Stocks in the same sector don’t always deserve to trade together, but that doesn’t stop it from happening, Cramer said Thursday. Just look at technology and banks, two of the biggest sectors in the S&P 500.
There are good banks and bad banks, good tech and bad tech, he said. But the sectors are regarded as being unified.
“The problem right now is that, at this particular moment, the growth rates of many tech companies and sector subsets are slowing,” Cramer said. “Many are falling further behind other industries … to the point where the sector's growth is only slightly better than the world's growth.”
There are only select portions of tech that can really run, which is why he focuses on individual companies that can grow faster than the group itself. Right now, he thinks only Apple and Google are consistent winners.
The bank business is similar. Cramer likes some regionals and thinks U.S. Bancorp is the best. But he also likes companies that are growing faster than the global economy and right now, there are almost no banks doing that.
“The regulators want them to put up more capital, the Fed is making it so they can't make much money just by turning on the lights everyday and playing the yield curve,” he said.
Plus fees are coming down, competition is tough and lending standards have gotten extremely high.
Finally, both tech and banks don’t have what this market wants most—dividends.
“There are so many other places to go, and so few stocks that buck the headwinds of banking and tech that I gotta ask, why bother? If the global economy grows, I would rather own the industrials,” Cramer said. “If it slows I'd rather own the food and drug stocks and pocket the dividends. There's just no room at the inn for those two groups going into 2012.”
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When this story was published, Cramer’s charitable trust owned Apple and U.S. Bancorp.
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