Jim Cramer's Predictions for 2008
Jim Cramer* listed his top 10 predictions for 2008 last week and seeking alpha reported on it, opining that some of Cramer’s forecasts seem more likely than others while a few appear to be wishful thinking:
Goldman Sachs (GS) makes more money than every other brokerage firm in New York combined and finishes the year at $300 a share. Not a prediction—an inevitability. In fact, it’s only January, and I think it’s already come true.
Oil goes much higher, maybe as much as $125 a barrel… We are running out of oil more quickly than people can imagine, and that means great returns for oil companies. Just buy the stock of the company you filled up at today or buy a driller (Transocean (RIG) is my favorite), then sit back and make money.
The Fed arranges an Arabic Heimlich maneuver on Citigroup (C), so the banking giant doesn’t choke on the worst mortgage portfolio in the country.
Verizon (VZ) becomes your cable provider.
Cramer praised Verizon’s Fios, and predicted that the stock will be the best performing in the Dow Jones averages. Time Warner (TWX) and Comcast (CMCSA) will be hit hard, he adds.
Turning to private equity, Cramer predicted that Cerberus Capital Management will fail to resuscitate Chrysler (which he attributes partly on the choice of Bob Nardelli), and that Congress will agree to bail out the fund.
Cramer is bullish on Google (GOOG): Google stock reaches $1,000. The company becomes one of the top three companies in the U.S. in market capitalization… and successfully challenges Microsoft (MSFT) for operating-system dominance.
With the dollar weak, Cramer foresees European companies swooping in to buy up the likes of Merrill Lynch (MER), JPMorgan (JPM), Colgate (CL), Clorox (CLX), Whirlpool (WHR), and Black & Decker (BDK) which, he forecasts, will all see their stocks rise as a result.
Apple (AAPL), he predicts, will reach $300. He sees it successfully taking over the music business and, among other knock-on effects, he forewarns that Warner Music Group (WMG) will file for bankruptcy.
Turning to the media, Cramer posits that the cash-strapped New York Times (NYT) will accept a buy-out offer from Mayor Michael Bloomberg at $20 a share.
Don’t be so quick to scoff: The cash is spare change for Bloomberg who, don’t forget, already owns a small media company. I’d say the $10 share price is even money. That’s how bad it is at the Times. The Bloomberg buyout is probably a 100-to-1 shot, but may be less if he decides not to run for president and needs something else to do this year.
Returning to his lament over governmental and Fed policies, Cramer predicts that the victims of foreclosure will lead a march on the White House and lay siege on the Fed. This, he says, will lead to Bernanke resigning, his replacement slashing rates, and the markets rebounding. As Cramer admits, this one’s a very very long shot.
But if Bernanke or a future Fed chair does cut rates meaningfully, here’s a sure bet: That’s the time to start buying.
*Jim Cramer is an American television personality, former hedge fund manager, and best-selling author. In 2007, NewsBios.com named him one of the 100 most influential business journalists in the United States.
Reader Comments (8)
There are no guru's, so while I might agree with a couple of these, this sounds more like one financial mystic reporting on another, good bathroom reading. But I am buying a little more Google and Apple.
I have come to the conclusion, after revisiting the story of the monkey who threw darts and picked stock market winners, that the people who profess to pick stocks better than the average Joe all have monkeys with darts in their employ.
Here is my advise. Choose twenty stocks of companies you patronize and like - Jamba Juice, Starbucks, Apple Inc., Verizon, Sears, Circuit City for example - and write the name of each on a small piece of paper. Fold the papers and place them in a hat and mix them up. Then draw twelve. These are the stocks you will invest in over the next twelve months. On the same day of each month, pick one of these twelve at random and invest 1/12 of your annual stock investment budget in that stock. Repeat each month.
I contend that you will do as well following this method as any other. And you will enjoy the added benefit of knowing something about the companies you invest in because you are not just a stockholder, you are a customer.
I invest in mutual finds. With the little I have to invest, I cover way more ground this way.
Starbucks stock has dropped 50% over the past 15 months. They just brought their original CEO back this week. Might be a good time, assuming you believe in the company, to buy.
Hey, I think I like Kramer's plan (since I don't have a monkey) (-:
Think I might try it. This way I get the benefit of regular investing without trying to time the market, and I invest in businesses I frequent and know a little about. So if they start doing something I think will hurt stock, I can sell and get something else. I LIKE it!
I agree, Kramer's plan is as good as any, and a lot easier to manage and maintain. A few minutes once a month is all it might take. Think I'll give her a try as well, just as a low cost experiment, and let you know how I did against the S&P this time next year.
Beanie Babies are down right now, a good time to scoop up a bunch at bargain prices and make a killing down the road when they make a comeback.
My wife has a closet full of beanie babies, Jarrod. I can make you a super deal for the whole bunch!