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NEW YORK (TheStreet) -- Investors who are focusing only on Vladimir Putin are missing the point, Jim Cramer said on "Mad Money" Tuesday. When it comes to investing, profits matter. They always have and they always will.
That might seem like a foreign notion to many investors, however -- the Wall Street hedge fund machine isn't bound by logic. Cramer explained that big fund managers need to make money whether the market is going up or down, so they're constantly on the lookout for negative news as much as positive news.
A typical day for a hedge fund manager would start out in Russia, said Cramer. But without any bad news from Ukraine, the managers probably quickly turned to China. Unfortunately, there wasn't any bad news from China either, sending managers to scour the rest of the usual subjects, including Europe, Japan and the emerging markets.
But with a bad news shortage in most of the world today, that left managers to turn back to the good old U.S., Cramer continued. Housing starts and permits were right in line and the consumer price index showed only a modest 0.1%. Then, and only then, were fund managers convinced that today was indeed a good day to buy stocks instead of shorting everything.
And that is how the markets were able to rally, Cramer concluded.
Executive Decision: Jim Foster
For his "Executive Decision" segment, Cramer spoke with Jim Foster, chairman, president and CEO of Charles River Labs (CRL - Get Report), a stock that's gained 49% since Cramer last checked in back in May.
Foster said biotechs and big pharma companies continue to reduce their clinical testing infrastructure and Charles River continues to be there to pick up the slack, making acquisitions to become more responsive to clients' needs.
Foster explained that thus far Charles River has focused on later-stage testing with animals, but his company is now moving earlier in the drug discovery process to help companies make go, no-go decisions faster and eliminate wasteful spending.
Foster also said that just as technology is rapidly moving forward for humans, the world of animal testing is also advancing, allowing animals like mice to become "humanized," or able to respond to drugs more like humans would.