Last week, we gave Inside the Market readers the opportunity to ask questions of Jim Cramer, the charismatic host of CNBC's Mad Money and former hedge fund manager who has just published a new book, "Get Rich Carefully." We posed several of these questions to him. The following are some of the questions and answers. We posted a second and final instalment of questions and answers on Monday.
Q: Booyah Jim. Just bought your new book and have read all your other books too. Few Canadians are adequately diversified since our home markets are largely banks, telecoms and resource companies. Any suggestions for us on how to round out our portfolios. Thank you, cjlawrie
Jim: First, I have to tell you that I do like the Canadian banks so much that I would have no problem owning one, with Toronto Dominion being one of my faves. Have to admire the conservative grit of Ed Clark. Canadian telco-resources, you don't need me for those. But how about owning the pharmaceutical with the best balance sheet in the world and fabulous growth prospects, Johnson & Johnson, run by Alex Gorsky, who has really cleaned house. And then marrying that with a solid growth stock that's actually cheap on the 2017 numbers, Google!
Q: What Canadian stocks would you tell U.S. investors to buy based on the criteria you put forth in your latest book? Rick Zabrodski
Jim: As mentioned I do like TD very much. It is an embarrassment of riches when you consider how well run Bank of Nova Scotia is, but I am not wild about the emerging markets, and BNS, while strong there, isn't where I want to be. I am a huge fan of the railroads and the restructured Canadian Pacific still has some good years ahead of it. Rogers has come down way too low, time to do some buying given its strong franchises and 4.3 per cent yield.
Q: Jim, we have seen some major market shifts over the last few months with the fall of the Canadian dollar and the recent underperformance of the TSX vs. the S&P-500 (reminds me of the 90's!). Do you think the commodities super-cycle is over, and should I be shifting my North American stock portfolio towards U.S. companies in spite of the recently much increased cost of U.S. equities priced in Canadian dollars? NewWest
Jim: With China slowing, Brazil in a punk, India fighting inflation and the emerging markets no longer expanding at a fast pace, the commodity super-cycle has clearly peaked. Even ag has slowed. You want to be owners of stocks that buy commodities, not sell them. The only commodity that I still like is oil and that's because of all of the new finds in the United States. I like restructuring candidates like Occidental and Chevron in the commodity sector.
Q: Booyah! Jim! Love your show. It is the single source of information and advice that guided me through the mess that started in 2008. Thank you!! What is your present opinion on the future of Blackberry? I have been trading it on a daily basis but should I start looking longer term at this beaten down Canadian stock? Hippotwits
Jim: I am impressed with the candor and energy of the new management team at Blackberry and believe that its subscriber list and intellectual property have a great deal of value but that it is fully reflected in the price of the stock.
Q: Hi Jim. I'm thinking of investing some of my daughter's education money in two Canadian companies - PotashCorp and Cameco. My daughter just turned two, so I am looking at a time frame of about 15 years, and would like to buy and hold if possible. Both of these companies are large players in their industry and well-managed, however they have endured some industry turmoil of late, creating good possible entry points. On the flip-side, I worry about long-term potash prices with the Russian cartel break-up; similarly with Cameco I worry about long-term reactor start-up and approval, and Cameco's ongoing tax fight with the Canadian government. What are your thoughts? Considering a 10-year plus time-frame, do you have other suggestions? Saskatoongent
Jim: I never want to get between a parent and a daughter—I have two of them!!—but I think you need to own good solid growth companies not commodity investments. It's very difficult for me to forecast the future of nuclear power post the Japanese nuclear disaster. Who knows how many more plants will actually be built. The ag business is so up and down. Why not buy your daughter something that she could become interested in early on, some shares of Disney or a Chipotle or even a Facebook or a Google, something she will be interested in as she grows up. Those are all great 10-year timeframe stocks.
Q: Booyah! Hey Jim what are your thoughts on the future of natural gas and ECA. My ACB is $18.30 should I: SELL SELL SELL. HOLD HOLD HOLD or BUY BUY BUY. Love your show. ItalianMafia7
Jim: Booyah right back at ya! Encana bit off more than it can chew. It's too low to sell but I have to tell you that I have not been impressed and vastly prefer many other oil and gas companies including Occidental, EOG and Noble. Encana, like Chesapeake, never seemed to care enough about the downside. Natural gas prices are probably going higher over time, but there's still a big glut, so just scale out of it over time-don't dump it all at once--- and go into a better, safer, oil and gas investment like the ones I just mentioned that have more oil than gas, which is the better place to be.
Check back with Inside the Market on Monday for more answers from Jim Cramer.
Darcy Keith