Jim:I've been watching your show and have heard your warnings about investing in stocks that are in Obama's crosshairs, such as pharma and health. Your reasoning is that Obama wants to make health care cheap, and so this will negatively impact growth and revenue for these companies. However, I have to disagree with this argument. Obama's plan to make health care cheaper is not by forcing a reduction in the cost of drugs. Obama's plan is to use taxpayer money to make health care more available to those who cannot afford it. Therefore, the drug companies should not be affected. What do you think? --Vandad
Cramer says:“Actually, President
Obama wants to do that, too. That’s why I don’t
like UnitedHealth …why I don’t like Cigna . But
you have to understand, he’s approaching it very
rationally and not in a pro-shareholder way, but maybe in a
pro-health-care way. There are many me-too drugs. There are
many companies that have drugs that are just kind of
fighting back and forth that could be pitted against each
other. And Obama wants to pit them to get lower prices for
all Americans. It’s not a bad goal. It’s bad if
you own the drug stocks.”
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Jim:I bought The Chubb Corp. a while back and have heard you recommend this stock as a good stock. Why does it continue to go down? What is the catalyst driving it down, or lack of catalyst to drive it up? --Chuck
Cramer says:“I was hoping they’d be able be, along with Travelers , buyers of the Hartford property and casualty division. But it looks like Hartford got the TARP money, and they don’t have to sell it. Chubb and Travelers are the two insurance companies that don’t need the government’s help. That’s why I like them. I think in the end that works to their favor.”
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Dear Cramer:If a company acquires another company for strategic long-term value, does that make the acquiring company less likely to be the target of a takeover, more likely, or totally irrelevant? --Tom
Cramer says:“I was debating this with NetApp just today, saying, ‘Why didn’t NetApp go down when it made that acquisition[of Data Domain]?’ I think it’s because people think that they’re going to be acquired. It can be many different things, Tom. But I’m just giving you that NetApp as being one that shows me that people do not give up after a company’s bought another company.”
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Hello Jim:With the autos likely to cease
or slash production in the summer months, what impact do
you see this having on electricity demand and natural gas
prices? Natural gas supply is at high levels and industrial
demand is shrinking. Jim, when do you see the price
bottoming? --Dan
Cramer says:“I said last week that
I though natural gas bottomed at $3.40. It has not taken
that price out. And I don’t think the auto
companies are going to have an impact on the electricity
like we thought they would. Or it’s already been
felt.”
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