Japan reconstruction trade still in play

While the radiation problem is foremost on people's minds, there are signs that the country's $300 billion rebuild is starting to heat up.

By Jim Cramer Mar 30, 2011 9:31AM

the streetjim cramerHow delayed will the reconstruction be in Japan? That's on people's minds, given the seeming intractability of the radiation problem from the stricken nuclear power plants.

 

I don't underestimate the dangers of the radiation. I also think there is probably much more we don't know about what is going on right now. But I do believe we are already starting to see some of the firmness in the metals and mining complex that I am expecting to come from this event, and I think the materials needed are already being purchased.

 

There are two things we now know that we didn't initially: The destruction was far greater and more wide-reaching than first reported, and the nuclear option for electricity may be waning.

 

I think that's why copper has caught a bid again. I think it is why iron ore and steel have started trading up. And I think it is why the aluminum inventories are being drawn down.

This $300 billion reconstruction trade -- that's the number I am using -- will be obscured for some time by the meltdown of the reactors and its aftermath. But it is already bubbling under the surface.

 

It must be played with the usual suspects: Caterpillar (CAT), Alcoa (AA) and Cummins (CMI), as well as coal and construction companies like Fluor (FLR) that will soon be getting the big orders.

 

At the time of publication, Cramer was long CAT, AA, CMI and FLR.

 

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.

 

Follow Cramer's trades for his Charitable Trust.

 

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1Comment
Mar 30, 2011 11:15AM
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Buy GE, Japan's going to need new reactors Surprised
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