Another tough day in the market may make home gamers want to get rid of their big industrial plays. But Cramer said if you haven’t sold yet, don’t bother. After all, he thinks the market is closer to the bottom than it is to the top.
“The time to capitulate has passed,” he said. “The time to be opportunistic may soon be upon us."
Take Caterpillar, for example. It reported the best quarter on the Dow Jones Industrial Average, with the biggest upward estimate revisions. But because of the perceived slowdown worldwide, coupled with miserable industrial production numbers released Tuesday, CAT has been a real easy sale. The problem, Cramer said, is that the sale has been ongoing and now is not the time to realize there’s a slowdown.
Cramer contrasted CAT with Procter & Gamble , which reported the worst quarter versus the expectations in the Dow. Yet, it seems indestructible. Cramer believes that’s because PG said it was spending far more on commodity costs than it had predicted when it last reported. Since the commodity collapse, that is no longer the case. But, Cramer said, if you have only recognized this now, you may be coming in close to the top.
Other sectors getting slammed include oil, machinery makers and miners. But Cramer warned about easing the pain by selling.
“You’re being emotional if you sell here," Cramer cautioned. “That is, as long as the fundamentals are still intact."
In other words, Cramer is not suggesting holding onto Hewlett-Packard , Research in Motion or Cisco . Those companies are broken, he said. But Caterpillar and Cramer fave Cummins both reported excellent quarters, even as the companies’ stocks fell.
If you took profits when these stocks were ripping, Cramer thinks its time to think about buying back the stock using “wide scales” on the way down.
And if you haven’t already sold a stock like Freeport-McMoRan or DuPont or ConocoPhillips , he said, “perhaps it’s time to rethink the direction and recognize that the bottom, while not here, may be closer than you think.”
When this story was published, Cramer's charitable trust owned Caterpillar and Cummins.
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