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Mad Mail: Why Are Lumber Prices Rising?

Jim: A blue Tar Heel booyah to ya. Interesting Carrizo Oil & Gas segment last night. Question: I am a long-time holder of CRZO with average cost under $5. Should I hold this stock for another couple of years? If not, what should my exit strategy be? Comment: If the rig count for NG shale plays is way up, shouldn't Nabors Industriesbe a major beneficiary? -Chapel Hill John

Cramer says: "You want to sell $5 worth of stock. In other words, you just want to take off what you put in. The rest you can have run, and you'll never lose money. And that's one of the goals. Nabors has been one of the worst-performing stock I've ever seen, it should be up huge. It's a natural-gas land driller. I can't tell you to sell it. It's been an awful stock, but I wouldn't want to own it right here though."

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Jim: I have read your books and I am definitely back to even and more. As you discuss in your last book, I’ve been looking at the dividend stocks. I already have Windstream Corporation and Altria Group and am doing well. Recently a friend mentioned Hatteras Financial Corp, which as you know is a REIT. Given its current share pricing and, yes CRAZY dividend, it got my attention. Hard to understand this company with zero employees. What do you think of it as a spec play? -Thanks, Jerry in Virginia

Cramer says: "No, no, no, this is another one that needs the yield to be in a particular place. 18 percent yeilders should raise red flags. I do not believe you can possibly maintain that yield. I like your other positions very much."

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Dear Jim: I have noticed that the price of lumber has been going up. I don't understand why. New-home construction is still very low. Do you think it will continue to go up, and is there a way to play it? Thank you for all you do. -Daniel

Cramer says: "Plum Creek Timber and also Weyerhaeuser. We too were surprised, given the lack of demand in housing, that lumber is up. But lumber is in tight supply, and I think it's going to go higher."



Cramer's charitable trust owns Weyerhaeuser.

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