
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THEY ARE ALL BANKRUPT AND YOU WILL HAVE NOTHING REMAINING IN YOUR RETIREMENT ACCOUNT!  SELL, GET-OUT AND DON'T LOOK BACK!   ROYAL AHOLD(BAKED GOODS), PARMALAT(DAIRIES), GENERAL MOTORS(2009 EMERGED 2010), HVIDE MARINE(1999), POLAROID(2001),CIRCUIT CITY, BANKUNITED FINANCIAL CORPORATION, EXTENDED STAY HOTELS, BARNETT BANK, SOUTHEAST BANKING CORPORATION, EASTERN FINANCIAL CREDIT UNION, GENERAL GROWTH PROPERTIES, WINN-DIXIE(2005), K-MART(2002), ASIA PULP & PAPER, WASHINGTON MUTUAL,PILGRIM'S PRIDE CORPORATION, NORTEL NETWORKS, EDDIE BAUER(APPAREL), GATEWAY(2007), ATARI, ADVANCED DIGITAL INFORMATION CORPORATION, WORLDCOMM(2002), ENRON(2001), NCR, LEHMAN BROTHERS, SEGA GAMEWORKS, BEAR STEARNS,360 NETWORKS, MCCLEOD USA, CONTROL DATA CORPORATION, AMDAHL, CALCOMP, WANG LABORATORIES, DATA GENERAL, BETHLEHEM STEEL CORPORATION, NATIONAL STEEL CORPORATION, RITZ CAMERA, LYONDELLCHEMICAL, ALOHA AIRLINES, INDYMAC, SHARPER IMAGE, FLEETWOOD ENTERPRISES, ADELPHI COMMUNICATIONS, SIX FLAGS THEME PARKS INC. ., ATLAS AIR CARGO(EMERGED 7/2004), HOLSUM BAKERY, INTERSTATE BAKERY CORPORATION(9/2004), DELPHI AUTO PARTS, LEAR CORPORATION, VISTEON AUTO PARTS, PAYLESS CASHWAYS INC., STORAGE TECHNOLOGY CORPORATION(1984), BUILDERS SQUARE(1999, EMERGED 2001), KB TOYS, KRB(MBNA CORPORATION), LONGS DRUG STORES, TANDY CORPORATION, GLOBAL CROSSING LIMITED(2002), CONSECO INC.(INSURANCE 2002), UNITED AIRLINES(2002), CIT GROUP INC.(2009), DELTA AIRLINES(2005), REFCO INC.(FUTURES TRADER 2005),NORTHWEST AIRLINES(2005), EASTERN AIRLINES(1989), US AIRWAYS(2004), CONTINENTAL AIRLINES(1990), BRANIFF AIRLINES(1982), SOUTHLAND CORPORATION(1990, EMERGED 1991), ZENITH ELECTRONICS CORPORATION, PACIFIC GAS & ELECTRIC(2001), CALPINE(2005, EMERGED 2008), LEVITT & SONS, PETROLEUM HELICOPTERS, BORDERS BOOKS, PAN AMERICAN AIRWAYS(1991), ETC.    THEY ARE ALL BANKRUPT AND YOU WILL HAVE NOTHING REMAINING IN YOUR RETIREMENT ACCOUNT!  SELL, GET-OUT AND DON'T LOOK BACK!

Oct 3, 2011 10:52PM
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Fear of today's market is rampant.....................time to selectively buy for future selling........baby boomers selling stocks today are being replaced by 8 Asian workers and four South American workers..............they will buy stocks in the global economy.............good USA company stocks are going to create wealth somewhere..............follow demegraphics and money always appears!!!!!!

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