Cramer's 'Mad Money' Recap: Feb. 12

Cramer said the recent rallies have been based on stimulus hype and a suspect tech sector.
Author:
Publish date:

This article was originally published Feb. 12

Click here for an archive of Jim Cramer's Mad Money recaps.

"Tomorrow is a wonderful time to ring the register," Jim Cramer told the viewers of his "Mad Money" TV show Thursday.

He said the market rallied today on the strength of two invisible pillars.

Image placeholder title

According to Cramer, today's late rally, along with all of its recent rallies, have been due to hype surrounding the economic stimulus package and strength in the tech stocks. Despite these "market movers," the market remains "treacherous," he said.

Cramer again slammed the stimulus package as nothing more than tax cuts, unemployment benefits and pork, none of which will do anything to save the economy. "The stimulus plan puts a mild depression right back on the grill," he warned.

Cramer said the stimulus plan does nothing to solve the housing crisis, nor anything to help unemployment, nor does it address the banking crisis. He scoffed at the additional $500 tax credit for buying a home as a joke.

Without a serious uptick in jobs, he said, large scale bank failures are looming. Cramer also warned the drop in home foreclosures is temporary and the worst may be yet to come.

Turning to the tech rally, Cramer issued words of caution, saying that the rally is unwarranted. The only real growth in tech, he said, is in smartphones, and that leaves stocks like

Cisco

(CSCO) - Get Report

,

Amazon.com

(AMZN) - Get Report

and even

Google

(GOOG) - Get Report

feeling very bloated.

Cramer: Obama's Stimulus Plan Is a Joke

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 10463664; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

Cramer told viewers they should sell into any strength tomorrow and stick with his accidentally high yielding stocks and the recession resistant names such as

Coca-Cola

(KO) - Get Report

, which reported excellent results.

Changing Cultures

Cramer welcomed Thomas Joyce, chairman and CEO of

Knight Capital Group

(NITE)

, to discuss his company's remarkable turnaround. The stock is up 16.2% year to date, while the S&P 500 has slipped almost 8%.

Image placeholder title

Joyce credited the turnaround to two things. First, he replaced the company's cowboy mentality with a culture similar to that of his former employer, Merrill Lynch, which was intensely client focused. Second, the firm embraced electronic trading and technology, which has been driving better results.

Joyce said it was especially disturbing to see the demise of Merrill Lynch, and to see many of his friends and colleagues lose their jobs. He attributed some of the recent insider selling at Knight to members of his team, including himself, being prudent and diversifying their investments after watching so many others lose everything.

Joyce said his company has ample cash on hand and is prepared for opportunities that may come the company's way. Cramer blessed buying Knight Capital, calling Joyce a great CEO.

On the Block

"Knowing when to sell is just as important as knowing when to buy," Cramer told viewers.

In his weekly "Sell Block" segment, he looked at the charts of

Life Partners Holdings

(LPHI) - Get Report

to see if this company makes the grade.

According to the charts, Life Partners has a one way ticket to the "house of pain." The stock broke out and rallied at the end of December, but then pulled back the week of Jan 9. Since then, the stock has fallen below its 10-week moving average, signaling a momentum stock that's lost its mojo.

Looking at the fundamentals, Cramer said now is not the time to get into Life Partners. With huge insider selling, and the company's products and executives both coming under scrutiny, Cramer said it's time to sell Life Partners.

Image placeholder title

House of Cards

Cramer welcomed fellow CNBC host David Faber to discuss his new special, "House of Cards," airing tonight on CNBC, which takes a deep look into what caused the global financial collapse.

Faber said the documentary shows how a credit crisis evolved into a stock market crisis, and then into a global economic meltdown.

Lightning Round

Cramer was bullish on

KBR Inc

(KBR) - Get Report

,

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

(MS) - Get Report

.

He was bearish on

Dryships

(DRYS) - Get Report

,

Dow Chemical

(DOW) - Get Report

, and

Astoria Financial

(AF)

.

Check out the latest edition of

"Cramer's Take onTop-Searched Stocks" on Stockpickr.

Image placeholder title

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

Read more of Cramer's Mad Money Lightning Round insights

.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was long Morgan Stanley, Goldman Sachs.

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.