Mad Money Recap

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Cramer's 'Mad Money' Recap: Hoosier Daddy

TheStreet.com Staff

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"Booyah, Hoosiers!" Jim Cramer bellowed to the audience for his "Mad Money" TV show Wednesday, which was filmed at Indiana University as part of his "Back to School" tour.

"The bears have gone into hibernation," Cramer said from Assembly Hall, IU's storied basketball arena in Bloomington. "They could have knocked the market down today but they didn't because of one thing: fear."

The bears don't want to miss out on money coming into the market from private-equity firms ... or the multiple rate cuts that are surely coming from the Fed ... or the multiple rallies that should happen as oil falls back below $60 a barrel, Cramer said.

No one wants to sell with all that going for the market, he said. "May the bears stay in hibernation until May so that the bulls can play."

That said, Cramer next welcomed Mark Cuban, the owner of the NBA's Dallas Mavericks and an IU alumnus, who ran onto the floor and hit a short jumper after Cramer fed him with a pass. Cramer asked Cuban if he would consider buying Tribune's (TRB Quote) Chicago Cubs.

"It's too early to tell," Cuban said. "You have to know what you're buying first ... and you don't say you're buying it until it's on sale." If Tribune were to approach Cuban after the baseball season, he said he would consider it.

The Mavs, he continued, have overall been a "great" investment.

When Cramer asked Cuban if he, like himself, believes in starting off early in the stock market, Cuban told the Indiana students, many of whom were graduate students at the Kelley School of Business, that the "dumbest thing" they could do is buy a stock. "Invest in equity you understand and you know better than anybody else," he said. "Improve your own value first."

Philosophically, Cramer agreed that it's a good move. But he said historically it has been good for people to get in the stock market early on.

Whenever people make a trade, there's someone else on the other side of that trade, Cuban said. "For every stock you have a reason to buy, they have a reason to sell," he said. But if your reason to buy is strong enough, then buy the stock, Cuban said.

Further, Cuban said he believes the stock market can keep rising. "It's about supply and demand," he said. With all the money coming in right now, Cuban said he believes the market is offering a great opportunity.

Cummins Hummin'

A stock that should make people "truckloads of money" is Indiana-based Cummins Engine (CMI Quote), Cramer said.

"It deserves a triple Back to School buy," he said. "This baby isn't cheap [$145 a share] especially if you're a student, but if you don't have that much money, buy just one share."

Cummins, said Cramer, has a story that can teach market-players "the single most important lesson" about stocks: "Wall Street is often, if not always, wrong." If people don't do their own homework, they're going to miss out on "way too many opportunities," he said.

Cramer called Cummins the "perfect local company" for home-gamers to invest in. Big investment banks don't send their analysts to Columbus, Ind., to check up on things as much as the locals could, he said.

"It was a stock no one believed in, but the money men were wrong," Cramer said. They expected a bad performance from the company this year and "sadly and stupidly," Cramer believed them. And the worst part is that at least the money men came to their own conclusions, but he listened to someone else's bad advice.

The Street believed that weak truck sales would mean weak engine sales for Cummins. While this turned out to be true in the U.S., sales from the rest of the world "saved" the company, Cramer said.

Right now, the stock's ratings are five sells, five holds and one buy, he said. "It has beat the Street too many times, don't let it beat you," Cramer advised. "This one should go up much, much higher."

IU Q&A

During a question-and-answer session, a student asked Cramer how he went from being a "small-time reporter" who used to cover murders to becoming a TV host and fund manager. Cramer said "luck was key."

He said he knows he has a "particular skill" dealing with the stock market, but that it doesn't go much beyond that. "I'm very lucky," Cramer answered. "I'm in a lot of right places at the right time."

Cuban said that when he graduated college in 1981 he had no idea what he was going to be when he grew up, if he ever grew up. But he was fortunate enough to go around and discover what he had a talent for and loved doing.

"You don't have to have all the answers when you graduate," Cuban said. "Don't be afraid to take chances, because now you have nothing to lose." Find out what you have the talent for and love to do and then work like anything to succeed, he said.

A student asked Cuban about his comments last year that it wasn't a good idea to buy YouTube [which Google eventually did] and asked him if he still believed that.

"It was never a question about whether YouTube was popular or not," Cuban said. "It's really easy for anyone here to create a really popular site if you steal all the content you can steal."

YouTube has been sued and has been unable to sign deals, Cuban went on to say, but the good news for Google is it can deal with it, without the controversy hurting the stock, he said.

Cramer called students, who take part in the Kelley school's Reese Fund, to pitch their favorite stocks to him. The fund was set up in 1986 with a $100,000 gift.

The first student offered Michigan-based motor-vehicle manufacturer Spartan Motors (SPAR Quote), calling it "money in the bank."

He said he liked that stock for three reasons. First, baby boomers "have dough ... and want to be outdoors," he said. For this reason, the demand for RVs has "shot through the roof."

Second, post-9/11 there has been a "huge" demand for firetrucks. Moreover, 54% of the firetrucks in the U.S. are at least 15 years old, and municipalities "don't want to be stuck with that liability." And lastly, it is a defense-spending play, Cramer said.

The second student pitched Rock-Tenn (RKT Quote). It has pricing power, it is paying down debt and has a huge share-buyback, the student reasoned.

Moreover, all the analysts "hate" the stock and "shorts are pressing their bets," he said. Plus, the company is going to beat numbers its next quarter.

The last student named Plantronics (PLT Quote), calling it the "worldwide leader in headsets."

The Reese Fund has already made a lot of money off the stock and it should continue to do so because there is a "ton of growth left for the stock," he said.

Cramer said all three are "controversial names," but it's OK because he likes controversy.

Lightning Round

Cramer was bullish on Consolidated Edison (ED Quote), WellPoint (WLP Quote), Celgene (CELG Quote), Gilead Sciences (GILD Quote), Genzyme (GENZ Quote), Abbott Labs (ABT Quote), Marshall & Ilsley (MI Quote), Dendreon (DNDN Quote) and Starwood Hotels (HOT Quote).

Cramer was bearish on DTE Energy (DTE Quote), Eli Lilly (LLY Quote) and MedImmune (MEDI Quote)

For more of Cramer's insights during the Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.