Cramer's 'Mad Money' Recap: Upside Action in AIG, Commodity-Linked Stocks

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NEW YORK (TheStreet) -- Investors looking to make money in the markets need look no further than the commodities, Jim Cramer told his "Mad Money" TV show viewers Monday. He said the strategy is simple, companies who need commodities to go higher are getting crushed while those who need commodities lower are thriving.

Cramer reminded viewers that there are a lot of places they could put their money. Bonds remain a dumb bet, he said, with continued low interest rates. Gold never goes out of style, he added, saying that gold remains the best-performing asset class over the past 11 years. Investing in commodities themselves isn't working, thanks to a slowdown in Europe and a stalled economy in China. But what about stocks that rely on commodities? That, Cramer said, is where the action is.

Take a company like Procter & Gamble (PG), a company that by many metrics delivered horrible results. The market's reaction? Essentially flat, thanks in part to the fact that Procter uses a lot of commodities and paid a lot less for them this quarter.

On the flip side, there's Cummins (CMI), a stock that trades in lock-step with commodity prices under the premise that if economies are slowing, there will be less demand for trucks. Cummins has been a one-way ticket lower, said Cramer.

Commodity prices are the key to the rally in the restaurants and apparel makers, said Cramer, and the reason why soft drinks, transports and even the housing-related stocks can head higher. If a company does well when commodities fall, then its stock is doing great right now.

AIG in Demand

Don't you wish there were big neon signs telling investors to "buy, buy, buy?" Well, Cramer said there was one this weekend, when a last-minute deal to offer a $5 billion secondary for AIG (AIG) priced at $30.50 a share, only to close at $31.84 and instantly make money for shareholders.

Cramer said that AIG, a stock he owns for his charitable trust, Action Alerts PLUS, is perhaps the greatest financial turnaround of our time, and that the demand for its secondary proved it.

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