Why does everyone love $2 Stocks?

This week and next are the weeks where every little piece of garbage starts moving and running and you gotta feel like holy cow, the race is on.

Gary Smith, CEO of Ciena (CIEN) joins Cramer:

Cramer’s Summary: First I want you to understand that $2 stocks are different animals. They didn’t get to $2 because they want to be there. Ciena I think is too HIGH. I think it convinced no one today that the gap of profitability is about to be closed. $2 stocks like Ciena are guilty until proven innocent; I’m not ready yet to pull the trigger.

Bottom line on $2 stocks: I don’t like these stocks. They are foolish; for the most part you are going to lose money. They are the jokers of the hand and so few times do the jokers ever turn wild.

Major buying opportunity ahead!

PG, G, KMB, AVP, CL – If you are like me, always eyeing these best of breed names, you want to wait until the day when you hear the Kernan team saying they are cutting numbers. What I always like to do is not be in the stocks and then wait for that moment and get into the best of breeds cheaper. I think the numbers are too high for these. They all have huge exposure to overseas markets. Colgate, 72% of sales came from outside the U.S. Avon 71%, Gillette 62%, Proctor and Gamble 54%, Kimberly Clark 43%. The dollar has been on a romp and has been so steep so quickly that I think all of these companies’ sales could be fractionally lower than everyone’s thinking. If you own them now and can’t handle CNBC breaking a story with this information then ring the register. If you are like me though you want to build positions in these names as the numbers come down, wait four weeks until numbers cuts. I think its going to happen over the next three weeks. I believe the estimates could be too high unless the dollar dives which I don’t think is gonna happen.

Q: With strengthening dollar do interest rate stocks make sense here?

A: When the dollar gets strong we are willing to overlook a lot of what goes wrong. When you are lending out in weak dollars and being paid back in strong dollars that’s the play. I like Citigroup (C), Bank of America (BAC) and JP Morgan (JPM) as strong dollar plays.

BEATING THE RACKET: Cramer talks with Herb Greenberg of Herb Greenberg’s RealityCheck

Greenberg: With HANS you avoided losing money in a stock that could have potential problems.

Greenberg: CVS went from a YELLOW FLAG to a RED FLAG on my watch list. It has rising profit and falling cash flow. They are turning around, trying to make money by cutting costs. Comp store sales are still single mid digits. It has a history under somewhat different management of playing some games. LIFO, FIFO. Everyone else in the industry accounts for inventory differently than they do. They don’t return my calls and don’t like me.

Cramer: It reminds me of AZO, AutoZone. AZO, HANS, CVS – I come up with stocks that make people a lot of money.

Greenberg: AZO is getting their cash flow partly from debt. You and I disagree on this. Stocks and businesses are two different things. I do believe, for no other reason than it makes sense – that you’ll see the Sears Auto Center renamed AutoZone.

Cramer: Hallelujah!

Greenberg: Washington Post bought back no stock last year.

Cramer: HANS, I understand the yellow flag. CVS, okay. AZO – that one is for me.

I like companies that Under Promise and Over Deliver

Wal-Mart (WMT) constantly forecasts high and then drops the bomb.
SBC Communications (SBC) announced buyback very high and then announces an equity offering at the low. If you own SBC I think you should sell it.

In eight days we find out the stocks that’ll be included in the rebalanced Russell 2000 It’s a game I’ve tried to play multiple times, don’t be convinced by your broker to try it.

Disclaimer: I AM NOT JIM CRAMER. I sometimes write the summary in first person because my brain doesn't quite move fast enough to process and type at the same time, so please excuse that. This blog has no affiliation with Jim Cramer, CNBC, or Mad Money. If you'd like to contact Cramer email him at madmoney@cnbc.com, or call 1-800-743-CNBC. This is done for you and I to be able to better track and follow Cramer’s comments. The show goes by quickly so I try and catch as many keywords as possible for each stock because of this, ACCURACY IS NOT GUARANTEED but is however strived for.

NOTE: I've added today's closing price to each of the stocks listed below.

LU - 2.81 - Lucent Technologies Inc. - Charitable trust owns LU, under 2.90, I think it’s a buy
CMGI - 2.39 - CMGI Inc. - Above $2.50 ring the register, even though its profitable and has a billion in revenues
JDSU - 1.58 - JDS Uniphase Corporation - Buy this when HELL FREEZES OVER
NT - 2.76 - Nortel Networks Corporation (USA) - Wait three days until after thermonuclear war then buy it.
SUNW - 3.79 - Sun Microsystems, Inc. - I think its still moribund. This is not what I want it to do. I think they paid too much for StorageTek
CIEN - 2.41 - Ciena Corporation - I think its too high. Guilty until proven innocent. If you want China, go buy Starbucks or Intel. I want to own it at $2, $2.40 is too much

The Lightning Round:

ALEX - 44.1 - Alexander & Baldwin - BULL - bulk transportation and I like it
VDSI - 9.45 - VASCO Data Security International, Inc. - BEAR - no, get a better stock but keep energy
WOR - 16.95 - Worthington Industries Inc. - I think that's been at 17 since the ice age BEAR - I don't like any of the steel stocks either
ONB - 20.12 - Old National Bancorp - That's for me - BULL - What I'm looking for in a regional bank
CMA - 56.64 - Comerica Incorporated - Also like this regional bank
KEY - 33.02 - KeyCorp - Also like this regional bank
SBL - 11.19 - Symbol Technologies Inc - Jumping out the window - I've been selling it in my charitable trust
GTE - 3.38 - GlobeTel Cmmcnts Corp - I don't like it - VOIP - these are all the things that make me issue the SELL SELL SELL
HXL - 16.4 - Hexcel Corporation - BUY - BULL - cool industrial materials, right point in the cycle for that stock
F - 10.27 - Ford Motor Company - Ring the register - BEAR
BAC - 46.18 - Bank of America Corporation - BULL - That's for my, good yield, nice buyback
WTR - 28.08 - Aqua America, Inc. - BULL- water is in short supply, CEO Is one of my favorites
CVX - 54.97 - ChevronTexaco Corporation - Ring the register - a little tired of it here - like intermediate sized oils more than the majors here.
KRB - 21.3 - MBNA Corporation - No no no. Buyers of Metris
MSO - 25.55 - Martha Stewart Living Omnimedia Inc. - Its okay - BEAR - but at 22 I'll get after it on the long side
CREE - 29.99 - Cree, Inc. - I am a best of breed when it comes to semi's. Ring the register - sell it and pick up a little INTC that would be a good trade
OXY - 74.72 - Occidental Petroleum Corporation - Ring the register - take profits - did you see the insider selling in that sucker?
WYNN - 53.4 - Wynn Resorts, Limited - Someone's moving that up aggressively. Sell it and swap into Borgata or Trump
AMD - 17.05 - Advanced Micro Devices, Inc. - Swap out and go into INTC
NTAP - 29.33 - Network Appliance, Inc. - Stock should be lower after lousy quarter, sell it
SCHN - 23.47 - Schnitzer Steel Industries, Inc. - This should be sold here - I think its time has come and gone
DRL - 12.09 - Doral Financial Corp. - Did hell freeze over? Jump out of window - get out of that stock. I still don't understand how they are able to do that badly.
MSTR - 55.49 - MicroStrategy Incorporated - I don't want you in this stock - ring the register - sell it
AYI - 25.02 - Acuity Brands, Inc. - Pass - too hard for me
HAIN - 18.83 - The Hain Celestial Group, Inc. - Like that - BULL - think quarter should be good because of natural foods craze
DIS - 27.44 - Walt Disney Company, The - Like it, raised prices think it’s a good one
RIMM - 83.13 - Research In Motion Ltd. (USA) - We loved RIMM at 68, take some off the table here
CNT - 42.66 - CenterPoint Properties - Natural gas - BULL - not the best stock but a good company
CMRG - 7.34 - Casual Male Retail Group, Inc. - Men's Warehouse is better, JOSB is better than that - NO SELL IT
FORD - 19.6 - Forward Industries, Inc. - BULL - understand, it’s a very tight float
ACAS - 35.09 - American Capital Strategies, Ltd. - Greenberg doesn't like it. I think its okay but risky if Fed stays aggressive, take a little off the table
NOVN - 18 - Noven Pharmaceuticals, Inc. - BULL - technology seems sound. Worried about options strategies
TGT - 54.65 - Target Corporation - BULL - Best of Breed - I want everyone who is still in WMT to swap out and go into TGT
JBLU - 22.57 - JetBlue Airways Corporation - BULL - only airline I'll say positive things about
ARXX - 8.1 - Aeroflex Incorporated - BEAR - SELL SELL SELL
STX - 21.3 - Seagate Technology - Sell at 52 week high here. Ring the register
SONE - 4.5 - S1 Corporation - Playing in 1999, come on. How much money can one stock lose people BEAR
VAR - 36.96 - Varian Medical Systems, Inc. - Like this, BULL - fundamentals are good here
NAPS - 4.48 - Napster, Inc. - Personal Foul - Barely a company as far as I'm concerned - SELL SELL SELL - Bear
ERTS - 53.53 - Electronic Arts Inc. - BULL - you are three months away from salvation with ERTS, don't sell it here
DWA - 29.75 - DreamWorks Animation SKG, Inc. - Angry that Madagascar wasn't as big as expected - BEAR
DGX - 106 - Quest Diagnostics Incorporated - Best of breed lab play - BULL
RIO - 29.85 - Companhia Vale Do Rio Doce (ADR) - BEAR - you don't want to be in that one
IACI - 25.08 - IAC InterActiveCorp - BULL - I think you'll make money when they split the companies up
NXTL - 30.9 - Nextel Communications - Ring the register - not arbitrageurs
PSSI - 11.75 - PSS World Medical, Inc. - Like the company
CTHR - 21.5 - Charles & Colvard, Ltd. - Man, No. No. Not a great company. SELL it.

UHS - 59.23 - Universal Health Services - Just announced a buyback - good things happen to companies who know what they are doing
BEBE - 42.57 - bebe stores, inc. - Downgrade by analyst just the other day before 40%+ comp store sales - yikes!
SBC - 23.42 - SBC Communications Inc. - announced buyback very high and then announces an equity offering at the low. If you own SBC I think you should sell it.
WMT - 48.22 - Wal-Mart Stores, Inc. - Sell and swap into TGT
VNO - 78.65 - Vornado Realty Trust - BULL - They just made a giant acquisition, I think the stock is a buy here and that there is no top in real estate. If it were at 75 I'd be jumping up and down telling you to buy it now.
AWA - 6.15 - America West Holdings Corporation - SELL SELL SELL
PEET - 29.82 - Peet's Coffee & Tea, Inc. - Next starbucks? Give me a break
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