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) -- It's easy to focus on what's wrong with the markets, Jim Cramer told his

"Mad Money"

TV show viewers Thursday. So why not focus instead on what's going right, like housing? "Housing is coming back," noted Cramer, "and it's going to take a lot of sectors with it."

Cramer said the housing market may have bottomed out in 2007, but things are finally beginning to change as homebuilders like

Toll Brothers

(TOL) - Get Toll Brothers, Inc. Report



(LEN) - Get Lennar Corporation Class A Report

are up 31% and 40% for the year, respectively. So with home builders finally starting to build more homes, investors need to ask, what else comes with that?

Home builders need materials, said Cramer, so why not look into a


(MAS) - Get Masco Corporation Report

TheStreet Recommends



(SHW) - Get Sherwin-Williams Company Report


Owens Corning

(OC) - Get Owens Corning Report

? All of these stocks are cheap.

Home buyers will need loans, so that's good news for

Wells Fargo

(WFC) - Get Wells Fargo & Company Report


US Bancorp

(USB) - Get U.S. Bancorp Report

, said Cramer. They will also need insurance, think


(TRV) - Get Travelers Companies, Inc. Report


While those may be the obvious plays, Cramer said there are plenty of other companies that benefit as well.

Time Warner


will provide cable service to many new homes while


(VZ) - Get Verizon Communications Inc. Report



(T) - Get AT&T Inc. Report

will provide phone service.

Cramer also touted retail, which does well when homes are increasing in value. He likes

Bed Bath & Beyond

(BBBY) - Get Bed Bath & Beyond Inc. Report

, along with

Home Depot

(HD) - Get Home Depot, Inc. Report



(COST) - Get Costco Wholesale Corporation Report

, a stock which he owns for his charitable trust,

Action Alerts PLUS.

Executive Decision

In the "Executive Decision" segment, Cramer once again sat down with Richard Pops, chairman and CEO of drug maker


(ALKS) - Get Alkermes Plc Report

, a company that expects to see double-digit revenue growth next year.

Pops said that the trend of big pharmaceutical companies losing patent protection for blockbuster drugs continues, which is excellent news for patients around the world as cheaper, generic versions are being proliferated to everyone. On the flip side, Pops said that the world's largest drug makers are getting very aggressive in their pursuits to replace those drugs and are snapping up smaller biotech firms to do so.

Pops said that Alkermes is now in the sweet spot; it's large enough that it has all of the resources it needs to make medicines, get them approved and manufacture them, but it's also not too big that bureaucracy slows its pace of innovation. That said, Pops also admitted that when it comes to marketing and educating doctors on new treatments, Alkermes has a better job to do.

One of Alkermes' most promising treatments is for alcoholism. Pops noted that unlike drug addictions, which are often treated with medications, alcoholism is often treated with counseling alone, which makes for an uphill battle to educate both patients and doctors that alternatives are available. Alkermes also has a promising drug in phase III testing for schizophrenia.

Cramer said he continues to like the innovation and growth at Alkermes, even if the company remains a speculative play, as it still has no earnings.

Hospitality Index

"Individuals can be better stock pickers than the pros," Cramer told viewers, as he revisited the Hospitality Index, a group of stocks created by restauranteur Danny Meyer in 2009. During the heart of the recession, Meyer theorized that companies focused on delivering outstanding customer service would outperform those that aren't. The Hospitality Index consisted of 17 stocks including

Whole Foods



Chipotle Mexican Grill

(CMG) - Get Chipotle Mexican Grill, Inc. Report



(AAPL) - Get Apple Inc. Report



(COST) - Get Costco Wholesale Corporation Report


(AMZN) - Get, Inc. Report


Since its introduction in 2009, the

S&P 500

has delivered a 65% return while the Hospitality Index returned a stellar 257% return with only one stock,

DreamWorks Animation


, posting a loss.

Cramer said it's easy to see why a $5,000 investment in these companies is worth $48,000 today, as all of them deliver a customer experience that's world class. Whole Foods posted the highest return among the 17 stocks, with Chipotle Mexican Grill and Apple rounding out the top three.

Cramer said the same things that have made these companies a success over the past three years still hold true today and are proof positive that someone with no knowledge of stocks can pick better names than professional analysts.

Lightning Round

Here's what Cramer had to say about the stocks that callers offered up during the "Lightning Round":


(HPQ) - Get HP Inc. Report

: "Wow. I don't like that stock at all. That stock can go lower, much lower."

Pan American Silver

(PAAS) - Get Pan American Silver Corp. Report

: "It's the best house in a shaky neighborhood. I don't want to own any miners, they're too dangerous."

Hercules Offshore


: "This is a dicey stock. If you consider it a speculative stock, I'll bless it as a long-term bet on oil."


(PRU) - Get Prudential Financial, Inc. Report

: "They don't have yield protection, which makes me nervous. Be very careful, but I like it."


(ZIP) - Get ZipRecruiter, Inc. Class A Report

: "The stock is down 25%. It hasn't seen a bottom yet. Let's look at it again between $6 and $9 a share."

Chesapeake Granite Wash Trust

(CHKR) - Get Chesapeake Granite Wash Trust Report

: "I don't want to own it right now. I think you can buy it lower."

Deere & Company

(DE) - Get Deere & Company Report

: "It's a good company but the commodities are weak. I want to be careful."

Off The Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the health of the markets using the

CBOE Volatility Index


, commonly known as the "VIX", or sometimes the "fear index."

Looking at a weekly chart of the VIX, Collins noted that it has patterns of spikes to the upside that correlate with market downturns between 5% and 10%. Looking at the VIX's recent action revealed an eerie similarity to the market downturn in early 2011.

Collins research called out the Relative Strength Indicator, or RSI, the stochastics and the CCI, or Commodity Channel Index, as all pointing to a coming upturn in the VIX in the near future, exactly as they did in early 2011. Additionally, the daily chart of the VIX also displayed a bearish "W" formation, further confirming the trend.

Cramer said that in today's markets, investors need to use every tool at their disposal, thus the technicals are warning investors to be more cautious going forward, as another 5% drop to the downside could be looming. "Keep your eye on the VIX," Cramer concluded.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer took a minute to praise


(CSCO) - Get Cisco Systems, Inc. Report

CEO John Chambers for his cautious outlook on the company's conference call this week.

Cramer said he's still not happy that Cisco continues to blindly buy back its own stock. The company bought 27 million shares at an average price of $20.28 a share this quarter alone, while shares now trade at a mere $16.81.

But despite this continued blunder, Cramer said that Chambers has engineered a world-class management team that delivers world-class solutions to its customers. The company is no longer bloated and it continues to vanquish its rivals as it continues to take share.

That's why Cramer said it was prudent for Chambers to become less bullish on the conference call. While everything is going right inside the company, outside factors, including decreasing government spending, are an issue that every technology company will need to address in the near future.

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here:

Scott Rutt






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At the time of publication, Cramer's Action Alerts PLUS was long COST, AAPL, USB.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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.