A viewer asked Jim if JDS Uniphase Corporation (NASDAQ:JDSU) is going to go up now that he likes Cisco Systems Inc. (CSCO). Jim panned the play saying that the fiber-optics unit at CSCO isn’t that part Jim is bullish on.

Jim talked about his views on if a stock should be sold, held, or bought on the new segment “Sell Block.” Jim often times tells his views not to trade investments but recently that strategy would have worked very well with Gymboree Corporation (GYMB) and The Children’s Place Retail Stores Inc. (NASDAQ:PLCE). Both stocks went up for the short-term after having good conference calls and had you bought and sold those stocks you would have made some big money. Jim now isn’t sure if both stocks will have a good back-to-school season. Jim recently recommended Coldwater Creek Inc. (CWTR) and now the stock is up big and he is advising viewers to ring the register. Jim is now very conflicted over Bristol-Myers Squibb Co. (BMY) after he predicted the stock would spike if the CEO quit. BMY is now in the news for a potential illegal deal with Apotex. The Justice Department is investigating the deal, but something doesn’t smell right, Jim said, adding that this stock is only worth owning if Dolan gets fired.

Jim was stressing that investors need to look at what money managers are thinking right now in order to make money. “When it comes to managing money, there are lots of rules, but only one commandment: Obey the business cycle,” Jim said. Jim thinks the best way to make money for the next three months is to look at supermarkets and drug stores to find winning stocks. Jim predicted that Kellogg Company (NYSE:K) and Anheuser-Busch Companies Inc. (NYSE:BUD) which he owns for his trust will both go up to $55. He also thinks that PepsiCo (PEP) and The Procter & Gamble Company (PG) will go to $70 and Merck & Co (MRK) will go to $50. In the supermarket sector Jim likes Groupe Danone (DA) and Tootsie Roll Industries (TR). Sure, there are other supermarket stocks, Jim said, but he doesn’t like betting on them. Jim thinks that William Wrigley Jr Company’s (WWY) bubble has popped and The Hain Celestial Group Inc (NASDAQ:HAIN) is too speculative. Instead, Jim said he likes companies such as Danone that have a huge international presence, and Tootsie Roll has been around too long for anyone to call it a speculative name. Perrigo is a generic drug maker, and although Jim said he doesn’t like generic labels, he believes that it would be a good buy if Fed Chairman Ben Bernanke crash lands the economy.

For plays on the drug store stocks Jim likes Chattem Inc (CHTT), Matrixx Initiatives Inc. (NASDAQ:MTXX), and The Perrigo Company (PRGO). Chattem makes Gold Bond and Icy Hot and Matrixx makes Zicam Cold Remedy. Jim thinks both CHTT and MTXX are both cheap and he isn’t worried about the lawsuits at MTXX.

Defensive Stocks
Once again today we were told that defensive stocks are the place to be. Johnson & Johnson (JNJ) bought Pfizer Inc’s (PFE) generic products unit and the price of JNJ fell but now the stock is at $64 and it looks to goto $70. JNJ has shown that it is recession proof. Kelloggs Company (NYSE:K) was also talked about as a stock he predicted would go higher. Merck & Co (MRK) may have lost its verdict on Vioxx 10 days ago and now the stock is above where it was before it lost the lawsuit. The Procter & Gamble Company (PG) and The Coca-Cola Company (KO) are also headed up. People buy their products regardless of how the economy is doing. Alcan Inc. (NYSE:AL) reported a great quarter recently but the stock is stuck at $45 since last month. Honeywell International Inc (HON) who deals in aerospace, also reported a great quarter. Nobody wants these stock right now, in three months they will go up but not right now. The housing business is weak and people are pausing because they are discouraged.

Sector/Stock Talk
The housing sector is in trouble and this will cause a ripple effect. Williams Sonoma Inc (WSM) was beaten down because they have too much merchandise. Right now nobody wants to fix their homes up. IBM (IBM) was once a stock that was once up and down but for a long time it has been stagnant. The acquisitions they have made have made no sense. They have made 12 this year alone in an attempt to revitalize business but they can not develop their own products. The buyback acquisitions will do nothing for the company. Look to buy Computer Associates (CA) or Oracle Corp (ORCL).

On Demand
The “On Demand” stock of the week was Arch Coal Inc (ACI). Coal will become more and more important to the U.S. over the next six to 10 months. Once again calling the U.S. the “Saudi Arabia of coal.” ACI and Peabody Energy Corp (BTU) are the two best plays. Pull the trigger when ACI hits $30.

Caller Questions
UST Inc. (NYSE:UST) was referred to as possibly the best stock he was asked about this week. A defensive stock. UST will go to $60 according to Jim. Shaw Group Inc (SGR) is a “worst of breed in infrastructure.” Dump SGR and buy UST. Ring the register on China Mobile Ltd (CHL), China is an unstable place to invest. Move from Nordstrom Inc (JWN) and move to J.C. Penny (JCP). Burlington Northern Santa (BNI) is your way to ship coal and ethanol, even though they are your worst of breed in this sector, Jim likes them. Now is not the time to be in rails but the Jim called on CSX Corp (CSX) is a rail he recommended. Corning Incorporated (GLW) was asked about. The inventory build that was reported by Circuit City Stores Inc (CC), Best Buy Co Inc (BBY) and 3M Company (NYSE:MMM) has been worked off and GLW should rally. You are told to buy on pullback.

You still have time to buy fast rising staples like Campbell’s Soup Company (CPB). Fears of economic slowdown have bumped up the soup, soap, and drug companies. This should continue for at least three more months. CPB has gone up in the face of a downgrade. Jim said “when your house does badly, you switch to Campbell’s Pork & Beans.” Price to earnings multiples should continue to expand because mutual funds are not selling these stocks. Kellogg Company (NYSE:K) was also mentioned as a stock they hold onto. Drug maker Eli Lilly and Co (LLY) has “unbelievably great” multiple expansion to the point that they sell at a premium to a faster growing Amgen Inc (AMGN). R.R. Donnelly & Sons Company (RRD) was talked about as a “perfect private equity kind of deal.” The yellow pages publisher is looking at offers and they reinforced that a deal will be made. RRD has twice its substantial cash flow and carries no debt so they are a desirable target. Do not rule out Valero Energy Corp (VLO). This is a big refiner that holds a meeting Thursday. Anyone who needs exposure to oil may want to look to VLO.
Toll Brothers Inc (TOL) may give investors a “house of pain.” A housing slowdown and possible recession led to the conclusion that their may be more selling of this stock.

Bullish:
Texas Instruments Inc (TXN), Exelon Corporation (EXC), TXU Corp (TXU), Sirius (SIRI), Andersons (NASDAQ:ANDE), Comcast Corp (CMCSA), Essex Corporation (KEYW), Manulife Financial Corp (MFC), Allstate Corp (ALL), MetLife Inc (MET), Pediatrix Medical Group Inc (PDX), Chicago Mercantile Exchange (CME) and Oshkosh Truck Corporation (OSK).

Bearish:
Analog Devices Inc (ADI), Shanda Interactive Entertainment Ltd (SNDA), Verasun Energy Corporation (VSE), Vimpel-Communications (NYSE:VIP), Prudential Financial Inc (PRU), NuVasive Inc (NASDAQ:NUVA), Zumiez Inc (ZUMZ), Intel Corp (INTC) and Target Corp (TGT).

In the “Sudden Death” round, Jim was bullish on General Motors Corp (GM) and Becton Dickinson & Co. (BDX).

He was bearish on SonoSite Inc (SONO) and Omnicare Inc (OCR).

Jim welcomed Morton’s Restaurant (MRT) Chairman and CEO Thomas Baldwin to the show and asked him why the stock has not done anything. “We reported record revenues, strong earnings and we’re managing our business well, and we believe the stock price will follow the results,” Baldwin said. When Jim asked if gas prices have affected business, Baldwin said that the company is “focused on the high-end consumer, and we haven’t seen any decline because of these macroeconomics factors. All the right things are happening in our business.” Although this stock “mystifies” him, Jim said he wants to own Morton’s because under $16, “it makes too much sense” to do so.

First caller:
Merrill Lynch & Co (MER), Allegheny Technologies Inc (ATI), Microsoft (MSFT), Tenaris SA (NYSE:TS) and Ultra Petroleum Corp (UPL).
Jim didn’t bless this portfolio because Tenaris and Ultra Petroleum make an oil pair. He recommended throwing out Tenaris and picking up a health care stock.

The next caller owned Goldman Sachs Group Inc (GS), UnitedHealth Group Inc (UNH), Bristol-Myers Squibb Co (BMY), Starbucks Corp (NASDAQ:SBUX) and ExxonMobil Corporation (XOM)
Jim said he liked the portfolio and blessed it.

The last caller had the following: Altria Group Inc (MO), MasterCard Incorporated (MA), J. Crew Group Inc (JCG), Anheuser-Busch (NYSE:BUD) and Schlumberger (NYSE:SLB).
Jim called it a “gorgeous portfolio.”

Jim owns Bristol-Myers Squibb, UnitedHealth Group, Goldman Sachs, Anheuser-Busch and Altria for his charitable trust.

Jim was out with more bullish comments on Cisco Systems (CSCO). He thinks the stock is about to break out and explode up to $25 before it could cool off. There was time when Cramer said he hated Cisco as it was a “do-nothing relic from the tech bubble that couldn’t get its act together.” Jim thinks that has totally changed now. It’s time to buy Cisco because it is in the house of pleasure, Cramer said. The company recently reported its first better-than-expected quarter in two years and “shocked the world with its good numbers,” he said. Jim likes that CSCO has become more diversified and is now the go to company for the telephone sector and cable sector. Jim sees CSCO as the winner in the fight that pits the phone companies vs the cable operators. Broadband is what makes CSCO the winner. Jim compared CSCO to Apple Computers Inc (AAPL) right after Apple came out with the iPod. For Cisco the iPod is Scientific-Atlanta, which it recently acquired, he said. The company has made some brilliant moves, he said.

Jim was out with bullish comments on Time Warner (TWX). He feels that if TWX becomes a pure play in cable and spins off other business units it could explode to $26. Currently Jim thinks the company is soo bad that it should be called “Time Goner.” He also thinks the company needs to get rid of CEO Richard Parsons. The company is not going to be boosted by Carl Icahn’s attempts. Instead, Parsons needs to realize that his ace is his cable business and throw everything else out, Cramer said. This move would make Time Warner jump to $26 a share. Jim thinks that the cable business is the triple threat with cable, phone, and Internet and these three key segments are the future. Jim really ripped on the AOL division calling it worthless and saying that the company should sell it now. Jim thinks if they sell it that would be worth $2 to the stock. He also thinks management should dump the Filmed Entertainment and HBO parts. These units could be sold to Viacom Inc (VIA) and increase the stock $7. Also if they spin off the cable networks to CBS Corporation (CBS) the stock could go up an extra $6. Finally, Jim believes that the company should turn its magazine business into a charitable trust. “Everyone wants a pure play,” he said. “The only decent pure play here is Time Warner’s cable business. That’s why it should spin everything else off, Jim said.