FEATURED SLIDESHOW
Who Is The Worst CEO?Mad Money needed new inductees for its
Wall of Shame, so we asked viewers for
nominations.
RECENT POSTS
- Remorseful Regulator Leads Reform Fight
- Lightning Round: AT&T, Verizon, Novartis and More
- Lightning Round OT: Alcoa, Weight Watchers and More
- Why Amazon Rules Retail
- Nordic American: Sinking Ship or Titan Tanker?
- Cramer: What Monday’s Housing Number Really Means
- Cramer: Buy These Banks, If...
- Time to Buy Treasurys?
- Lightning Round: Las Vegas Sands, ADC Telecom, Satyam Computer and More
- Lightning Round OT: Knight Capital, Ebix and More
MAD MONEY FEATURES
PODCASTSWatch the Lightning Round whenever and wherever you want.
FULL SHOWSMissed an episode of Mad Money? Watch the lastest show here.
OFFICIAL MAD MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
CRAMER'S SOUNDBOARDAdmit it: You’ve always wanted to hit the “They know nothing!” button. Here’s your chance.
CRAMER QUICK PICSCheck out the Mad Money host on set, back to school, behind the scenes and more.
VIDEOSGet all your favorite Cramer clips right here.
SHOP FOR MAD MERCHANDISEBuy Cramer books, bobbleheads and other Mad Money merchandise.
RING TONESPick up the phone! It’s Cramer! New Mad Money sounds for your cell phone.
TEXT MESSAGE ALERTMad Money’s mobile. Get show highlights sent to your phone.
Text Size 
 |
That’s why Cramer introduced two mortgage-related stocks, IndyMac Bancorp [IMB
Loading...
()
] and Standard Pacific [SPF
Loading...
()
], to the Sell Block on Thursday.
It’s obvious that these stocks are horrible. Just look at the charts. Both companies were trading above $30 less than two years ago, and now they’re around $2. But that’s what makes them look so enticing to many investors. You may think: “how much could I really lose on a $2 stock?” The answer is everything.
You need not look much further than Thornburg Mortgage [TMA
Loading...
()
] as proof that low dollar speculation can ruin you. That company was at $3.40 in March after being a $9 stock days earlier. People who bought it there lost nearly 50% overnight. The stock is now worth less than one dollar.
And these companies make Thornburg look good, as far as Cramer in concerned.
IndyMac’s bad loans are skyrocketing, the company keeps diluting shareholders as shares outstanding continue to build up. And it isn’t even saying it can be profitable this year as it remains heavily exposed to the worst areas of the California market, which make up nearly 50% of its holdings.
Standand Pacific is just as bad. New orders and sales are down big and if it weren’t for its writedowns, the company’s gross margins would have been negative last quarter. It’s also got tons of exposure to California, the Southwest and the Southeast – or everywhere you don’t want to be, Cramer said.
Both these mortgage offenders have low share prices, but that doesn’t mean they’re cheap. Cramer wouldn’t touch either and urged Homegamers to steer clear of speculating on low-dollar stocks.
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website?
Data is a real-time snapshot *Data is delayed at least 15 minutes