Cramer's 'Mad Money' Recap: Insana Sticks By His Call (Final)

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Jim Cramer welcomed colleague Ron Insana to the "Mad Money" TV show Friday to defend his recent gutsy call to sell defensive stocks and buy into banks, insurers and home builders.

On Thursday night's show, Cramer took issue with some of Insana's picks and pans, and tonight it was Insana's turn to fire back.

According to Insana, we've reached a secular bottom in a lot of areas in the market, and with so many stocks priced for failure, he said there are incredible opportunities for investors.

He said that the pain is not over for home builders like Toll Brothers (TOL Quote), Lennar (LEN Quote) and Hovnanian (HOV Quote), all of which Insana endorsed.

However, he said that in a portfolio with limited funds, he needed to make a choice to either stay with the yields from defensive names, or make a bet on the eventual secular trends.

Insana said he's standing behind his call, even if unemployment continues to rise. In fact, he said he would not be surprised to see unemployment reach 11%. But, he said, historically if you'd invested in the markets at the peak of unemployment, you have been rewarded handsomely. Insana expects this time to be no different.

So while Insana admitted he may be early in recommending the home builders, he said they are all priced for failure, despite the fact they're buying land at incredibly low prices and the likelihood of further consolidation is high.

Turning to the banking sector, Insana said simply that if the banks are not going out of business, investors have to own them. He said his position is not necessarily bullish, but he no longer feels the world is going to end for this sector.

Cramer told viewers that it's always good for theses to be challenged, as Insana did for Cramer at the market lows in 1998, and as he is again now.