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People shouldn't take the fact that a lot of stocks went down today as a reason to sell all their stocks, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
When a stock that you want to buy goes down, that's not a bad thing, he said. Stocks are just like any other piece of merchandise.
Today the market threw a sale, and if market players don't use the weakness to buy or pick at some great stocks, they're missing out on making some mad money.
"Buy damaged stocks, not damaged companies," he advised, invoking Rule No. 4 of Cramer's 25 Rules for Investing.
"This selloff today damaged a lot of good stocks" whose underlying companies are good, according to their earnings.
The pullback's not a bad thing, he said, but at the same time it's good to know what will work and what will continue to get hurt. The difference between subjectivity and objectivity is what distinguishes what should work from what will likely not work right now, Cramer said.
On the subjective side, there are the homebuilders, lenders, suppliers, brokers and banks. These are the types of companies that could be sinking to new lows, he said. "Who knows what these stocks are worth?"
On the other side of the velvet rope are companies with "hard metrics," Cramer continued. Here there are the aerospace, minerals and mining, infrastructure, oil and oil services, machinery and agriculture sectors.
This objective side also includes the four horsemen of tech:
Research In Motion
There's a Rumor
On the subjective end of the line, "who can value the junk that's on
the companies' ledgers and may be hidden in their drawers?" Cramer asked. While the subjective stocks are difficult to value, the objective plays are possible to value, he said.
On the objective side, people can't rumor the stocks down. But on the subjective side, people have seen what "Rumorville" has historically done to stocks -- particularly in 1998.
In the little town of Rumorville, found on the Cramerica MapQuest, a few well-placed phone calls can cause investors to run from stocks, Cramer said.
"Did you see them run from
today?" He added that Lehman is not in trouble, but even if he screamed that from the top of the roof, no one would listen, Cramer said.
"You can't do that to the companies with hard assets," Cramer said. "I don't think anyone's going to rumor down an oil company. Try and knock down
Rumorville is an awful place, and people shouldn't want to live there, he said. If it's on the objective side, own it, but avoid the pain and stay away from it if it's on the subjective side.
Right now the bull is running wild in Europe, Cramer said. Continuing with his weeklong series on hot European stocks, Cramer told viewers it's time to take a vacation to Europe to escape the worries related to the U.S.
So far this week, Cramer's recommended
Royal Philips Electronics
from the Netherlands and Switzerland's
Today Cramer traveled to Germany, where the market is "kicking butt left and right." The Germans have a lot of good stocks, but what Cramer said he likes the best right now is
As little as 12 months ago, Siemens was an $80 stock. Now it's at $147, and it shouldn't stop going up anytime soon, he said. If the stock seems expensive, buy one share -- but do get into it, he stressed.
Siemens is the best conglomerate in Germany, which is known as Europe's
, Cramer said.
It operates in nine different segments, all on an "enormous" scale. Its exposure to infrastructure and building structures such as trains, airports and power plants makes it a "must-own." Siemens is also a green play, because it is one of the largest producers of wind turbines, Cramer said.
Currently there are some scandals surrounding Siemens, but "the media is hyping an issue that doesn't really matter," Cramer said. "Keep pimping your money to Europe" and consider getting into Siemens.
Am I Diversified?
During Cramer's "Am I Diversified?" game, the first player named the following five stocks:
Archer Daniels Midland
, the last two of which Cramer owns for his charitable trust,
Action Alerts PLUS.
Cramer called the portfolio 150% diversified.
The next caller asked if he was diversified with these five picks:
Nordic American Tanker
Sirius Satellite Radio
Cramer told the caller that he was too exposed to utility stocks and suggested that he swap out of Duke and get into a machinery or infrastructure play.
The last caller played the game with these five plays:
Chicago Bridge & Iron
Cramer called out a speculative pair in Nastech and Jones Soda. He recommended selling one of the two and picking up a health care name.
Go for a Spinoff
Fred Poses, CEO of
, joined Cramer on his show.
American Standard, Poses said, announced in February that it planned to spin off two of its three businesses. The remaining company will be in the air-conditioning and heating business, a "great" industry to be in, he said.
ASD's team, which has been at the company for about eight years, has worked hard to make these three better and stronger businesses, Poses continued.
At the end of the day, the three are not connected from a customer, manufacturing or technology standpoint, Poses said. "We think we will create more value for shareholders by splitting them up," he said.
For those who are disappointed that ASD went down a little, don't be, Cramer said. Instead, buy some more.
To view Cramer's interview with Fred Poses, please click here.
During the "Sudden Death" round, Cramer was bullish on
. He was bearish on
Cramer was bullish on
Cramer was bearish on
Johnson & Johnson
For more of Cramer's insights during the Lightning Round, click here
Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by
At the time of publication, Cramer was long Toyota Motor, Freeport McMoRan, 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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