Cramer: Egypt Speaks to Gold's Importance
Web Editor, "Mad Money"
The social unrest in Egypt, as people take to the streets to protest current president Hosni Mubarak, has put a floor in declining gold prices, Cramer said Friday.
He had predicted the precious metal would pull back throughout January before resuming its climb higher, but Egypt has served to stop that fall a few days early, as investors seek out the precious metal in such times of volatility.
“I really think that Egypt is another reason why we remember why gold is an important currency,” Cramer said, “and a commodity.”
Cramer has been endorsing investments in gold , telling investors to wait for the declines to end before getting back in. He believes the trend among the world’s central banks of printing more and more cash will devalue currencies, which makes gold more attractive. He also thinks that demand for the commodity itself from China and India’s growing middle classes, coupled with a scarcity of new mines, will push up gold prices. Now, with the riots in Cairo, Alexandria and Suez, and the fear that they could spread to the rest of the Middle East, investors have another reason to consider owning gold.
Cramer has predicted that those prices will eventually reach $2,000 an ounce over the next five years.
Amazon.com’s disappointing quarter was weighing on the Nasdaq on Friday. Cramer said CEO Jeff Bezos often chooses growth in general over profitable growth because his focus is on the business more so than the stock, and this most recent quarter was one of those times.
That said, Cramer thinks AMZN “bounces back,” and he said that the Nasdaq is “where the best opportunities are.” He recommended looking to stocks like Apple or Qualcomm that reported strong earnings but have slipped in price. Netflix, though, has run too much, he said.
Lastly, Cramer admitted that Ford did not report a good quarter and said he thought the company should have worked to tamper analysts’—and his own—expectations going into the report. Still, he thinks CEO Alan Mulally deserves some slack for the turnaround he has engineered so far, and that Mulally was “spending to win” this quarter, which took away from the earnings per share.
“He’s in for the long term,” Cramer said of Mulally, “and I think we should be in for the long term with him.”
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