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Monday, October 23, 2006

Cramer: Buy CAT (Again); Dump SLB & uy HAL

Cramer says it is always better to think about the future, but sometimes you have to go back to the tape to use history to predict the future.

He said caterpillar (CAT) was $69 Thursday and went to $59 Friday & SLB closed Thursday at $63 and then fell to $60...... He wants to focus on the business cycle.

Cramer said he is discussing the end of a cycle.

On CAT, the hit wasn't just because of a hit on missing earnings. He said that the end of their cycle may be here for a long time. He also said that the market knew about all the issues, but he said that this feels like the homebuilders did before a huge bottom (he reference TOL and LEN). He thought it was too negative and at this point in the cycle you have to look past the bad news; he likes it is a "BRIC" play (Brazil, Russia, India, China). He said he thinks if you hold it for 6 months you'll do fine. Even the downgrades give you a better in on the stock.

On teh oil cycle, Cramer went over Schlumberger (SLB). Cramer said the natural gas weakness issuer on the conference call became a feeding frenzy. He said the analysts want to rush to downgrade and the company doesn't have any worries. Cramer said you can sell SLB, and you can roll it over into Halliburton (HAL). He thought they posted a great quarter and is at a huge discount on share price and on valuation comparison. He also said you basically are getting the KBR unit of HAL for free.

Jon C. Ogg

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