This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Cramer's 'Mad Money' Recap: Financial Innovation Kills Small Investors

Stocks in this article: JCPJPMAAPLPIRDFFBATLSCVXETN

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


NEW YORK ( TheStreet) -- We've seen the enemy and it's not who you think it is. That's what Jim Cramer told his "Mad Money" viewers Monday as he railed against the true enemy of individual investors' net worth: financial innovation.

Cramer said he's a big fan of innovation in other areas such as technology, where Apple (AAPL), a stock he owns for his charitable trust, Action Alerts PLUS , reigns supreme, and also in health care, where countless new drugs save lives daily.

But when it comes to your money, Cramer said financial innovation and engineering is not our friend. Whether it was the financial meltdown of 2008, the flash crash of 2010 or most recently the meltdown of J.P. Morgan Chase (JPM) and the botched Facebook (FB) initial public offering, financial engineering has taught us one thing, said Cramer -- it destroys nest eggs and the reputation of the markets.

Cramer called the swamped computers and botched trades surrounding the Facebook IPO a big black eye for the Nasdaq, a market that prides itself on its technology. Then there's J.P. Morgan, the bank that speculated using instruments so complex that even those who created them didn't see the risks until the whole thing blew up.

Cramer said that individual investors are not important enough nor powerful enough to stop these "advances" in investing. The banks' pull in Washington will ensure that lawmakers never question these tactics thoroughly, he said, which is a shame for those little guys who continue to get hurt by them.

'Udderly' Delightful Dean

With U.S. markets continuing to be held hostage by the woes of Europe, Cramer said investors need to stick with stocks that offer domestic security. When it comes to domestic-oriented stocks, nothing is more domestic than Dean Foods (DF), our country's largest purveyor of milk and dairy products.

According to Cramer, Dean Foods has transformed itself from an "udder" disaster to a world-class food company. It delivered a 10-cent-a-share earnings beat on a 5.4% pop in revenue, with increased operating margins to boot. Dean is also cleaning up its balance sheet and enjoying declining dairy costs, which are expected to drop by 20% in 2012.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

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