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Jim Cramer's 'Mad Money' Recap: Markets Behaving Badly

Cramer was bearish on Petsmart (PETM), Cyrusone (CONE) and Intercept Pharmaceuticals (ICPT).

Cramer's Playbook

For the next installment of "Cramer's Playbook," Cramer's series that hopes to increase everyone's financial literacy, Cramer turned the focus to company sponsored 401(k) plans, answering the question, "should I invest in my company's 401(k) plan, or put my money to work elsewhere?"

There are many advantages, and disadvantages, to 401(k) plans, Cramer explained. 401(k)s grow tax deferred, and many employers offer a match, which is free money. Using the power of compounding, if you invested $5,000 a year starting at age 30, by the time you turned 60, your $150,000 next egg would have grown to over $511,000 given just a 7% annual return, Cramer explained.

But 401(k) investment options vary widely from employer to employer and many offer high or hidden fees that over time can put a serious dent into your returns. That's why Cramer advocated investing in 401(k)s only up to the employer match and only if the investment choices are acceptable. If not, invest in a self-directed individual IRA, where you're allowed to invest $5,500 per year.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer weighed in on eBay (EBAY) and whether activist investor Carl Icahn's view that the company should be split up makes any sense.

Cramer said eBay makes a good case that its auction business helps Paypal, its payment arm, grow and vice versa. But there's no denying that eBay's share price has been stalled for a year, severely lagging that of other payment processors including Visa and MasterCard (MA).

With eBay only delivering good, not great, growth, Cramer said he understands Icahn's view that splitting up the company would bring out a ton of value for shareholders.

Cramer said Icahn has a great track record of late, having invested in Netflix (NFLX) at $60 a share and Hain Celestial (HAIN) nearly $60 ago. That leads Cramer to think this activist may be onto something when it comes to eBay.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in LINE.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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