This article was originally published Feb. 2
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"Put your money in tech and you 'will' get burned," Jim Cramer warned the viewers of his "Mad Money" TV show Monday.
He said there was no basis for today's rally in the tech stocks, and he predicted the tech stocks will likely give back much of today's gains over the next 48 hours.
"In Nasdaq we do not trust," said Cramer, who explained that today's rally, along with several others earlier this year, have all been on the heels of positive news from just four companies:
Research In Motion
But Cramer said these rallies are completely unfounded given that tech, outside of these four names, is doing terribly right now.
With the rare exception of
, a stock which he owns for his charitable trust,
Action Alerts PLUS, Cramer said the tech sector's problems are sizeable.
He said that while their woes may pale in comparison to that of the banks or the oil stocks, tech is definitely in as bad a shape as retail or the industrial names.
Cramer explained that tech is a zero sum game, and that positive news from Apple doesn't equate to rival
. Likewise, he said, strength at Google doesn't mean strength for
. And he said
strong earnings will not lift the rest of the semi's.
Another reason not to own tech right now is history, said Cramer. For 17 of the last 18 years, tech has underperformed the averages from February through September. Why would this year be any different, he asked. He said he wouldn't even consider tech until the fundamentals improve.
Cramer: Look But Don't Buy
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A Gas Stock That Works
"We've been burned speculating on natural gas stocks," Cramer told viewers. He said that while the country was enamored by the prospect of a cheap, clean fuel to bridge the gap to renewable energy last year, natural gas turned on a dime, leaving the whole industry in ruins.
But now, he said there's one gas stock that's worth investing in, with or without help from Washington.
That stock is
Fuel Systems Solutions
, which has fallen 36% since his last recommendation on Aug. 31, and it doesn't need Washington to work. "This time, it's different," said Cramer.
Fuel Systems makes parts for natural gas powered vehicles. And while natural gas might have stalled in the U.S., the European Union still has a mandate for 20% of its new vehicles to run on natural gas by 2010.
Cramer said Fuel Systems already gets 77% of its sales abroad, and with the company recently doubling its capacity ahead of demand, it's the natural choice to growth into the EU, and other, markets.
In the U.S., Cramer said Fuel Systems will ramp quickly on any news that Obama is more friendly to natural gas than he appears. The company, which once was as high at $61 a share, is just over $23 a share, trading at just 11.3 times its earnings with a long-term growth rate nearly double that.
Cramer said Fuel Systems is a consistent earner, beating earnings guidance for the last four consecutive quarters. He warmed investors not to chase the stock and use limit orders.
In a special interview, Cramer again welcomed author and restaurateur Danny Meyer to the show, for a follow-up on his 2007 book "Setting the Table." Meyer last appeared on "Mad Money" on Jan. 25, 2007, when he recommended
as a stock to watch, while shunning coffee giant
for losing its customer focus.
Since then, Chipotle has fallen 16%, less than the market average, while Starbucks plummeted 72%.
Meyer introduced his new "Hospitality Index," a basket of companies dedicated to the principles outlined in his book. He said that "service" simply means delivering on what you say, while "hospitality" is about how you make your customers feel.
Meyer said that while in the short run, being a hospitality focused company may cost more, in the long term, cutting back on employees and goodwill can be devastating.
Meyer said in times of recession, the last place a company should cut back is on their employees. He said hospitality focused companies don't look at market share, but instead focus on the depth of loyalty of their employees and customers before their shareholders.
Meyer singled out companies like
as four examples of hospitality done right.
When asked for an update on his Starbucks call, Meyer said the company can indeed turn itself around, but it will likely take a long time and is a tall order.
Cheaper Prescription Costs
Cramer talked with
Medco Health Solutions
chairman and CEO, David Snow, about a recent
Wall Street Journal
article detailing the benefits of mail order prescriptions as a means to cut healthcare spending.
Snow explained that in addition to saving patients 10% by ordering prescriptions by mail versus at retail, mail order prescriptions can also save taxpayers up to $300 billion by more efficiently managing chronic and complex conditions.
Snow said that at the local pharmacy level, pharmacists might not know about prescriptions filled at other pharmacies or prescribed by other doctors. He said patients are served better and more efficiently by Medco because it centralizes its operations.
"Stability is the key," said Snow, especially for patients with chronic and complex illnesses. By centrally managing such conditions, patients can avoid costly trips to the emergency room.
Cramer recommended Medco as a great play on the trend toward a more cost efficient healthcare system.
In the Lightning Round, Cramer was bullish on
Varian Medical Systems
He was bearish on
International Game Technology
Las Vegas Sands
American Capital Strategies
Check out the latest edition of
"Cramer's Take onTop-Searched Stocks" on Stockpickr.
Want more Cramer? Check out Jim's rules and commandments for investing by
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 Qualcomm.
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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