October 30th - Cigarette Stocks CVX CAL AMR

Cramer started out talking about the proposed tax on cigarettes which could hurt but recommended cigarette stocks saying he thinks they will be left unharmed. He recommended Altria Group Inc. (MO) which will spin off into 2 different cigarette companies in late '07. He also named the following as good options:

Reynolds American Inc. (RAI)
Carolina Group (CG)
Vector Group Ltd. (VGR)
UST Inc. (UST)

VGR is the only one under $50 and closed today at $16.95 but I don't see any after hours trading to speak of. It is a low volume stock that offers a big dividend so it is surprising there is no activity. Maybe this one just doesn't trade after hours? Update: A few trades after hours now bringing the price up to $17.18, but hardly much of an increase. And keep in mind if anyone ever considers shorting for longer then a day....dividends must be paid by the short seller.

Next Cramer said Chevron Corp. (CVX) would be going on sale next week after the election and said it was a buy because they had such strong earnings and the OPEC cuts. CVX closed today at $66.39 so not only is it too expensive, but I also don't short oil (or commodity stocks) based on a Cramer recommendation. He is also saying NOT to buy until Thursday because that is when it will go on sale.

Finally Cramer took a look at the airline stocks and made some recommendations based on the fact people are jumping in to a bankrupt stock Delta (but said he coudln't comment on Delta but said it wasn't a good idea to buy bankrupt stocks). Cramer said Continental Airlines, Inc. (CAL) and AMR Corporation (AMR) are still buys in the sector. Both of these stocks had strong up days today likely due to the drop in oil prices. Cramer recommended CAL back on June 19th when the stock was trading around $27. It is currently trading at nearly $38. The stock didn't have a typical Cramer drop at the opening bell but was lower by the days end. This is basically a reverse play on oil which makes it basically a commodity play. If oil is down again tomorrow then these two stocks would likely go up. This takes away from the Cramer effect in my opinion and makes shorting here more risky.