This article was originally published Feb. 12
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"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.
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
feeling very bloated.
Cramer: Obama's Stimulus Plan Is a Joke
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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
, which reported excellent results.
Cramer welcomed Thomas Joyce, chairman and CEO of
Knight Capital Group
, 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%.
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
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.
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.
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At the time of publication, Cramer was long Morgan Stanley, Goldman Sachs.
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