Jim Cramer’s Advise: Don’t Stop Looking For Opportunities In A Slumped Market

October 2, 2008 | Leave a Comment

I was watching Jim Cramer’s Mad Money last night and thought you might appreciate a blog mention about his views on how to survive in a recession. So for those that may have missed him don’t worry if you’re schedule won’t permit watching him live ’cause netrageouz has ya’ covered!

To catch the latest CNBC Mad Money Videos grab them now. I’ve posted them on MySpace. (And you thought MySpace was just for kids!!) Silly you…

Cramer reports that in down turned markets, it’s absolutely critical for you to consider keeping your focus on a defensive strategy. For instance, maintaining sound financial focus would include assuring adequate health insurance coverage, as this happens to be a principal cause of bankruptcies.

The game plan now is ‘hunker down and do your homework’. So you need to play defensively during the times of economic downturns. If you have a little cash stashed, then play some defensive moves and consider all of the buys as snags from a fire sale.

At the heart of the matter, it’s a fact that we’ve been poorly directed by this country’s financial consultants; however, the choice to do nothing is not an option for us.

In uncertain times, it is an absolute necessity to continue divesting your spare dollars into your retirement savings plans. You need to do your budget using a must-find mentality and after you’ve covered the living essentials (including life, disability and home insurance) buckle down and buy yourself some sound investments on sale!

How long should you sit on your hands before you begin investing? Not long. But focus on capital preservation as you begin looking for the bargains. The trick to gaining value during volatility is focusing on diversification! And while it will not make you rich, it is the plan for capital preservation and stocking your balanced portfolio…

Although I’d rather not get into any specifics and want to disclaim that I have no financial interests nor investments in the following stocks. I’ll throw in some examples for those that may have missed them last night. So here are a few of Cramer’s Calls from last night’s program:

When it comes to the open market, focus on the basics like the food industry. People gotta eat no matter what it costs them.

Companies like K (Kellog’s) have dived into a bottom feeder price range. This is a company that is a true value buy. He recommends a buy and hold for one year considering you’ve just acquired a pure cash bloated business at a fire sale. K is this cheap because it took the hit with all of the hedge funds that happened to heavily own it. This is a perfect example of “the baby got thrown out wit’ the bath water”.

K is trading at 3 times earnings, which Cramer describes as an unheard of flea market price tag.

A bank that hasn’t screwed up and stays a good buy? BB&T Bank of New York, (NYSE, BBT).

That’s it. You make up your mind on what makes up a sound balanced portfolio as this is not nearly my specialty and it would be unwise for me to even consider wearing that cap! Have a great weekend and let’s get chatty….

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