In late July we started highlighting the "happier days are here again" thesis. This was the idea that with commodity prices going down, especially oil and food, consumers might start spending again and companies with heavy exposure to commodity costs would become much more profitable.
We said "happier," not "happy," because we knew our nation's economy was still deeply troubled. Keep in mind, this was back when the price of crude was still over $120. It was also before the Western financial world almost collapsed and retail sales fell off a cliff. To use the parlance of Wall Street, we were early.
Now, with the price of oil at $33.87 a barrel, mortgage rates falling, housing prices coming ever closer to that June 30, 2009, bottom that Cramer's predicting, and GM and Chrysler given a lifeline, happier days might really be here again.
Our first "happier days are here again" play over the summer was Panera Bread, which Jim mentioned again tonight along with Wal-Mart , as the two best ways to play cheaper gas prices. Panera's actually up 12.3% from where we recommended it on July 23, in contrast to the other original "happier days are here again" plays like Disney and UPS, which are down big along with the market.
In Friday's Game Plan, Jim talked about how cheap oil would be the big theme next week after being obscured by lots of bad news from corporate America this week. Because we try to get ahead of the news, we talked about some other plays that benefit from extraordinarily
cheap oil and natural gas. The chemical companies that we compared on Thursday--PPG and Dow Chemical, which is the largest consumer of natural gas in the world. These are also "happier days are here again" plays, and as long as oil stays cheap, they work.
We may have jumped the gun talking about happier days are here again in late July. But the price of crude's down $90 a barrel since then, and this time happier days truly are here again. Of course, we had to go through some truly miserable days in September, October and November to get here, but things certainly seem happier now than they did then.
Jim's charitable trust owns Wal-Mart.
Cliff Mason is the Senior Writer of CNBC's Mad Money w/Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Richand Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like.
Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.
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