Mad Money Recap

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Cramer's 'Mad Money' Recap: Teflon Stocks

TheStreet.com Staff

If people want to make money in a market in which a brokerage house just reported a nearly $8 billion loss and in which their houses seem to be worth less each day, they should look to the "indestructible" and fast-growing stocks that worked in the 1990s, Jim Cramer told viewers of his "Mad Money" show Wednesday.

Merrill Lynch's (MER Quote) $7.9 billion writedown reminded Cramer of the gloomy market days of the 1990s.

Back then, he told viewers on his "Mad Money" TV show on Wednesday, most of the great American banks traded down almost every day because commercial real estate fell apart that year due to overbuilding.

Cramer doesn't see why anybody would want to own Merrill now, because in some ways the current environment is even worse than the 1990s. The federal government, he said, doesn't want to save residential real estate.

He called the companies that issue mortgages and those that insure mortgages, such as PMI Group (PMI Quote) and MGIC Investment (MTG Quote), "frightening." Cramer said he expects these stocks to continue to go lower.

In this kind of economic situation, Cramer said he tries to invest in companies with "incredibly rapid growth and in the indestructibles, the stocks that make money in almost any environment."

"What fits the bill now?"

Coca-Cola (KO Quote) and Altria (MO Quote), the latter of which he owns for his charitable trust, Action Alerts PLUS, are the indestructibles, he said.

Moreover, Celgene (CELG Quote), Inverness Medical Innovations (IMA Quote) and CME Group (CME Quote) have grown rapidly, said Cramer, who owns Inverness Medical for his charitable trust.

Out of them all, Intuitive Surgical (ISRG Quote) and Google (GOOG Quote) are the fastest-growing, he added.

Tapping The Health Foods Market

Apparently now that the hippie lifestyle is cool, people can start to make money off the vegetarians and vegans, Cramer said, as he commented on another chapter from Mark Penn's Microtrends: The Small Forces Behind Tomorrow's Big Changes.

"This is a huge growing market," he said, and the way to play it is with Hain Celestial(HAIN Quote), a distributor of natural and organic food and personal care products.

Food companies haven't had it easy lately and Hain's no different, Cramer said. But in its quarterly report, the company announced good guidance for next year. Generally speaking, Hain's customers are not sensitive to the economy and all of the company's products sell well.

Moreover, with the trend of increasingly more parents raising their children to eat organic and vegetarian food, Hain is poised to profit because it is the ultimate vegan and vegetarian brand, he said. "It is a BuyBuyBuy.''

VF Corp's New CEO

VF Corp (VFC Quote) has been on a run recently, which means there hasn't been a great opportunity to get into the stock, Cramer said. It pulled back today, but rallied along with the rest of the market.

The reason for its consistent earnings pattern is one person: the CEO, Mackey McDonald, he said. But now McDonald is handing over his position to the COO, Cramer said. While the Street seems to be uneasy about the transition, Cramer said he expects it will be "seamless."

"If ever a stock didn't deserve to trade down upon the CEO leaving, it is VF Corp," he said.

Cramer brought on VFC's McDonald to the show and asked the chief executive about his company's last quarter.

"We had a great third quarter, we projected a great fourth quarter and we raised guidance for next year," McDonald said.

Further, he said he believes VFC is different from most other apparel companies in that it has a "large and growing" international business and a successful track record of bringing in lifestyle acquisitions.

There's a lot of concern about consumer spending, and this has created volatility in the market, "but companies like VFC are winning like we did in the third quarter," McDonald said.

"Don't sell [this stock] for the [CEO] transition," Cramer urged. It is the only retail stock he said he wants to own, and suggested market players pick it up under $80. The stock closed at $82.27.

Mad Mail

In his "Mad Mail" segment, Cramer told an emailer that Intel (INTC Quote), Cisco (CSCO Quote) and Hewlett-Packard (HPQ Quote), the last of which he owns for his charitable trust, should all "creep up" over time. "They are city driver stocks," he said.

He told another viewer that margins are not and should never be considered cash. Further, being fully invested is not right in this market, Cramer said.

Responding to another mailer, athenahealth (ATHN Quote) counts as a health care play, he said.

Cramer said he likes the stock, and he believes its quarter is going to be good. At the same time, he advised buying only half of a position before its Nov. 1 earnings conference, because lately he said it's had some quarters that turned out to be not as good as he was expecting.

Lightning Round

Cramer was bullish on Intuitive Surgical (ISRG Quote), Oracle (ORCL Quote), VMware (VMW Quote) and EMC (EMC Quote).

Cramer was bearish on Superior Offshore (DEEP Quote), Corning (GLW Quote), Accuray (ARAY Quote), Compellent Technologies (CML Quote), Level 3 Communications (LVLT Quote) and Martha Stewart Living (MSO Quote).

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

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