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Cramer's 'Mad Money' Recap: Jan. 13

Scott Rutt

01/13/09 - 08:27 PM EST

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

"These are times that try a bull's soul," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.

He said he's baffled that all of last week's most loved stocks have become the most hated this week. "Why are people so astonished by the bad numbers," he asked?

Cramer said the only surprise in the markets is that people are actually surprised. At the end of 2008, he said, there was simply too much excitement in the markets, and the analysts were too positive. This week's moves however, simply brings things back to reality and back to a level where the markets make sense.

Cramer said KLA Tencor's (KLAC) earnings shortfall should have been expected. The departure of Seagate's (STX) top executives should have been expected, and Transocean's (RIG) order cancellations shouldn't have come as any surprise, he said.

Cramer said people should not have been surprised when Alcoa TICKER TYPE="EQUITY" SYMBOL="AA" PRIMARY="NO"/> missed its numbers because it's the worst run company out there.

Cramer told investors they need to "wake up" and start expecting the worst.

This market is creating opportunities, however. He said Caterpillar (CAT), he said, is a steal under $40.

He said also to consider NYSE Euronext (NYX), which now yields 4.9%, while new Cramer favorite Home Depot (HD) yields 4%.

"These are not damaged companies," said Cramer, "just damaged stocks."

Cramer: Ignore Oil and Tech

An Oil Gusher

Cramer continued "Chart Week" on Mad Money, with a look at the technicals versus the fundamentals.

Tonight's stock was ConocoPhillips (COP), a stock which he owns for his charitable trust, Action Alerts PLUS.

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Cramer said Conoco had a huge selloff in October, retreating from $65 a share to $45. This "climax" selloff is what the chartists look for, when everyone who wants out of a stock, gets out. Since then, the stock has been trading sideways, building a bottom and generating confidence that the stock won't go any lower. Thus Conoco, according to the technical analysts, is now a buy.

But Cramer said he's a believer in the fundamentals. Conoco is the third largest integrated oil company in the U.S., he said, and is now trading at the steepest discount ever to its peers, at 30%. The company also has a good history of buybacks and raising its dividend, he said.

Conoco's oil production should increase in 2009, said Cramer, and with oil prices low, the company's refining business should also enjoy better margins. The company trades at only 7.1 times its earnings, while historically it should fetch a multiple of 9.2 times.

Cramer's conclusion: the charts say "buy", but the fundamentals say "buy after Friday," when the company offers up its mid-quarter update.

Easy Choice

When it comes to cellphone makers, who's the cheapest? Cramer took a close look at Motorola (MOT), Nokia (NOK) and Research In Motion to find out.

BankingMyWay

Cramer said all three stocks are down hard from their highs, with Motorola down 70%, Nokia down 60% and RIMM down 50%. And while Motorola may be the cheapest stock to buy at $4 a share, it's the price earnings ratio that investors need to look for.

Research In Motion trades at just 12 times earnings, with a growth rate of 25%, while Nokia trades at 15 times earnings for only a 20% growth rate. Motorola on the other hand, trades at a staggering 72 times earnings, for a growth rate that may not even pan out in 2009.

Cramer said the choice is easy: Buy Research In Motion, hold Nokia, and sell Motorola.

He said its clear that if President-elect Barack Obama won't give up his Blackberry, there must be something to the company's products. The company has a broad product line that's taking share, he said.

Nokia, however, lowered guidance and is betting on a strategy that consumers will trade down to less expensive phones. This strategy has failed to work, as the company has been losing marketshare, with less than 6% unit growth expected in 2009.

Outrage of the Day

Cramer sounded off against the so-called "ultra" short ETFs, which he says are fooling the public daily.

Citing a recent article at TheStreet.com, Cramer said it's been revealed that these ETFs, which supposedly allow investors to short stocks with two and three times the firepower, simply don't work. "They generate losses even on the worst stocks in the market," he said.

Cramer said he feels shocked and betrayed by the government for allowing these funds to exist. He said the SEC needs to protect investors against misleading products, saying they need to simply be banned. "These funds must be stopped," he emphasized.

Lightning Round

Cramer was bullish on Ashland (ASH), Bristol-Myers Squibb (BMY), Kroger (KR), Dryships (DRYS) and Frontline (FRO).

Cramer was bearish on Corn Products International (CPO).

Check out the latest edition of "Cramer's Take on Top-Searched Stocks" on Stockpickr.

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

Read more of Cramer's Mad Money Lightning Round insights.

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