This article was originally published Feb. 25
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"Something remarkable happened today," an upbeat Jim Cramer told the viewers of his "Mad Money" TV show Wednesday.
He said that not only was there was an actual rally in the financial stocks, there might also be a ray of hope in the sector.
Cramer credited today's rally to a man he's dubbed "the comeback kid,"
Chairman Ben Bernanke. He said after two days of testimony to Congress, Bernanke has let traders know that the sky might not be falling after all.
Amidst the hours of typically uneventful testimony, Bernanke again told Congress that he's not a fan of nationalizing the banks, putting a damper on the rampant fears of Wall Street.
"Bernanke is a capitalist after all," said Cramer, who praised the Fed chair for offering at least some details of the government's plans.
Cramer was also elated to hear Bernanke talk of reinstating the uptick rule, which was put in place after the Great Depression, but recently repealed by former SEC Chairman Chris Cox. The uptick rule prevents short sellers from relentlessly beating down a stock by requiring an uptick, a moment of strength, before shares can be sold short.
Finally, Cramer said there was even more good news today. He said that FDIC Chairwoman Sheila Baird made comments that she may be considering another chapter from Cramer's recovery plan, forbearance. Cramer said in his mind forbearance, a tactic used in the 1980's S&L bailout, is exactly what the banks need today.
Cramer said after weeks of relentless selling and short selling in the financials, there might just be a little ray of hope on the horizon.
Cramer said despite recent weakness, every investor needs to go buy some gold. He said while the price of gold may slip to $900 an ounce in the coming days and weeks, but there's still a strong case to be made for gold, as well as a lot of ways to play it.
According to Cramer, gold was severely overbought, and he's not surprised at the sharp selloff. But with the euro getting killed, gold is becoming a more attractive investment for the Europeans, and that will start the buying frenzy again soon.
Cramer said there are a lot of ways to play gold. He's a fan of the
SPDR Gold Shares
He said investors can also call their brokers and buy gold bullion, or visit usmint.gov and look into gold coins. But no matter how you decide to play, Cramer advised buying in stages, buying one-fourth of a position Thursday, then continuing in increments as prices fall.
Cramer said investors can also consider the gold stocks, but he cautioned that gold stocks are like no other and use their own set of metrics. He said his favorite gold stocks are
, and now also
He said both of these companies are increasing production, lowering costs, are less sensitive to changes in the price of gold and have a low price/net asset ratio.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included:
Nordic American Tanker
Johnson & Johnson
Cramer called this mix of stocks the essence of diversification.
The second caller's top holdings included
Since he considers Google a publishing company, and not a tech, he says this portfolio is also diversified.
The third caller had
Johnson & Johnson
Las Vegas Sands
as their top stocks.
Though worried about Textron and Las Vegas Sands, he called the portfolio diversified.
The fourth caller's portfolio included
Research In Motion
Cramer identified two tech stocks with Microsoft and Research In Motion, but said he's not a fan of any of these companies and would throw the whole deck back and start with five new cards.
Cramer told a viewer that he sees no signs of stress at
Enterprise Product Partners
and he's still a fan of the master limited partnership, along with rival
Kinder Morgan Partners
, which remains his favorite.
Cramer told a second viewer that a recent change of heart on
Procter & Gamble
came after the company reported its horrible quarter. He said he's still a fan of the company, but not the stock.
Cramer was bullish on
International Business Machines
He was bearish on
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At the time of publication, Cramer was long Johnson & Johnson, Wells Fargo, ConocoPhillips and Caterpillar.
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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