Cramer's 'Mad Money' Recap: Hip Won't Make You Rich

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Jim Cramer said that 708 new highs on Tuesday can't be wrong. That's how many stocks hit new 52-week highs today.

"And this is just the start," he told viewers of his "Mad Money" show on CNBC.

Indeed, he said that unusual groups are co-existing in this market -- oil, retail, technology, etc. "The unusual confluence should be celebrated," he said.

Meanwhile, Cramer cautioned viewers not to fall in love with pretty faces on Wall Street. Hollywood stocks like DreamWorks(DWA Quote) and Warner Music Group(WMG Quote) are examples, Cramer said, of companies that put on a pretty or hip face but don't have anything inside. There is more than just an exterior, Cramer said. There has to be something on the inside. And that's called the fundamentals.

Fact is, investors who fell in love with stocks such as DreamWorks and Warner Music had nothing to fall back on when parts of their businesses started to fall apart.

The takeaway, then, is that you want to own a stock with something on the inside. That's why you want to own technology stocks, Cramer said. You want to own tech names such as Microsoft(MSFT Quote), Cisco Systems(CSCO Quote), Motorola(MOT Quote), LSI Logic(LSI Quote), Skyworks Solutions(SWKS Quote) and Corning(GLW Quote).

You buy these, Cramer said, because the fundamentals are solid. To reiterate: Buying stocks because they are hip does not make you money. You should like stocks for real reasons, Cramer said. "Look past the shallow surface to see what works."

A caller asked Cramer if it's time to sell the large media stocks and buy the more specialized firms. Cramer said that the big media companies -- Time Warner(TWX Quote), Viacom(VIA.B Quote) and Disney(DIS Quote) -- are hard luck stocks right now, but investors should stick with them.

As for the drug stocks, especially the companies that are providing cancer drugs, Cramer said that you don't get scared of them until the HMOs stop paying for the drugs. The HMOs, Cramer said, might eventually stop paying for the drugs, but probably not anytime soon. As a result, he said that investors should not be afraid of high drug prices. As such, stay with stocks such as Genentech(DNA Quote) and Novartis(NVS Quote).