Cramer: "Retailer Shortfalls Are Just the Start"
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Cramer: "Retailer Shortfalls Are Just the Start"
"Retailer Shortfalls Are Just the Start"
By Jim Cramer
RealMoney.com Columnist
9/25/2007 7:34 AM EDT
What do people want, a Fed rate cut and great business results for U.S.-based companies?
The reason we are getting the rate cuts is how bad American business is. The whole premise of the darned cuts is that the Fed finally grasped what we knew: Housing and retail and autos and hiring are all awful.
That's why it should not be a surprise that Target (TGT - commentary - Cramer's Take - Rating) and Lowe's (LOW - commentary - Cramer's Take - Rating) and Lennar (LEN - commentary - Cramer's Take - Rating) -- and I am sure Sears (SHLD - commentary - Cramer's Take - Rating) -- are all terrible.
Why is this revelatory?
Throughout the next six months, there will be many disappointing earnings. The cuts won't work their magic for that long, but there will be mucho gun-jumping. The reason I am profiling consumer companies that have moved their business overseas is because of this lag. These kinds of companies will continue to disappoint.
Lowe's blamed the weather. I would have rather blamed the consumer. Target? No blame. Lennar? Everything. Everything is to blame, with the new negative that existing homes are going down in price.
You need to steel yourself and protect yourself during this period. Ask yourself: Does the company you are investing in have growth or does it need the Fed to spur growth? If it has growth, then the growth will go for a higher price than it does now.
If the company you are investing in doesn't have growth now and needs it, you will have to trade around the position -- take profits on a little when the stock rises a bit, buy those shares back when they slide again -- or you will get hit upside the head with the kind of shortfall we got last night and this morning with these names.
Random musings: I remember when Lennar was after me some 20 points ago for saying bad things about the stock. I should be after them for believing good things. "
(in www.realmoney.com)
By Jim Cramer
RealMoney.com Columnist
9/25/2007 7:34 AM EDT
What do people want, a Fed rate cut and great business results for U.S.-based companies?
The reason we are getting the rate cuts is how bad American business is. The whole premise of the darned cuts is that the Fed finally grasped what we knew: Housing and retail and autos and hiring are all awful.
That's why it should not be a surprise that Target (TGT - commentary - Cramer's Take - Rating) and Lowe's (LOW - commentary - Cramer's Take - Rating) and Lennar (LEN - commentary - Cramer's Take - Rating) -- and I am sure Sears (SHLD - commentary - Cramer's Take - Rating) -- are all terrible.
Why is this revelatory?
Throughout the next six months, there will be many disappointing earnings. The cuts won't work their magic for that long, but there will be mucho gun-jumping. The reason I am profiling consumer companies that have moved their business overseas is because of this lag. These kinds of companies will continue to disappoint.
Lowe's blamed the weather. I would have rather blamed the consumer. Target? No blame. Lennar? Everything. Everything is to blame, with the new negative that existing homes are going down in price.
You need to steel yourself and protect yourself during this period. Ask yourself: Does the company you are investing in have growth or does it need the Fed to spur growth? If it has growth, then the growth will go for a higher price than it does now.
If the company you are investing in doesn't have growth now and needs it, you will have to trade around the position -- take profits on a little when the stock rises a bit, buy those shares back when they slide again -- or you will get hit upside the head with the kind of shortfall we got last night and this morning with these names.
Random musings: I remember when Lennar was after me some 20 points ago for saying bad things about the stock. I should be after them for believing good things. "
(in www.realmoney.com)
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