On tonight’s MAD MONEY on CNBC, Jim Cramer discussed why Wachovia (WB), Wells Fargo (WFC), and Bank of America (BAC) were all up big today; and some even higher than before the mortgage malaise started. His rationale is simple: the smart lenders that were strict will be rewarded once all this dust settles. There is a huge difference on these banks and there will be some day when Wells Fargo or another come out and say in a press release that they are taking a huge charge. Wells Fargo (WFC) is his top pick in the sector and he thinks that Wells Fargo will prosper on its own. He would even sell Washington Mutual (WM) to go into Wells Fargo (WFC). He thinks it has the best shot at weathering the storm and now that the little players are getting taken out it will win down the road. He likes Bank of America (BAC) as well in here, but he prefers Wells Fargo (WFC) with its huge share buyback plan still in place. Cramer was very careful to say to start buying these over the next couple of weeks to a month, not all at once and notjust piling in now.
On a huge recovery day, this Cramer call is easy to feel ok about. Otherwise we’d probably all be asking about catching falling knives.
Jon C. Ogg
August 16, 2007
Jon Ogg can be reached at firstname.lastname@example.org; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.