TheStreet.com Staff
Click here for an archive of Cramer's "Mad Money" recaps.
Editor's note: The following is a recap of "Mad Money" that aired on Feb. 21, 2006. It was rebroadcast on April 17.
Jim Cramer spent the "Mad Money" show telling viewers why they should invest in companies that "pillage the earth" of its natural resources. Cramer said that while the strength in minerals, base metals, and in commodities in general has come from a strong U.S. economy, that isn't the full story. Industrialization in what he calls the BRIC countries -- Brazil, Russia, India and China -- is also contributing to growth in this sector. That industrialization is taking form in the growth and consumption of metals. If you want to build buildings, machinery or roads, you need raw materials, like iron and nickel and copper and rock, he said. Prices for raw materials have been increasing, and they could still go higher. "Not one of the BRIC countries is finished. In fact, they're just getting started," Cramer said. A caller asked Cramer if, when trying to make "mad money" off of commodities, it was better to invest in a native country -- like China or India -- or in a western country doing business abroad? Investors should stick with the companies that make their living out of mining and "we don't care about those host countries at all." The reason? "Because the financials of those host countries are suspect," Cramer said.
The Magnificent Six
Cramer then went on to share his six stock picks for making money off of the "bull market in minerals and their forceful extraction from the earth."
For Cramer, buying "best-of-breed" companies is still the way to go because in a bull market they should make you the most money. They have good balance sheets and good management.
Cramer's first pick was BHP Billiton(BHP Quote - Cramer on BHP - Stock Picks), the Melbourne, Australia-based company is the "Mad Max of mineral stocks." Cramer said. BHP is the second-largest producer of copper in the world, the third-largest producer of nickel, fourth in uranium and fifth in aluminum and also mines zinc. BHP is the No.1 seaborne supplier of coking coal and manganese.
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