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
TheStreet Open House

Cramer's 'Mad Money' Recap: Time to Change Your Strategy

Stocks in this article: ICONRHTOLATRCLDXBTUMARFFDXTSLA

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


NEW YORK ( TheStreet) -- Buying stocks just because they have big dividends is over, Jim Cramer told his "Mad Money" TV show viewers Wednesday after the market reacted to the latest musings from the Federal Reserve.

Cramer said what will work best from here on out will be those companies that do better as the economy does better.

It may seem confusing that the markets now view the Fed's bond-buying program as a bad thing after rallying on the same news for the past four years. But that is what's happening, he said. The markets have lost faith that the Fed's artificially low interest rates will be enough to slow a growing economy.

Even today, as the Fed pledged to keep rates low, those same rates inched still higher. That means housing-related stocks and those with big dividends will be among the biggest losers, as they now once again have competition from bonds, which offer less risk than stocks, said Cramer.

On the flip side, Cramer said stocks that grow as the economy grows -- stocks such as the industrials, the banks and tech -- will be the places to invest as it's now clear the economy is moving forward, with or without Fed intervention. Big dividends can't offer enough protection anymore, Cramer concluded, so investors need to change their investment strategy starting tomorrow.

Executive Decision: Neil Cole

In the "Executive Decision" segment, Cramer sat down with Neil Cole, chairman, president and CEO of Iconix Brands (ICON), purveyors of 33 well-known brands such as Joe Boxer, Umbro and Peanuts. Shares of Iconix are up 35% so far in 2013.

Cole said that some of Iconix brands are known worldwide and have been around for over 100 years. He said Iconix has been able to acquire these brands and now makes royalties from the products that leverage them.

When asked how the company was able to acquire a brand like London Fog, Cole explained that in that case, Iconix was able to buy it out of bankruptcy and already had $40 million in licensing deals ready to go before the company even took ownership of the brand. Other brands, like Umbro, were doing well but languished as part of larger companies. Cole said Umbro had 800 employees but under Iconix' model it now only has 20, with the manufacturers taking on most of the risk.

1 of 2

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!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

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