Cramer's Plan for Next Week's Earnings
"Do not trade ahead of the quarters. Listen to the quarters."
That's Cramer's mantra for earnings season and one he reiterated on Friday's Mad Money. When he was a hedge fund manager, he would look for patterns in what he had done wrong and discovered something distrubing: He traded miserably during January, April, July and October. That is, during earnings. After reflecting on this, Cramer realized the losses sometimes came from trying to anticipate a report. Other times, he learned, he got caught in a sector bet where a leader reported poor results and it pulled down the entire group. But most of all, he found that he was simply overwhelmed.
"I shot first and then listened to calls later. I traded off headlines. I didn't read the research," Cramer recalled. "I was putting myself through torture when I should have been listening."
With that in mind, Cramer laid out what he'll be listening to next week.
On Monday, IBM is reporting after the closing bell. Two weeks ago, another consulting company, Accenture , reported strong results. Cramer's charitable trust owns Accenture, so he'll listen for IBM's tone about consulting and how it compares to Accenture. If IBM doesn't sound as strong as Accenture, his charitable trust may put more on the table.
Pepsico reports on Tuesday and Cramer has great expectations for the soft drink giant. If the stock is up on an in-line quarter, then it might make Cramer think about how people are now betting on a softer economy.
Cramer will be listening to United Technologies' earnings report on Wednesday. He noted that 50% of their business is done overseas and is comprised of various industries, including aerospace, commercial construction, and heating, ventilation and air conditioning.
"Here's a company that reconciles its businesses with how the world's economies are doing and offers intense forecasts," Cramer said. "They are rigorous providers of information and scrutinizers of trends. They do my work for me."
On Thursday, Cramer is listening to Caterpillar . He said the machinery-maker is a primer on how both emerging and declining markets are doing around the world. Cramer said you can learn more about China from CAT than anywhere else. The company should also give insight into infrastructure building, mining, implementation of the economic stimulus and the status of the housing cycle.
Schlumberger reports on Friday and that's another call Cramer will be on. He thinks this will provide an oil forecast and a sense of what major oil companies have to say.
"Listen and learn, like I will," Cramer said. "Learn enough to help manage your portfolio and make the best, most informed decisions possible about the future, not the past of the stocks you own or are considering buying."
Cramer's charitable trust owns Accenture.
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