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Mad Mail: A Starbucks Comeback?

Jim: I want to thank you for your comments on Monday night's show about saving the auto industry. You say what everyone is thinking, even those on Wall Street, although most are afraid to say it. America really needs you in a political position. We have new hope with Obama, but I am sure Wall Street will fight him at every turn. Once more, we thank you for your commitment to fighting the brave and noble fight for Main Street America. --Ron in Kentucky

Cramer says: “…why do I favor what Fannie Mae and Freddie Macwere doing today…? Because if you own a house you want your house to stop going down in value. These people, if they get the money, they’ll stay in their home. If they stay in their home, your house will go up in value. That’s what it’s about. They’re not really getting any money. They’re just getting better terms.”

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Booyah Professor Cramer:Starbucks has definitely helped me out with cramming in late night study sessions right before an economics exam and I mean--come on, you aren't hip unless you come to class each morning with a Starbucks coffee in your hand. I was wondering about your take on the future of this company since it is now at a low price of around $10 per share. --Nathan from Vincennes University

Cramer says: “…While that’s a great idea to look at it, until we see…more of a turn with Starbucks…every time we try to call a bottom in the stock we’ve been wrong.”

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Jim: This question is in response to your comment recently about Goodyear and automotive related stocks. I understand the reasoning against automaker stocks at this time. However, if people aren't purchasing new automobiles then doesn't it stand to reason that they need to maintain their current vehicles? As such, wouldn't aftermarket automotive parts related stocks, possibly including Goodyear, be potential good investments at the correct price point? If so, do you have any advice in this area? --Steve

Cramer says: “The only one that has reported an upside surprise is Monroe. I’m not going to go beyond Monro…”

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Booyah Jim: Lately, you've promoted a reasonable strategy of investing in stocks for their dividend. My only concern is that in this environment, how do you tell if a company is going to lower their dividends significantly? Could you enlighten on reading the financials of a stock to determine if they can and will maintain the dividend? --Sawyer In Texas

Cramer says: “…You have to look at what the company is earning, and then you have to figure out whether they can pay that dividend, if [their] dividend is less than what they’re earning. Some companies, you have to look at cash flow. That’s a harder thing to do. But I am going to be on this over and over again, explaining what to look for. But the most important this is a red flag of a double-digit dividend. Traditionally, those cannot be maintained…”








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