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Mad Money Recap

Cramer's 'Mad Money' Recap: Bye, Bye Bears

Scott Rutt

07/30/08 - 07:40 PM EDT

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


"I'm sticking my neck out and calling the bottom," Jim Cramer told viewers of his "Mad Money" TV show on Wednesday.

With earnings coming in strong across the board, except in the financial sector, Cramer said the markets may finally be leaving the bears behind.

He said the negativity in the market is striking. He cited an investor intelligence survey, which indicated that only 30% of investors are bullish, while 50% are bullish on the markets. "It's always darkest just before the dawn," he said.

According to Cramer, Merrill Lynch's (MER) blueprint for jettisoning much of the company's bad debt is one positive sign that the markets may be turning upward. "We've been waiting for a blueprint, and that's exactly what they gave us," he said, noting that shares of the company rose 10.6% on the news.

Cramer also noted strength in such diverse companies as Clorox (CL), Cummins (CMI), Avon (AVN) and US Steel (X) as further evidence that the market is beginning to turn.

Furthermore, Cramer said with oil prices falling from $148 to $121 a barrel will continue to bode well for the markets. He predicted oil could continue to fall as low at $110 a barrel before finally stabilizing. With other commodities, like gold, also following suit, Cramer said many industries could continue to provide the market with upside surprises.

Cramer: What Merrill and Lone Star Aren't Telling You

Finally, Cramer called the Security and Exchange Commission's short-selling protection plan for the financial stocks "monumental," saying that the move will finally stabilize the financial sector. He also praised the Federal government's plan allowing banks to sell bad mortgages to the FHA for just 80 cents on the dollar.

"The next big dip in the market may be the last one," he said.

Ride the Blackberry Bold

Cramer proclaimed that August will be Research In Motion (RIMM) month, ahead of the launch of its newest product, the Blackberry Bold. "The iPhone isn't the only way to show off to your friends," joked Cramer, who called Research In Motion a steal at just $119 a share.

Stockpickr

Cramer based his Blackberry thesis on a number of new product releases scheduled for the next few months. In addition to the Bold, Research in Motion is set to release the Kickstart, dubbed the Motorola (MOT) killer, and the Thunder, which is said to be the first serious iPhone contender.

In addition to the new products, Cramer noted the company's further expansion into overseas markets. He was not concerned by Research In Motion's recent earnings guide-down, attributing the shortfall due to simply an increase in marketing and research and development costs for the many new products on the runway.

Cramer said he's also not concerned about Apple's (APPL) iPhone affecting the company's bottom line. "There plenty of room for both companies to grow," he said.

Finally, Cramer cited his past track record with RIMM as another reason to buy the stock. He said the company's shares have risen 117% since he last recommended the stock on June 6, 2007 at $53.04.

A Linux Treat

Cramer talked with Jim Whitehurst, president and CEO of Red Hat (RHT), a company which Cramer said he's never fully understood or appreciated.

Whitehurst said Red Hat has a special business model that no other competitors have. The company's large developer community provides it with great software at little cost, allowing Red Hat to have higher than average margins.

He further explained that Red Hat's Linux operating systems run in many large, mission critical applications where Microsoft (MSFT) just can't compete. He cited the NYSE Euronext (NYX) as one such large customer.

Whitehurst said that Oracle (ORCL) is a partner of Red Hat and not a competitor, saying that the company recently endorsed Red Hat as its operating system of choice.

Cramer called Red Hat an inexpensive stock when compared to its growth rate and recommended looking into the company as an investment.

Am I Diversified?

Cramer talked with callers about their portfolios. The first caller's portfolio included General Mills (GIS), Boeing (BA), Darden Restaurants (DRI), AT&T (T) and IBM (IBM).

Cramer said all five companies are very well run and called this portfolio "perfect."

The second caller's top holdings included Vivo (VIV), Dr Reddy's (RDY), Tata Motors (TTM), Coca Cola (KO) and Motorola (MOT).

Cramer called two of a kind with Vivo and Motorola. He recommended selling one of them in lieu of a defense contractor or large conglomerate.

Lightning Round

Cramer was bullish on Core Labs (CLB), Nordic American Tanker Shipping (NAT), Frontline (FRO), Verizon (VZ), Celgene (CELG), Panera Bread (PNRA) and Alcoa (AA).

He was bearish on Input/Output Inc (IO), Ford Motor (F), Double Hull Tankers (DHT), Red Robin Gourmet Burgers (RRGB) and Eastman Kodak (EK).


Has the stock market bottomed?

Yes
No

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