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There is nothing like panic to open up wide the floodgates of opportunity. Back in January, I promised I would try to look for the positive angle even when all about us is crumbling - a reformed bear of sorts. I kept my head during January's vicious sell-off, I called Japan a buy (or at least a "not sell"!) during the Livedoor dip, and I have dared to join the small, dark underworld calling for a bottom in housing stocks (even while I refuse to take off my bear costume - what a trick!). A genius I am not, but I have seen enough of the same pattern that it takes a lot to get me whipsawed along with the market's manic moods. So, when I saw the vicious sell off in Sherwin-Williams last week, I knew I had to at least take a look at the story. I could not bring myself to make an outright buy recommendation because I rarely advise you all to buy or sell anything - I encourage you to do your own homeowork using me as another point of reference (see my disclaimer here). But I did my best to point out the potential investing (or trading) opportunity. So, imagine my glee when I heard from TraderMike that Jim Cramer (Kramer as I like to call him) got right on the story with his Mad Money show on CNBC today (Feb 27, 2006). Jim typically knows a story inside and out, so even if you think he is wrong, you need to respect his analysis. Sure enough, he laid down an excellent bull case for Sherwin-Williams (SHW). I encourage you to read the summary for yourself if you can't see the TV segment on your TiVo, but I will add that if you dove into the middle of the falling knives of panic, the standard Kramer-induced pop might be a good opportunity to sell. But looking further down the road, SHW could pay off as the stock recovers toward pre-verdict trading levels.
I will reiterate that this is a company that has been around for 140 years, it makes real products that are now deemed safe for everyday use, the CEO scooped up some shares, and the company increased its dividend (please read my earlier missive for details). Even the intra-day technicals have suggested we got a wash-out of sellers over the past four days. This is definitely not to say that real harm was not done with lead paint back in the 1970s or so. And I will reiterate that all my opinion has come as the panic has unfolded - I have not tracked this trial. However, looking forward, all seems to point to recovery for SHW. Thank you Kramer for some validation - only time will tell though.
Now for a quick sidebar...speaking of validation, Kramer also indirectly validated a steel pick of mine two weeks ago or so: LSS. I owe all of you an update on this one given the burning and churning and general pain in the oil patch this month. Coming up soon!
Be careful out there!