Mad Mail: Trading the SHO List

Jim: With oil falling and the new SHO list [of heavily shorted stocks...find Nasdaq's here and the NYSE's here], will this put a floor under Cal-Maine Foods? It would seem the input costs for feed will go down, transportation costs will go down and the pressure on the stock should go away. There is always demand for eggs regardless of the economy, perhaps more so in a poor economy? --Jim

Cramer says: “You’re absolutely right.” CALM’s a profitable company and it should cause a floor. Cramer’s been recommending Panera Bread and Sears Holdings as profitable companies that have been over-shorted. Just be sure you don’t buy unprofitable companies when reviewing the SHO list.

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Dear Jim: I want to thank you for making investing and money issues simple for the non-Wall Streeter to understand. You are to Wall Street what Tim Russert was to politics. I make the money and my wife invests it into mutual funds mostly. She keeps looking at our money drop...Here's my question: If the market drops 500 points...where does that money go since people are pulling their money out? Are they putting it into CDs? Gold? International markets? I am sure that the Big Guys on Wall Street are not all losing their shirts when the market drops because they are finding another, better investment. Thanks for your insight. --Michael in Illinois

Cramer says: They’re putting their funds mostly in money funds, though admittedly a couple of money funds have had some problems over the past few days. But the amount of money on the sidelines, meaning just waiting in cash to find an investment, is the highest we’ve ever seen. We only see these levels at the absolute bottoms.

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Booyah Jim: I understand the pain watching the financial world in turmoil around you. I work in the auto industry and the same thing is going on here. I feel like screaming just like you did in front of Erin Burnett. But there is no one to listen. Please keep Michiganders and all the autoworkers in mind and put in a good word once in a while for American-made products and us. Thanks. --Sim

Cramer says: I support the loans to the auto companies but only if they are willing to make natural gas-powered vehicles.

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Jim: Mr. & Mrs. T. Boone Pickens have just sold up to a million shares of Clean Energy. What kind of traitor-ish activity is that? They ask us to join them and we did and then they SELL!! --David

Cramer says: I don’t like to see this. But I don’t know the circumstances under which he sold. Maybe he needs money. I don’t know. Remember, it’s a speculative stock.

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Cramer: I saw you yesterday on Mad Money talking about the uptick rule. How is it possible that [SEC Chairman Christopher] Cox cannot grasp the distinction between short selling and allowing short sellers to dictate price? A major cause of the credit crunch has got to be the imbalance created in the market place when a motivated, price insensitive seller (short sellers), and those with capital to invest (cash on sidelines) each wanting the same thing: lower prices! Why would capital come in when the short sellers pay them to wait? --Tom

Cramer says: He’s a public servant. He’s in way over his head. He didn’t understand. This kind of incompetence is the same we’ve seen in the Federal Reserve and the rest of the Bush administration. He should step down.




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