The Third Pig: Jim Cramer Archives

January 05, 2009

"The Third Pig" On Reuters, Yahoo Finance and Others

The Third Pig

Articles that appear on The Third Pig occasionally appear on the Seeking Alpha website and are regularly picked up by the general financial media outlets including Yahoo Finance, Reuters and other financial blogs. I have listed some of the latest entries and other locations they can be found:

Asset Allocation in 2009: Best to Go with the Devil You Know at:
Yahoo Finance: http://finance.yahoo.com/q/h?s=SBUX and http://finance.yahoo.com/q/b?s=BRK-A
Fav.or.it: http://fav.or.it/post/953406/asset-allocation-in-2009-best-to-go-with-the-devil-you-know

Coach: Luxury on the Cheap at:
Guru Focus: http://www.gurufocus.com/forum/read.php?2,42620
Fav.or.it: http://fav.or.it/post/929527/coach-luxury-on-the-cheap

Five Things to Be Thankful for in This Market at:
Reuters: http://www.reuters.com/finance/stocks/marketViews?symbol=COH.N
Yahoo Finance: http://finance.yahoo.com/q/b?s=COH&t=2008-12-15T03:55:28-05:00

GM Bailout Would Be Agony For Taxpayers at:
Yahoo Finance: http://biz.yahoo.com/ic/news/330.html?time=1226885400

Obamanomics and the Stock Market at:
Stock Shoot: http://stockshoot.com/content/view/6602

Buffett and Cramer Agree: It’s Time to Buy Stocks at:
AOL Finance in the Headlines area: http://finance.aol.com/related/berkshire-hathaway-inc-cl-b/brk.b/NYS?topic=144012971&tab=3

Greed, When Others Are Fearful, Is Good at:
Wall Street Oasis: http://www.wallstreetoasis.com/newswire/greed-when-others-are-fearful-is-good

If you would like to share some of the above articles with your friends, family or associates just click any one of the icons below for the various websites including ShareThis, Digg.com and Facebook. Here is to a wonderful 2009 in the market.

Disclosure: none

Subscribe: Email | Reader | RSS | |

Email |

Posted by Ben Taylor at 05:28 PM |
Permalink | TrackBacks (0)

October 10, 2008

Buffett and Cramer Agree: It’s Time to Buy

It’s a little amusing to me how much attention Jim Cramer’s comments about pulling your “5-Year-Money” out of the market and sitting it in a safe place like cash or bonds garnered over the past few days. I for one, having given similar advice, didn’t find it that controversial. An investor, especially an individual investor, should never put their near term money at risk in the stock market.

Some professionals, like Henry Blodget [video], have even gone as far to say Cramer’s call to action is at odds with what Warren Buffett is doing, which is buying up strong franchises like, Constellation Energy, GE and Goldman Sachs. I beg to differ. Underlying Cramer’s call was any money investors do not need for near term purposes, should absolutely be at work in the market. It’s time to buy.

There are deals in the stock market that can be had right now that will likely not be seen again for quite sometime. A few are:

Berkshire Hathaway (BRK-A, BRK-B): If there was ever a time to invest in Buffett’s company it’s now. For years the firm held $50 billion in cash searching for investments to make. This year alone, Buffett has invested $40 billion. He received warrants on both the GE and Goldman Sachs deals and though both are currently out of the money, they stand to be highly profitable investments. Berkshire’s A shares are likely worth $150,000 to $160,000 before accounting for how the company’s new investments will impact the business. Shares ended the day at around $113,000 per share, representing a 25% to 30% discount.

Perini (PCR): Perini, a construction and general contracting concern has been trading well below the value of their backlog of sales and orders waiting to be filled. The company also recently announced $248 million in new contracts in Florida and Virginia. The stock gained almost 20% today skyrocketing at the end of the day to $17.64, but still trades near cash on the balance sheet of $15.55 per share.

Delia’s (DLIA): Recently Foot Locker (FL) offered to buy this clothing retailers direct marketing business CCS for $102 million. The enterprise value (market cap + debt – cash) for the entire firm is only $66 million. The market hasn’t responded yet as the stock continues to hover around $2 per share although it gained almost 10% today. The selling in the market is pervasive and there just aren’t any buyers right now. But there will be for this company which is likely trading at less than half it’s true worth.

Disclosure: I and the clients of Brick Financial Management, LLC owned share of Berkshire Hathaway, Perini and Delia’s at the time of this writing.

Subscribe: Email | Reader | RSS | |

Email |

Posted by Ben Taylor at 12:39 PM |
Permalink | TrackBacks (0)

October 07, 2008

What To Do With Your 5 Year Money

Jim Cramer, the self described innate optimist, has found himself the target of some scathing criticism today for giving a grim picture for the near future for returns in stock market. On Monday, on NBC’s Today Show, he advised viewers to pull their “5-Year-Money” out of the stock market and place it in cash. Almost instantaneously, and I might say coincidentally, the market dropped significantly. [Click chart for larger image.]

Although this makes for good television fodder, the criticism of Cramer in this instance is overblown. Cramer is exceedingly popular. His books are bestsellers. His show is one of the highest rated on cable television. But I doubt Cramer’s comments can move markets. Small, individual stocks, maybe. But not markets.

Despite the criticisms, Cramer’s advice is not only timely, it’s timeless. Your 5-Year-Money should always be in safe (low volatility) investments, even in the best of times. And I don’t say this because Cramer’s advice is identical to the advice I gave just a few days ago. I say it because it is simply sound asset allocation.

Stocks are great investments, but they are also the most volatile of investments. Thus if an investor’s time horizon is less than five years, and he needs to pay for his kid’s college tuition or put his mother in a retirement villa or finally replace his old jalopy to get to work, in that time frame, it doesn’t make sense to take the risk. Although stocks rise most of the time, they don’t all the time. In some situations, cash makes more sense.

In periods of 10 or more years, stocks beat cash 85% of the time. But in periods of 1 year or less, stocks only outperform 65% of the time. Although we just gave this advice, it’s well worth repeating:

For money you need within 5 years – “5-Year-Money”: Keep those funds in an interest bearing account at your bank of choice. Congress has approved and the President has signed into law that the FDIC will now insure up to $250,000 in deposits at banking institutions.

For money you need beyond 5 years: Invest or keep your money in a diversified (at least 20, no more than 30) portfolio of stocks of low leverage (companies that don’t make use of debt), high return on capital companies. If you have cash available, and it’s not paying for Johnny’s second semester at State U., you would be wise to add to your portfolio.