This article was originally published Feb. 4
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"In this hard market, only the strong will survive," Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
He rolled up his sleeves to point out example after example of companies getting it right, and companies getting it wrong.
Cramer said when times get tough, strong companies get stronger and take market share from their weaker rivals. He said companies like
are getting it right, by capitalizing on the strength of their brands.
He said that contrasts with the earnings results of
Procter & Gamble
, which left little to be desired.
In the banking sector, Cramer said companies like
, a stock which he owns for his charitable trust,
Action Alerts PLUS, are talking about repaying the TARP money they borrowed, while others like
Bank of America
talk about needing more TARP money. "These differences are meaningful," said Cramer.
In manufacturing, Cramer said
reported fabulous quarters.
On the flip side,
Cramer said these differences show up in every sector, including technology, cell phones, healthcare and even the oil stocks. He said it's never been more clear that playing entire sectors is not the way to invest. He said to "stick with winners who know how to execute," and "leave the rest to everyone else."
Cramer: Don't Believe the China Doomsday Talk
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Outrage of the Day
Cramer pleaded to SEC Chairwoman Mary Schapiro to ban UltraShort Financial ProShares (SKF), which he calls a sham of an ETF, saying it doesn't work and is hazardous to its users and the market as a whole.
Cramer said the SEC needs to act like the FDA, which has the power to pull any food or drug that it finds to be hazardous to its patients. He said the SEC also has the power and should exercise it to save the market from SKF.
SKF, said Cramer, is designed to be a hedge against the bank stocks. As banks decline, the fund should skyrocket, with every $1 invested in the fund yielding $2 of shorting power. Today SDK, which once traded at $262 a share in December, trades just $128 a share during what should be the best time imaginable for the fund.
Cramer questioned the purpose of the fund, if it loses half of its value at a time when its supposed to capitalize the most. He called the product simply irresponsible and said it only makes the health of the financials worse in the process. He urged the SEC to just ban it.
A Question of Coupons
Cramer talked with Botox-maker
Chairman and CEO David Pyott to find out if that company is among the strong or weak in its sector. The company recently reported ts earnings, beating Wall Street estimates by 3 cents a share on declining revenue.
Pyott said Allergan's strength comes from the diversity of its products and the strength of its R&D pipeline. He said all of the company's businesses remain strong, with six new products under review with the FDA.
Pyott called many of the new products great traffic builders in a difficult economy. He noted the company has turned to coupons and other pricing discounts to help keep that traffic strong.
Cramer said he wasn't sure about Allergan, despite the company's long history of delivering and his trust in Pyott as CEO. He said the difficult economy and the coupons are making him nervous. He said "don't buy" on Allergan for now.
Am I Diversified?
Cramer spoke with callers and reviewed their portfolios to see they have what it takes. The first caller's portfolio included
Research In Motion
Bank of America
Cramer said all of these names were good, except Wyeth, which he said to take profits and get out.
The second caller's top holdings included
Johnson & Johnson
Cramer blessed this portfolio as "absolutely what we're looking for."
Cramer was bullish on
He was bearish on
Banco Bilbao Vizcaya Argentaria
Green Mountain Coffee Roasters
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At the time of publication, Cramer was long Johnson & Johnson, Goldman Sachs.
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