Cramer: Dow to Climb 15% in 2011
Web Editor, "Mad Money"
Expect stocks to continue their climb throughout the New Year, Cramer said Monday. As a result, investors should buy, buy, buy because this is “the year for aggressive investing.”
How can Cramer be so sure? For a number of reasons, actually.
He thinks hiring is on the rise, and that creates a virtuous circle for the economy that pushes stocks higher, too. New jobs translate into more demand for housing, a dramatic decline in home-loan defaults, more credit demand at banks and higher tax receipts at the federal and local levels. Couple that increased revenue with the austerity measures already in place, Cramer said, and you end up with a lower deficit than anyone’s predicting.
Plus, copper, a basic metal at the heart of all the world’s economies, is up. That in turn signals a rise in the demand for steel as well. Then there’s also the fact that people are cashing out of bonds and returning to stocks, which means they’re excited about making money in the market again.
Cramer’s so confident in the coming year that he put a number on it: Dow 13,365, a 15-percent jump from current levels. That’s his guess after analyzing all 30 Dow stocks, predicting their gains for 2011 and adding them together.
To name just a few of those predictions, Cramer expects Boeing to rise 28 percent to $85, Home Depot to jump 27 percent to $45 and Caterpillar to reach $120, or 27 percent higher than its present level. He’s bullish on the banks, too, and said the group is the best way to play this rebound in hiring, the consumer and new building.
What won’t work in 2011? The defensive names: Kraft Foods , Pfizer , Merck , Johnson & Johnson . The same goes for the old-tech companies, like Microsoft , Hewlett-Packard and Cisco Systems .
Investors are better off with the Dow’s offensives stocks, Cramer said, and the oils. But there are three in particular he likes the most. Click here for his report on those.
When this story published, Cramer's charitable trust owned Boeing and Caterpillar.
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