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Cramer's 'Mad Money' Recap: Fed Wakes Up

TheStreet.com Staff

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"Today was the day the Federal Reserve finally blinked and woke up from its reckless stupor," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

"Today may be the beginning of the end of this nightmarish market," Cramer said before a special "Ladies Night" audience. Without Tuesday's emergency move, Cramer said the market could have dropped 1,000 points or even 1,500 points. He said more cuts are needed to turn around the markets.

With Tuesday's rate cut, though, Cramer sees some opportunities arising. He advised investors to exercise caution on bank stocks. While banks will be making more money after the Fed's action, he said they're still too difficult to invest in.

Instead, Cramer said investors should take any rise in bank stocks as an opportunity to sell. Cramer also said that he's becoming less bearish on the real estate market and may consider investing in foreclosed properties.

A member of Cramer's live studio audience asked about overseas markets and which countries would be the best to invest in. Cramer said that Brazil remains his favorite overseas market.

He still likes Banco Bradesco (BBD) and CVRD (RIO).

Another audience member asked Cramer about the huge decline in Apple's (AAPL) stock after it reported disappointing earnings on Tuesday.

Apple, he said, is becoming "too hard." Cramer recommended investors hold on to the stock if they already own it. Otherwise, he said they should consider Microsoft (MSFT), IBM (IBM) or Research In Motion (RIMM).

The Retail Stock to Hold

"Investors should buy retail stocks after the Fed gets aggressive," Cramer told viewers.

Cramer says investors usually get into retail stocks after aggressive cuts because retailers come out with high year-over-year expectations.

Cramer's standout retail stock is TJ Maxx (TJX). He says the retailer should profit from a slowing economy and aggressive rate cuts.

Cramer, who normally doesn't recommend discount retailers, says he admires the company's business model and its CEO, Carol Meyrowitz. While other retailers were struggling, TJ Maxx reported an increase in December same-store sales and recently raised fourth- quarter guidance, he says.

According to Cramer, TJ Maxx has brands people want such as Under Armour (UA), he noted. The company also has bought back $650 million worth of its stock and plans to purchase an additional $250 million by the end of this month.

The discount retailer is also a discount stock, Cramer notes. TJ Maxx trades at just 13 times next year's estimates, and Cramer sees as much as 36% upside to the stock.

Comments on Investment Ideas

Cramer listened to investment ideas from members of Smart Women Securities, a student-run investment club at Harvard University, his alma mater.

The first student asked about Flowers Foods (FLO). Cramer said he's concerned about rising raw costs at Flowers, but would do some research on the company.

Another student asked about EnerNOC (ENOC). Cramer said the company is a little dicey but likes the concept.

A third student asked about Pharmerica (PMC), a stock that Cramer said he needed to analyze more before commenting.

The final student asked Cramer about Clorox (CLX). Cramer said he wanted to pull the trigger on Clorox, especially now that it's under $60 a share.

Am I Nuts?

Cramer played "Am I Nuts?" with several audience members to evaluate their investment dilemmas.

The first player had retirement money in Yahoo! (YHOO) and wanted to know what to do. Cramer suggested selling Yahoo!, but not all at once, and staying more diversified.

The second player had a position in Celgene(CELG) and asked if it could be a long-term investment. Crmaer said he sees $8 to $10 of upside left in Celgene, but would not hold it long-term.

Lightning Round

Cramer was bearish on Diamond Offshore (DO), Shutterfly (SFLY) and BHP Billiton (BHP).

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

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