This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

'RealMoney' Radio Recap: Brand New Playbook

"The propensity to want to take profits after two beautifully up days cannot be ignored," Jim Cramer told his "RealMoney" radio show listeners Thursday.

"But my take right now is -- don't ring the register," he said.

This is because it's time for the U.S. equity market to play catch-up with the rest of the world because the Fed is going to stop raising interest rates soon, Cramer said.

When it comes to thinking about why a market does well or badly, you need to look at that country's central bank, he said.

Why did the Dow end 2005 down while the rest of the world rocked? Cramer said it's because the Federal Reserve raised rates more than a dozen times in a row, and that by the end of the year there was still no sign that they would let up.

But now signs, including the weak housing market, the recently released Federal Open Market Committee meeting minutes and well-placed articles saying that the monetary tightening may soon end have changed the investment playbook.

"When we see these signs, we must change the way we invest," Cramer said, telling listeners to move to a positive strategy from a neutral one.

He said that the banking sector cannot be ignored if the Fed is ready to let the overnight bank lending rate be.

He also said Dow Chemical (DOW) is a perfect example of a smart buy in this environment, and that people should be doubling down on the stock.

It's best-of-breed when it comes to plastics and the gold standard for many industrial companies, he said. But it's the fact that it's cheap that makes it a buy. Dow sells at 8 times earnings when the average company sells at 18 times earnings.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,025.65 -13.84 -0.08%
S&P 500 1,992.18 -0.19 -0.01%
NASDAQ 4,545.1080 +13.0040 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs