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) -- Blindly following celebrity investors based on what their quarterly filings say is a recipe for disaster, Jim Cramer told his "Mad Money" audience on Tuesday.

Cramer explained that the quarterly filings detail the buying and selling patterns of the big-time fund managers and celebrity investors like Warren Buffett. But Cramer said that doesn't mean it's a good strategy to mindlessly follow what these reports say.

First off, these reports show what investors have bought in the past. There's no way to know whether they still like those companies at today's prices. Furthermore, these larger investors surely aren't going to tell you before they sell their stocks, leaving you vulnerable. Plus, Cramer said that funds and those like Buffett buy and sell for all sorts of different reasons, most of which have no indication on whether a stock is good or bad.

But Cramer said the primary reason not to follow the big boys, they're often dead wrong. Cramer said that activist investors have showed interest in companies like


(CLX) - Get Report



(PEP) - Get Report

, but those stocks have not been particularly great performers. Neither has Buffett's stake in

Bank of America

(BAC) - Get Report

, which by the way included preferred shares, not the common shares that normal people can buy.

Cramer said its far better to watch for insider buying, executives buying shares of their own company. Executives are not allowed to flip their own shares, meaning that if they're buying, then they're in it for the long haul.

"Don't rely on someone else's homework," Cramer concluded, only you should control the investments that you make.

Beneath the Surface

Continuing his "Stock Supermarket" series, Cramer went shopping for telco companies, comparing the stocks of


(T) - Get Report

, a stock which he owns for his charitable trust,

Action Alerts PLUS, vs.


(CTL) - Get Report

, our nation's largest rural carrier.

Cramer said that on the surface, both AT&T and CenturyTel seem similarly priced, with AT&T trading at 12 times earnings with a 5.8% dividend and CenturyTel trading for 14 times earnings with a 7.8% dividend. But price multiples alone are misleading, said Cramer, which is why he instead used the PEG Ratio, a company's multiple divided by its growth rate.

Using the PEG Ratio, AT&T came back with a respectable 1.7. Anything over 2 is expensive said Cramer. Meanwhile CenturyTel's PEG Ratio is 12.4, making it insanely expensive.

Cramer explained that while CenturyTel is a mature, no-growth cash cow, that cow has the possibility of not providing milk. That happened to rival

Alaska Communications

(ALSK) - Get Report

, which recently announced it's reviewing its dividend payout, sending shares down 28% in just 24 hours.

CenturyTel delivered good earnings, said Cramer, but given the risk, is it really worth paying such a high PEG Ratio? Cramer said AT&T is far less risky and is only paying slightly less of a dividend.

Beer Wars

Cramer went head to head with colleague Ed Ponsi over the charts of the beer stocks, mainly

Molson Coors Brewing

(TAP) - Get Report

, a stock near its 52-week low,

Boston Beer

(SAM) - Get Report

, a stock near its 52-week high,

Anheuser-Busch Inbev

(BUD) - Get Report

, a stock stuck right in the middle.

According to Ponsi, the chart of Molson is problematic, with the stock stuck in a downward channel of lower highs and lower lows. Additionally, the stock is selling off on high volume, signaling that any rally is lying, and the stock is stuck under its 200-day moving average. Molson's relative strength indicator, RSI, indicates the stock has further to fall.

The chart of Boston Beer, however, Ponsi said is promising. After gapping higher on strong earnings, Ponsi said the stock is near a multi-year high. However the RSI shows that it may have run too far, too fast and is due for a pullback. Ponsi suggested buying on any weakness, not here.

Finally, there was Anheuser Busch, a stock in the sweet spot. Anheuser delivered a three-month high on Friday, but isn't hitting any resistance until $64 a share. The stock's RSI is also neutral, signaling that there isn't much in its way to get there.

Turning to the fundamentals, Cramer said he agreed with Ponsi. He said the beer wars have taken their toll on Molson and Boston Beer is just too pricey after it's big move higher. That leaves Anheuser, which is focused on its better beer brands and has terrific Latin American exposure. Cramer said that Anseuser deserves to trade at a premium.

Exciting Growth Prospects

In the "Executive Decision" segment, Cramer once again sat down with Alan McKim, chairman, president and CEO of

Clean Harbors

(CLH) - Get Report

, an environmental cleanup company whose shares are up 70% since Cramer first recommended it in June 2010.

McKim said that the natural gas industry in America is still in its early stages and Clean Harbors is excited about its growth prospects. He said that his company surrounds drilling rigs with equipment and people that help keep them safe and environmentally friendly.

McKim also noted that Clean Harbors deals with not only with contaminated water used in fracturing but also in the drill cuttings themselves, the dirt and rock that's excavated that can sometimes have naturally occurring radiation.

Clean Harbors is also committed to its work force, maintaining a booming lodging business for its workers in the field. McKim said that Clean Harbors is hiring and needs about 600 additional people. He said that overall, the natural gas industry will be a big opportunity for American workers as areas like the Bakken shale expand from 4,000 wells today to an estimated 40,000 in the future.

Another bright spot for the company is its incinerator business, where the company operates nine incinerators and handles about 70% of all U.S. capacity. McKim said that business is also growing and more and more companies outsource their incinerator operations.

Cramer continued his recommendation of Clean Harbors.

Lightning Round

Cramer was bullish on

Johnson Controls

(JCI) - Get Report


Deere & Company

(DE) - Get Report


Wisconsin Energy

(WEC) - Get Report


Chesapeake Energy

(CHK) - Get Report


Chipotle Mexican Grill

(CMG) - Get Report



(FLR) - Get Report


Jacobs Engineering

(JEC) - Get Report


Cramer was bearish on

Yongye Intl






Chicago Bridge & Iron



Closing Comments

In his "No Huddle Offense" segment, Cramer said that he doesn't have enough fingers to count all of the good things happening in the U.S. economy. He said that the data is so good and so varied that investors can't help but smile.

But Cramer also noted that we were in a similar spot last week, only to be taken down hard by news about Italy's bond rates. He said that we're in a "trust, buy, verify" mode where investors can believe in the good things that were happening, but they still need to temper those results against the latest news out of Europe.

"If we didn't have Europe, we'd be dramatically higher," Cramer concluded, "but alas, we do."

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here:

Scott Rutt






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At the time of publication, Cramer was long AT&T.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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.