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Cramer: Don’t Be Fooled By These Stocks

Monday, 31 Oct 2011 | 6:09 PM ET
Cramer's 'Trickster' Stocks to Avoid
Mad Money host Jim Cramer, warns investors not to get "tricked" by the airlines sector; gold miners; supermarket stocks, and Advanced Micro Devices.

While there are many stocks worth owning, there are certain sectors and companies that Cramer wants to stay away from.

First, the “Mad Money” host warns homegamers not to buy airlines. They have fuel problems, high labor costs, immense competition and are incredibly cyclical, he said.

“I have to wonder if most airlines are even viable as private companies over the long-term, because every few years they seem to fail or need to restructure,” Cramer added. “Don't even think about owning an airline.”

Second, don’t be fooled by gold stocks, Cramer said. While he has recommended gold miners in the past, mining for gold is so difficult, dangerous and costly. That’s why he has decided not to recommend gold mining stocks anymore. He would only play gold with bullions or coins, or their stock equivalents like the GLD .

Third, the supermarket business is a not a good one. The business is cut-throat, the margins are tiny, stealing is endemic, the waste is legion and the risks are outsized, he said. The only name he’ll ever endorse is Whole Foods because it is above the competition and is regarded as a healthy food play, not a supermarket play.

Finally, there are two tech stocks that Cramer doesn’t like—Advanced Micro Devices and Micron Technology. Both have failed to deliver for anything other than brief trades. AMD is up against Intel and Micron, which makes commodity chips, is always undercut by an Asian company.

“There are so many other great stocks out there worth owning,” he said. “Just skip these and invest anywhere else.”

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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