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Road Rules
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Investing can be confusing. Luckily, Cramer has mapped out some road rules for all you Home Gamers trying to navigate the jungle that is Wall Street. Think of it as "Mad Money 101" –- some fundamental advice to keep in mind as you play the market. Whether you're a first time investor or a seasoned financier, it's always good to remember the basics.
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Feb.04
6:18 PM ET
Monday, 4 Feb 2008
Bald Is Beautiful on Wall Street: Part 1

Bald is beautiful on Wall Street, Cramer said.

But he's not talking about Sy Sperling bald. The Mad Money host was referring to company earnings that look good superficially, but can't be sustained. In genuine Wall Street gibberish, a quarter like that is said to "have hair on it."

Exxon Mobile's [XOM  Loading...      ()   ] last report is a perfect example. The oil giant announced a $2.16 a share profit, 21 cents above the $1.95 estimate, and then the stock dropped.  Why?  A closer look showed that one-time gains boosted the company's numbers by over $1 billion. Take that away, and Exxon beat by only 5 cents -- and some of that EPS growth came from coporate finance and stock buybacks, which is not was investors want from an oil company.

But that's not the only reason Wall Street's coughing up fur balls. Exxon only grew production volume 1% year-over-year. Not to mention, Exxon spends more on buybacks than it does replacing its reserves, Cramer said, and for an oil company, reserves are "everything." Now he's thinking a February analyst meeting is going to show just how little Exxon put into finding new oil.

So forget about Exxon and its hairy earnings. Go bald with Apache [APA  Loading...      ()   ] instead, Cramer said. APA has 9% to 12% production growth and great reserve replacement.

"I just see no reason to own the Exxons of the world."

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