Cramer's 'Mad Money' Recap: Can Corn, Harvest Profits

Click here for an archive of Cramer's "Mad Money" recaps.

---

Despite a 110-point jump Wednesday, Jim Cramer warned viewers of his "Mad Money" TV show that not everything is safe to buy -- in particular, ethanol-related names.

In fact, it is time to clear out of the ethanol stocks as soon as possible. However, sell incrementally, Cramer advised, not dumping everything at once. The ethanol fad has come to an end, he said.

Today, Verasun Energy (VSE Quote) went public. This is the first sign you need to sell, he said.

Several other ethanol companies, like Aventine Renewable Energy, are also on the verge of going public, Cramer said.

Soon the market will be full of ethanol stocks, and the prices in this sector will go down. Ethanol stocks are nearing a period in which there will be too much supply and not enough demand. It is in its last stage of a speculative-stocks-fad cycle.

Market players saw this with the dot-coms in 1999, and the power-merchant and the oil-service names too, Cramer said.

Cramer started recommending ethanol on "Mad Money" with the highest quality stocks, he said. First there was Archer Daniels Midland (ADM Quote) and The Andersons(ANDE Quote).

Then there was MGP Ingredients(MGPI Quote). When MGP's COO, Tim Newkirk, was on the show Tuesday, he said there was too much hype and even potential overhype in the ethanol market. (To view Cramer's June 13 interview with Newkirk, click here.)

Investment bankers are in on the game, and the secret is out, Cramer said. They are creating too much ethanol-stock demand. Ethanol companies are not bad companies, but Cramer believes they are going to stop being hot for good.

"The bottom line is that ethanol has become too celebrated to make you any more money," he said. "Don't wait much longer than a week to sell it."