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Shopping J. Crew

Cramer was unfazed by Monday’s 400-point drop in the Dow, he said during Stop Trading!.

The declines are a natural snapback after last week’s “aggressive markups” by money managers hoping to save face after a horrible November. But Cramer doesn’t expect to retest the lows of a few weeks ago. The government’s investment in Citigroup coupled with the green light to buy Fannie and Freddie paper, in turn lowering mortgage rates, shows the markets are in better position than before the Thanksgiving holiday.

If the European Central Bank and the Bank of England make sizable interest rate cuts, Cramer said, “we’re going to be able to blunt this decline.”

Following a weekend of better-than-expected retail sales, Cramer put a spotlight on J. Crew Group. While the company seems to have an inventory problem, JCG is trading at just $9, down from $40. And with little chance of J. Crew going out of business, it might be worth buying a “quality retailer” for just six, seven or eight times earnings.

“This is not a retailer that people think is going to go out of business,” Cramer said. “It doesn’t have that kind of debt profile.”

Cramer also said that Apple is a “stronger stock than people realize.”






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