Cramer: Don't miss these 3 drivers
Jim Cramer | firstname.lastname@example.org
These drivers are so stark that I think you ignore them at our own pocketbook's peril. But they go unheralded because of weak employment numbers and fiscal cliffs and unsustainably high Spanish bond yields.
Why is that? I think that people like to talk negatives because positives either seem like they aren't rigorous or you are ignorant of the so-called big issue.
I want to stipulate that I am not ignorant of the big issues. I'm constantly checking out every European bond auction and I am well aware that our taxes are going up--and maybe, for some of us, up big.
But I keep going over these quarters from about one-fifth of the companies that have already reported, and I hear about these three areas:
1. Automobiles. Today's affirmation? Union Pacific talked about cars as being a huge driver of rail traffic, enough to help offset the decline in coal. I think this driver is obscured because General Motors and Ford are so international (and their global businesses are such disasters right now) that you can't determine their strength. We don't want Ford or GM to pull back from Europe or Latin America; that would just be stupid. But I have to tell you that shares of a U.S. Ford would be at $15 by now. GM? Call it $25.
2. Housing. How strong is housing? It is now in the phase where even the most wildly inconsistent housing plays are working. Witness the 3-point run in Whirlpool--remarkable. It's tough to recommend Lennar, Toll Brothers, Pulte Group, and Standard Pacific right now after these runs. But that doesn't mean you can't pounce at the right moment. And, as the charts show, the right moments are coming up over and over again. Toll dropped from $28 to $23 in a heartbeat. Pulte sold off by 25 percent in six weeks. When we see pullbacks, you have to pull the trigger. We have a developing house shortage and these are the guys with the homes.
3. Aerospace. It's so easy to dismiss these stocks because of worries about the finances of the airlines and the slowdown in China. But take a look at Textron and the amazing numbers from Cessna. Go listen to what Dave Cote said on CNBC's "Mad Money" this week. He made it clear that the aerospace cycle has its fits and starts, but it is in a long-term ascendance. Anyway, is it really possible that in the first year of delivery of Boeing's Dreamliner that the cycle is now over? That's a little ridiculous.
So we have three unheralded cycles that are working even in this horrendous environment. Who knows what would happen if things ever get better? In the interim, when we see pullbacks, these are the themes that have our backs and can be bought into any weakness--provided that you don't put too much emphasis on the international players and you stick with as much domestic security as you can muster.
Disclosures: Cramer's charitable trust has no positions in the stocks mentioned.