GO
Loading...

Cramer: 6 'Obvious' Trades Working Right Now

Thursday, 31 Mar 2011 | 7:08 PM ET

As the Dow and S&P 500 on Thursday posted their best first quarter since 1998, Cramer noted it's all thanks to the "power of the obvious."

The "Mad Money" host said investors are making money on a number of unsubtle, self-explanatory trades. With food prices skyrocketing, for example, investors bet farmers would spend money to plant more crops and bought shares of Deere .

Stating the Obvious?
In a relatively lackluster day in the markets, Cramer stops to smell the cold, hard facts.

Wal-Mart CEO Bill Simon on Thursday told the USA Today he expects inflation, so investors bought gold .

As Japan seeks to rebuild its country torn apart by natural disasters, Cramer said investors bought the raw materials and goods needed for the job, like aluminum, wood and construction machinery companies, like Caterpillar , Fluor , Cummins , Manitowoc and Weyerhaeuser .

Given the global demand for minerals, Cramer noted investors bought miners BHP Billiton , Freeport-McMoRan , Vale and Rio Tinto .

Meanwhile, energy prices are increasing. So investors are buying companies that help control those costs, like Honeywell International . The Morristown, N.J.-based company makes high-tech thermostats and heating controls, Cramer said. They are also buying shares of Eaton and Emerson Electric .

Finally, the unrest in the Middle East and North Africa has left oil in short supply. With the price of oil climbing, investors are buying oil drilling and oil service stocks, like Schlumberger , Halliburton , Baker Hughes and Weatherford .

"Usually when an idea is so glaringly obvious, it's hard to make any money off it," Cramer said. "That's how the market's supposed to operate; if there's some observation that's practically indisputable, then it's probably already baked into the prices of stocks and there's no money left to be made. But in this market, there was and is enough skepticism out there that these stocks can keep going up."

Cramer said people assume that because the U.S. economy is down, stocks should be, too. The bears are concentrating on negative, objective macroeconomic data and ignoring the facts. Being as these trades worked for investors in the first quarter, Cramer thinks they'll continue to be profitable in the second quarter, especially if the U.S. economy gains strength.

When this story was published, Cramer's charitable trust owned Caterpillar, Cummins, Deere, Fluor and Vale.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
BHI
---
BHP
---
CAT
---
CMI
---
DE
---
EMR
---
ETN
---
FCX
---
FLR
---
HAL
---
HON
---
MTW
---
RIO
---
SLB
---
VALE'A
---
WFT
---
WY
---
WMT
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.