GO
Loading...

Cramer: Is It Too Late to Buy Home Depot & Lowe's?

Chipotle restaurant
Source: Chipotle.com
Chipotle restaurant

As Hurricane Sandy swept across a large portion of the Eastern seaboard, many retail investors found themselves asking the same question.

Is it too late to buy Home Depot and Lowe's?

"Yes," said Jim Cramer. "You bet it's too late."

Cramer knows that conventional wisdom suggests otherwise.

It stands to reason that as nationwide home improvement stores, both companies stand to benefit substantially in the aftermath of the storm with damage estimates between $5 - $10 billion.

Even if the companies only capture a small piece of that pie – the super storm will almost certainly goose the bottom line.

But -- according to the Mad Money host, that's exactly the problem. "Everyone knows that you go to them when there are repairs to be done."

And by the day of the hurricane – it's all priced in.

To make matters all the more treacherous for retail investors – pros are now waiting in the wings – ready to pounce on investors who subscribe to this way of thinking.

They know it's priced in and "they are at the ready to sell into your buys," said Cramer.

Then there are the short-sellers – they search for stocks that are overbought – and in the near-term, Cramer says both Home Depot and Lowe's fit the overbought criteria.

That's not to say Jim Cramer is making a long-term call – he's not. He's simply saying if you're a retail investor who thinks you're going to make a quick buck from the hurricane – think again.

"I would go so far as to say that you have a better chance to win in a game of cards than you do winning in many of the storm trades."



Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • 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.

Mad Money Moments

Cramer's New Book