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NEW YORK (
) -- "Occasionally you need to show some courage if you're going to beat the market," Jim Cramer told the viewers of his
TV show Tuesday.
He said it's stupid to back away from great stocks just because others may be panicking.
Cramer said there was no shortage of negativity in today's markets. Whether it was concerns over North Korea, the bailout in Ireland, Chinese interest rate hikes or falling home prices, Cramer said the bears always have a case to be made. But, he asked, if any of these issues are new and whether they affect every stock or just a handful.
Cramer said the problem is that the bears never get penalized for being wrong, and the bulls never get any credit for being right. He said there's an asymmetrical litmus test that only serves to scare smaller investors. "You need courage to buy into a weak market," he said.
When looking at the market today, Cramer said he wouldn't be a buyer of Chinese stocks, nor the Spanish banks or anything related to housing. But, he said, he would be a buyer of the stocks he highlights on "Mad Money," stocks like the recently mentioned
, or railroad
Cramer said he's not a seller on days like today, he's a buyer.
In the "Off The Charts" segment, Cramer went head to head with colleague John Roque over the charts of the financial stocks, a sector that was showing signs of life after the election, but has now once again taken a turn for the worse.
According to Roque, when looking at a chart comparing the performance of the financials versus the
it's clear to see that the financials have broken down over the past few weeks, sliding below their 40-week moving average.
Roque also noted that the financials still make up 15% of the S&P, while historically they've only accounted for 12% of the average. Roque felt that the financials will sink below that historical average before beginning to recover.
Cramer also cast doubts over the group, saying that year end selling pressure buy hedge funds and mutual funds will wreck havoc over the group until January. He said investors are tired of losing money, and there's a widespread belief that the banks still need more capital to be on a solid footing. He said without a catalyst, there is little to like about the banks.
What does all this mean for the broader markets? Cramer said that looking at a longer term chart, going all the way back to 1994, it's clear that the broader markets can rally, even if the financials are not. In 1999, for example, the financials underperformed, but the markets rallied. In April, 2007, the markets rallied for three months after the financials took a nosedive.
But Cramer noted that eventually the markets will need leadership from the financials. He said he may have to change his stance on the markets come January if the banks are not showing at least a glimmer of hope for the new year.
Fabulous FADS CAN
"The mechanics of the market are on your side," Cramer told viewers. He said with so many hedge funds and mutual funds trailing the averages, they'll be piling into the momentum stocks from now until year's end, trying to close that gap.
Cramer said that's just one more reason to own his "FADS CAN" portfolio of the best secular growth names, stocks like
, which he also owns for his
Action Alerts PLUS portfolio,
Chipotle Mexican Grill
Still need more reasons to own these names? Cramer said Oprah endorsed three of them when she added products from Apple, Deckers and
to he "favorite things" for 2010.
Cramer said the key to any portfolio is flexibility, that's why he added F5 and
to list and replaced
three weeks ago. He said since that change, Amazon and F5 are up on average 11%, while Intuitive and Express Scripts are down 1% along with the major averages.
Cramer told investors they too need to stay active and follow their winners into years end. He said never be afraid to let the losers go.
Waiting for Congress
In the "Executive Decision" segment, Cramer spoke with David Demers, CEO of
, one of the leaders in natural gas engine technology.
Shares of Westport are up 51% since Cramer first recommended it on Jan. 4, but have stalled since Cramer last spoke to Demers on June 3, as the country awaits natural gas legislation from Congress.
Demers said it's hard to believe the natural gas industry has been waiting for two-and-a-half years for incentives from Congress to convert diesel trucks to cleaner, cheaper and domestic natural gas. He said the economics are clear, with most truck fleets seeing paybacks on their investments in as little as six to twelve months. Demers said the shift toward natural gas is happening, albeit slowly.
When asked about China however, Demers said that country's natural gas industry is booming. He said the U.S. could still take the lead in technology and development, but it' ll need to get moving soon to do so.
Demers said the natural gas industry would bring hundreds of thousands of jobs to the U.S. He said natural gas is a fabulous story, and its an exciting time for the industry.
Cramer said he's stunned at how the U.S. could lag the would in natural gas adoption while at the same time sitting on the world's largest supply of the fuel. Westport, he said, is definitely a buy.
Cramer was bullish on
Enterprise Products Partners
Energy Transfer Partners
Tiffany & Co
He was bearish on
Packaging Corp of America
Cramer gave his highest praise to
CEO Mickey Drexler, adding him to his "Wall of Fame" list of the very best CEOs.
Shares of J. Crew are up an astonishing 402% since Cramer first recommended the stock on Dec. 1, 2008. He said Drexler is often the subject of short-term criticism, but over the long term, no one has done a better job in retail. Cramer said Drexler remains one of his idols, and he salutes his performance on the heels of the company's $3 billion buyout.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long 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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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.