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Thursday, October 19, 2006

Cramer Liked the J&J Conference Call, and the Stock

Cramer evaluated listening to conference calls. He pointed out the Johnson & Johnson (JNJ) did nothing after the earnings report, but he said itrallied $4.00 after its conference call because it changed peoples' minds. He thinks you should buy JNJ.

He said you can't just trade off the headline from the press releases. He said sometimes companies will telegraph that the street estimates are too low and they often outline why. He said you have to listen for confidence in management. If they are solid then that is often good, but it is bad if they are sheepish.

He said you got an "A+" message from JNJ after the conference call and you have to see how long they take in between a question and their answer. You also have to worry if management appears unorganized or if management is evasive or won't answer. He said if a company gets hit on guidance, you have to figure out if they were just being conservative to avoid liability. You want to see if they underpromise and overdeliver.

He also likes to look for outlying information like new products or new operations that can make analysts go in and recalculate numbers. He said JNJ right at the top got rid of the overhanging gimmicks to stop the bears from being able to question them.

He says it is going to $74.

Jon C. Ogg
October 19, 2006

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