Your game plan for a painful day

Stocks with decent yields and growth need to be bought slowly and methodically into the maximum pain point.

By Jim Cramer Nov 1, 2011 9:12AM

the streetLooks like the first-day-as-worst-day theory is playing out. Looks like people are deciding that anything the Europeans do is no good after deciding just the opposite last week.

 

My take: We are not going to get any good news out of Europe. It is all about being less bad. I continue to see things as less bad. However, we have seen a gigantic run in every stock imaginable, and I think this is a correction that will wipe out some but not all of that amazing October rally.

 

Should it wipe out all? If everything is falling apart in Europe, then yes -- but I don't think that's the case. In fact, I think we are seeing a note of realism that always comes back to the same principle: We aren't going to have Lehmans, but we aren't going to have a recovery of any means.


Post continues below.

The only way we are going to see a recovery is with growth, and I don't see any growth in Europe, even as I see it developing here and cooling slightly in China. It's telling that China's market is stable on a weaker PMI, but Europe hates it.

 

I think many stocks that had once again become accidental high yielders really exploded upward in the past few days leading up to the end of the month. Those are now giving up the gains.

 

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The most exposed, though, are the ones I think people want to be in: cyclicals, retailers, technology. I think that as they drop an additional 2% to 3% here, you might want to start buying if they hit decent yield points. The toughest will be cyclicals because they now trade in 2- and 3-point gobs if they are north of $50. Be careful. There is no liquidity whatsoever.

 

I said Monday that there is nothing wrong with trimming highfliers. I reiterate that. But stocks with decent yields and decent growth need to be bought slowly and methodically into the maximum pain point Tuesday. Retailers are the most extended and therefore need to go down the most before they can be bought. If you are at all suspicious of how one of your retailers fared in October, sell it.

 

Finally, a word on banks. The collapse of MF Global (MF) pretty much wipes out any chance of an advance for the group. When I see who bought their debt, I am aghast. I know this event will cause another round of "Don't give the banks any money, we don't know what they are doing" and will also cause the highest-level people in Washington, D.C., to point fingers at the group again for taking too much risk.

 

Sell them again, and stay away from the usual suspects.


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.

19Comments
Nov 1, 2011 7:34PM
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Open-mouthed Being out of the stock market the past 2 days has been 2 of my better days as I don't feel like a loser.Nerd
Nov 1, 2011 5:22PM
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xx, for your info my portfolio is up 29% so far this year. I don't trade based on Cramer's recos. It sounds like you do. How are you doing with his "valuable resources" this year? He really falls into the category of entertainer. Its only because his tv ratings are quite good that he still has a show. I find it hard to believe anyone takes him serious.
Nov 1, 2011 4:35PM
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X X,  "These are not the Droids your looking for"

Nov 1, 2011 3:02PM
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xx is another 'cramerican' ready to lose his shirt

please read cramer's article here on friday where he advises buying the dips

because hedge funds will be buying to cushion the blow

read my response that if this idiot is buying i say look ouy below...hardly spouting off

it's called making a correct pick and profitting from it  

Nov 1, 2011 2:53PM
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Thanks Cramer.  Irregardless  of the other comments I've read here I find you a valuable resource   With a little thought even they could do OK and make some mad money only many seem blind to the opportunity of the stock market especially in times of viotilty.   I guess it is safer just to spout off with no thought.   
Nov 1, 2011 2:52PM
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if he was selling SLAP CHOP they would be the defective ones

glad you like my handle.....i get many comments about it and have discovered that

most people don't know what socialism really is but they sure know they hate it anyway

Nov 1, 2011 2:38PM
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by the way socialist 1 (nice handle) I agree with your acessment, he is a talking head. Petaling his poison in the form of sweet grape Kool-aid. A true legend in his own mind. I'd like to see him selling a "Slap Chop", now that would be must see TV.

Nov 1, 2011 2:24PM
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there are plenty of people who can't sing making money singing

plenty more on tv who make money talking and know nothing

they all got jobs by knowing somebody in the business

KNOWING SOMEBODY IN THE HEDGE FUND BUSINESS WON'T CUT IT, YOU PERFORM

OR YOU ARE OUT LIKE CRAMER ..........TALK TALK INANE TALK

Nov 1, 2011 2:19PM
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CMON

if he knew anything he wouldn't have been run out of the hedge fund business

have you ever heard how he treated his employees?THIS GUY IS PURE POISON

Nov 1, 2011 2:12PM
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My issue with this guy is that he should be selling used cars. Look at what he says:

 

"My take: We are not going to get any good news out of Europe. It is all about being less bad. I continue to see things as less bad"

 

Less Bad? how about just plain BAD Jim.

 

When i hear that statment I hear "GREED". I hear someone saying "I can squeeze out a few more dollars". People are holding this together for the wrong reason, CASH. Well years ago my father told me "Son, Greed only runs from one thing, FEAR. Well one day in the not to distant future Jim. You will write about fear and your article won't be about how to make a little more. it'll be about how to keep what little you still have.

Nov 1, 2011 1:17PM
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so let's clear up the fact that cramer is hated,i don't think many hate him,they

just want his bad advice to be exposed as the fraud that it is

Nov 1, 2011 1:14PM
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i just heard from a neighbor of mine whom i advised to never buy individual stocks

without protection................poor guy owned a substacial position in solyndra

 

the shyster will tell you that yield offers protection but dividends can be eliminated at any time

and offer no protection when the accounting is bogus(which most is)

this idiot cramer will rant against etf's but ignore him...........etf's offer instant diversification

both long and short and they are the proper play

 

WHEN THIS GUY SAYS BUY CONSIDER SHORTING BY USING THE SDS

Nov 1, 2011 12:51PM
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Bet on the EU solving the Greece problem? Oops! Losers.
Nov 1, 2011 11:43AM
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Jubak has been saying for a long time that there will be plenty of aid for banks holding Greek debt and not one penny for Greece itself, and that seems to be playing out.

 

Some European leaders getting together for yet another meeting with bottled water and donuts, then standing in front of microphones to "announce" something is pretty much on par with the high school drama class.

 

I'm not sure what they're still posturing for.  Trying to protect the tourist trade or something?

 

I've always speculated that video cameras emit "crazy gas."  When people stand in front of them and the red light goes on, anything goes (and usually does).

 

 

Nov 1, 2011 11:07AM
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Jim its obvious you have no clue where the markets heading just like us.  
Nov 1, 2011 11:06AM
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Jimmy Boy I love how you and your buddy's all soft peddle this kind of fraud  you Mr. C. and the rest of the crooks that are stealing all our money will get yours in the end 
Nov 1, 2011 10:54AM
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so where is the cushioning of hedge fund buying during this down turn?

remember friday you said buy this pullback because hedge funds would cushion the decline?

remember friday when i said you are an idiot so look out below on this next pullback?

 

of course YOU don't remember but those who read my rants can look it up

 

 

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MF Global's Motto to their customers..."What's yours is mine and what's mine is somewhere in Switzerland, it's all good!" 

 

Gotta love Cramer...he's taking this news all in good stride. "Don't give the banks any money, because we don't know what they are doing". Don't know what they are doing? Really?

I'm pretty sure they know exactly what they are doing.

 

I don't think that the MF Global board of directors will standing in any soup lines anytime soon. HA! Wallstreet keeps winning! America keeps losing!

 

Occupy Wallstreet isn't cutting it. It's time to burn it!

Nov 1, 2011 10:19AM
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