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!

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

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

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 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

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