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Jim Cramer said that 708 new highs on Tuesday can't be wrong. That's how many stocks hit new 52-week highs today.
"And this is just the start," he told viewers of his "Mad Money" show on
Indeed, he said that unusual groups are co-existing in this market -- oil, retail, technology, etc. "The unusual confluence should be celebrated," he said.
Meanwhile, Cramer cautioned viewers not to fall in love with pretty faces on Wall Street. Hollywood stocks like
Warner Music Group
( WMG) are examples, Cramer said, of companies that put on a pretty or hip face but don't have anything inside. There is more than just an exterior, Cramer said. There has to be something on the inside. And that's called the fundamentals.
Fact is, investors who fell in love with stocks such as DreamWorks and Warner Music had nothing to fall back on when parts of their businesses started to fall apart.
The takeaway, then, is that you want to own a stock with something on the inside. That's why you want to own technology stocks, Cramer said. You want to own tech names such as
You buy these, Cramer said, because the fundamentals are solid. To reiterate: Buying stocks because they are hip does not make you money. You should like stocks for real reasons, Cramer said. "Look past the shallow surface to see what works."
A caller asked Cramer if it's time to sell the large media stocks and buy the more specialized firms. Cramer said that the big media companies --
-- are hard luck stocks right now, but investors should stick with them.
As for the drug stocks, especially the companies that are providing cancer drugs, Cramer said that you don't get scared of them until the HMOs stop paying for the drugs. The HMOs, Cramer said, might eventually stop paying for the drugs, but probably not anytime soon. As a result, he said that investors should not be afraid of high drug prices. As such, stay with stocks such as
( DNA) and
Cramer also spoke with Susan Demond-Hellmann, president of product development at Genentech. She outlined the company's prospects, and Cramer said that at $85 a share, Genentech is still a bargain and he would be a buyer here.
Finally, markets commentator Herb Greenberg said he is keeping his eye on
, a company he recently wrote negatively about. It's currently on his yellow flag list -- a stock to watch, Greenberg said.
Greenberg also said that he continues to think that investors need to be careful with
Cramer said that he wouldn't sell either of them, despite Greenberg's caution. As long as they are yellow-flag stocks, Cramer said that he's not a seller. There's no reason to take any action on either stock, Cramer said.
Cramer treated viewers to two Lightning Rounds on Tuesday night.
Lightning Round 1: Bullish
In the first round he was bullish on:
McCormick & Co.
ITT Educational Services
Healthcare Services Group
Automatic Data Processing
Johnson & Johnson
Dick's Sporting Goods
Research In Motion
He was bearish on:
International Flavors & Fragrances
Charles River Labs
Credit Suisse Group
J.P. Morgan Chase
Arizona Land Income
During the second Lightning Round, Cramer was bullish on:
Lightning Round 2: Bullish
Cramer was bearish on:
Vineyard National Bancorp
Bank of America
Interested in more Cramer? Check out Jim's rules and commandments for investing from his latest book by
. It's a series of articles from Cramer on how to become a better investor. The following table lists some of the rules that Cramer dissects.
At the time of publication, Cramer was long Boeing, Cimarex, Commerce Bancorp, GameStop, J.P. Morgan Chase, Lucent and Motorola.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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