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NEW YORK (
) -- "We're in a global economy, where individual sectors are no longer held captive by their old leaders," Jim Cramer told the viewers of his
TV show Wednesday.
He said while the bearish pundits believed the markets would teeter on the earnings from
, two stocks which Cramer owns for his charitable trust,
Action Alerts PLUS, the markets had other ideas.
Cramer explained that there was no pin action from the so-so earnings from these two companies because the markets are now global, and they take their cues from many places. He said "we're rewriting American investing history," adding the old investing mottos and strategies simply no longer apply.
Cramer said the markets were instead taking their cues today from the rising rise of copper and gold, along with the rising price of grain. He said it was taking cues from the strong earnings of railroad
, which is signaling rising global economic activity.
Cramer asked, who needs Intel, when the markets are getting strong earnings from
, another Action Alerts PLUS name. Who needs JPMorgan when the markets have
Cramer said he can't blame the bears for their old beliefs. In the old stock market, they rang true every time. But in today's market, the bears just keep looking silly.
Continuing his weeklong series featuring biotech companies with blockbuster drug potential, Cramer recommended
, a company working on a non-invasive test to detect colorectal cancer.
Cramer said that only 40% of new colorectal cancer cases are detected early, in part to the reluctance of patients aged 50 and over being reluctant to get regular, and often uncomfortable, colonoscopies. He said the survival rate for colorectal cancer is 91% if detected early, but only 11% if the cancer is not found until it spreads throughout the body.
Enter Exact Sciences, with a new colorectal cancer test that only involves mailing a stool sample to a lab. The test is currently preparing for Phase III clinical trials and is likely to seek FDA approval in 2012. While Exact Sciences' test is not a replacement for colonoscopies, given how many patients avoid the test, Cramer said it could be a $1.2 billion opportunity for the company.
Shares of Exact Sciences have risen a hefty 83% in the last few weeks, and Cramer told viewers not to be greedy, while still saying that the stock is attractive ahead of an Oct. 29 conference where it will provide updates on its testing.
Cramer said Exact Science should be considered a speculative stock, given that the company is likely to issue five million new shares in the coming months, and given that a 2012 approval is still a long way off. However, he said that the potential for this test is enormous, which makes the stock attractive.
It's time to buy aluminum maker
, Cramer told viewers in a sparkling outfit made from aluminum foil. He said Alcoa's quarterly results were not only a thing of beauty, they were also truly significant.
Cramer said normally, the notion of Alcoa being a bellwether stock is simply ridiculous, but this quarter's conference call is a "must read." He said Alcoa painted a picture of end markets that are clearly on the upswing, including aerospace, automotive and even trucks and trailers, with strong demand being seeing around the globe, from Asia to Europe to South America.
According to Cramer, the earnings estimates for the aluminum maker had simply gotten too low, making the company's six-cent-a-share earnings beat on revenue up 15% a cinch. He said the company has reduced its surplus, is seeing pricing holding firm and has earnings visibility for the first time in a long time.
With shares of Alcoa trading at a 15% discount to their historical averages, Cramer said pointedly, "Alcoa doesn't belong this low."
Am I Diversified?
Cramer talked with callers to see if their portfolios have what it takes. The first caller's portfolio included
Cramer said UnitedHealth has to go, because it's too similar to Abbott Labs, and the portfolio needs an industrial stock.
The second caller's top holdings included
SPDR Gold Shares ETF
iPath Copper ETF
Cramer said Freeport and the copper ETF gave this portfolio too much exposure to copper, and one had to go.
The third caller had
Las Vegas Sands
Advanced Micro Devices
as his top five stocks.
Cramer said this portfolio was properly diversified.
Cramer was bullish on
Bed Bath & Beyond
Energy Transfer Partners
Cramer was bearish on
Johnson & Johnson
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Intel, JPMorgan, Apple.
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."
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