Search Jim Cramer's Mad Money trading recommendations using ourexclusive Mad Money Stock Screener and watch Jim Cramer's Mad Money Post Game videoexclusively on TheStreet.com.
NEW YORK (
) -- "Investors have paid a high price for being too negative," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday. He said that while the markets have had a remarkable run in 2009, those who were too negative were left in the dust.
Cramer recounted the three times this year when being too negative proved to be a costly mistake. He said the first inflection point was when the markets hit their lows in March. Back then, Cramer said even he was afraid to turn positive on the markets. But after a bottoms-up analysis of the
, he determined the lowest the markets could go was Dow 6,500, and the downside was just too limited not to be a bull.
The second inflection point came in May, when a flood of secondary offerings from the banks stopped the financial sector in its tracks. So many investors felt the markets couldn't rally without this key group and sold off in droves, Cramer said. But that too was wrong, as the industrials and the health care sectors picked up where the financials left off, and the markets again rallied.
Finally, there was late October, right after the market hit Dow 10,000. After a sharp pullback to Dow 9,600, investors again sold in droves, opting for the illusion of safety in U.S. Treasuries or bond funds. Once again, this move was costly, said Cramer, as the markets rallied once more.
Cramer said there are a lot of positives in the markets outside of just earnings. He said the housing market is stabilizing and China is pulling the whole world higher with its very successful stimulus. There's been surprising strength in all of technology, he said, as well as surprising liquidity, allowing countless companies to refinance and sure up their balance sheets.
Cramer said if 2009 has taught us anything, it's that people who left the markets in a panic were unable to get back in, except at higher prices. "Don't get shaken out," he said, "the right move is to buy on the dips, not sell."
Three Dividend Stocks
Investors looking for protection, security and income should forget about bank CDs and bond funds, Cramer told viewers. He said that stocks that pay high dividends offer all three, plus capital appreciation and a favorable tax rate.
Cramer recommended three dividend stocks including,
, a stock which he owns for his charitable trust,
Cramer said Altria is a steady, domestic tobacco company with over 50% market share in the U.S. cigarette market. The company also owns a 50% stake in SAB Miller Brewing and recently acquired
, giving it a 50% share in smokeless tobacco products. Cramer said over the last two decades, shares of Altria are up 504% if you include reinvested dividends.
Waste Management is another great dividend stock, said Cramer. In the trash game, it's all about pricing power, he said, and this company controls 30% of the domestic trash market. Waste Management is a consistent dividend raiser, yielding 3.8%.
Finally, Cramer recommended 3M, a company where 29% of its revenues comes from its culture of innovation, which is constantly pumping out new products. The company derives 70% of its revenue from outside the U.S., said Cramer, making it a global recovery play. 3M yields 2.5%, which is small by comparison, but the company has raised its dividend every year for 51 years.
Off the Charts
In the "Off the Charts" segment, Cramer went head to head with colleague
, a stock where it might be better to buy high and sell higher, rather than not buy at all.
According to Little, Amazon is in bull market mode, with its monthly chart taking out its all-time high set back in 2000, and doing so on strong volume. Little said the daily chart is also bullish, showing the stock breaking out in October and successfully retesting its support levels. Little feels Amazon is a buy right now, and would back up the truck under $126 a share.
Cramer agreed with Little's analysis, reiterating his $216 price target on the stock, $82 higher than where it trades today. He said the thesis is simple, ecommerce is getting stronger and Amazon is selling a lot more than just books and music these days. The company is growing at 25%, but Cramer said the estimates for what Amazon could earn are still far too low. Amazon is a buy, he said.
In the "Mad Mail" viewer feedback segment, Cramer told a viewer that he's still bullish on
Cramer told a second viewer that he's not backing away from
, but he hasn't been pleased with the stock's performance as of late.
In the Lightning Round, Cramer was bullish on
Nordic American Tanker
Hartford Financial Services
United States Steel
-- Written by Scott Rutt in Washington D.C.
To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC
Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by
For more of Cramer's insights during the Lightning Round, clickhere
At the time of publication, Cramer was long Altria.
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.