Mad Mail: Why Are the Rails Getting Crushed?

Hi Jim: Great job on the Halftime show today. You recommended Central European Distribution last April and it's been a positive in my portfolio, until last week. They reported a great quarter and positive guidance, but the stock is down 20%. Am I missing something? I was hoping that this is a buying opportunity but am concerned that there is other bad news that I have not seen yet. What is your advice? --Steve

Cramer says: “I think it’s just geopolitical…Russia’s gone nuts. There’s some political risk here, but the business itself, you’re absolutely right.”


Dear Jim: The economy seems to be better than people thought, fuel cost are coming down, and the rails are getting hammered. What on earth is that about? It's insane! --Ron

Cramer says: “…the hedge funds have decided to operate on the rails. They took them down big today. The pattern when the hedge funds go after a particular group is that day one it looks like they’re so far low you have to buy them and then they come back and they pound them and then they pound them again. I think that there is at least 10% more downside to every one of the rails…I cannot endorse them here.”


Hi Jim: Back in June you made an example of highlighting how the market had given us a gift on Nucor and the secondary offering priced at $74. Since then, the company has announced great earnings and a not-so-bad outlook going forward given the global growth challenges. The stock is now well off the secondary offering price. Should we continue to accumulate this stock or is the steel boom over? It seems odd that both presidential candidates are talking about an U.S. infrastructure stimulus package next year, which should be good for steel, yet these stocks are collapsing. --Aaron

Cramer says: “These stocks have all been crushed as part of a gigantic retreat of everything cyclical. My take is they’ve come down enough, but maybe I’m not the good call on this…I liked them lower and I liked them higher because I think steel’s multiyear. So maybe you can say, ‘Jim, long term you’ve been right, short term you’ve been wrong…I think Nucor’s good, but I liked it at $40 and I liked it at $60. I liked it at $70. So maybe my judgment’s questionable.”


Dear Jim:Cleveland Cliffs and Apache keep getting hammered because of the oil decline spilling over into the natural gas sector and it appears that Cleveland Cliffs has been getting manipulated daily by short players. Their forward price-to-earnings ratios are fabulous, and I'm wondering whether to hold my positions (which have significant gains) or cash out some of the profits at this level. --Randy

Cramer says: “Remember – I said Cleveland-Cliffs must be sold after they bought that coal company…they paid too much at the top of the cycle for coal. So I do not want Cleveland-Cliffs. Apache, there are other natural gas companies that are now cheaper. But Cleveland-Cliffs is a no-no. They’re overpaying in order to block their own takeover.”

Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?