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NEW YORK (
) -- "There are too many indicators contradicting each other," Jim Cramer told the viewers of his "Mad Money" TV show Wednesday.
"And that makes it feel like someone's lying," he continued. Cramer likened the market's recent action to a game of "Clue," where the only way to win is to find out who did it.
The market seems to be a flurry with contradictions, Cramer said. If demand in China really is slowing down, why are oil prices so high? If Treasuries are signaling deflation, then why are gold prices skyrocketing? If Spain and Greece are imploding, then how can the euro be showing strength?
Cramer said all of these contradictions make at least some sense. He said gold is up because that's what happens in times of economic uncertainty and chaos. He said the euro is rallying because the European financial crisis now seems manageable. And oil is strong because China is a lot stronger than anyone realizes.
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Perhaps the only thing that doesn't make sense, Cramer told viewers, is the
, which is trading in binary fashion based on the unemployment data of the day. But here to, Cramer said there is an explanation. He said that despite the fact that the S&P500 is comprised of 500 individual companies, some of which don't depend on unemployment, the index trades in lock step, thanks to ETFs and high frequency trading.
Cramer said the market's new dynamics are puzzling, but they also create opportunities. He said that some companies in the index are now far too cheap, and yield far to much, making them irresistible. Among his favorites are companies like
All of these companies, he said, are ripe for the picking, thanks to the the whims of big money managers and confusing market dynamics.
Delivering the Goods
In an exclusive "Executive Decision" segment, Cramer spoke with Alan Mulally, president and CEO of
, a stock that's climbed 435% since Cramer first recommended it on Dec. 9, 2008. Ford today announced that it's repaying $4 billion in debt, ahead of plan.
Mulally said today's announcement proves the company's plan is working. He said Ford is focused on building a complete family of best-in-class vehicles under its namesake Ford brand. He said the company is delivering the cars Americans want, cars with exceptional fuel economy, technology and value.
Mulally said that when Ford first restructured itself three years ago, it rebuilt its relationships with dealers and suppliers, and accelerated development of its new vehicles so that they'd be ready when the economy turned. He said the fruits of that restructuring has been not only great new products, but also an improved balance sheet.
When asked why the company decided to pay down its debt with cash, rather than stock, Mulally explained that Ford believes in "profitable growth for all," including its shareholders. He said shareholders are key to the company's success, and they deserve a decent return on their investment, which is why the company's preferred shares will receive all accrued dividends, with interest, once the company reinstates its dividend.
Mulally concluded by saying that despite the slowest recovery in America's history, Ford is now profitably making cars right here in the U.S., as well as in the rest of the world. He said that profitability has been the foundation of the company's success.
Banking on Overseas Growth
Cramer spoke with Ken Powell, chairman and CEO of
, a stock that's been struggling since it last reported earnings, despite boosting its dividend.
Powell said that General Mills had a very good quarter, with 5% growth in the U.S. and 6% overseas. He said the company is optimistic about the new year, adding he is seeing good sales growth. He said some analysts worry about inflation, but he said that inflation can be managed and even offset by productivity and the easing of promotional pressures.
Powell also cited international growth as a key to General Mills' success. He said while one quarter of the company's business is already overseas, General Mills is still in the early innings, with lots of opportunities in not only China, but also in India, and even in the U.K. and France.
When asked about the company's dividend boost, Powell said that General Mills likes to grow its dividend with earnings, and the recent boost catches the dividend up with recent growth, and also shows their confidence in their business. Powell noted that General Mills has paid a dividend for 111 consecutive years.
Finally, asked whether the company's investments in marketing and advertising is keeping private label brands at bay, Powell confirmed that recent efforts have translated into incredible loyalty and is helping to drive top line growth.
A Flurry of Innovation
Continuing his series of "gloom-busting" stocks where business is getting better, Cramer highlighted industrial giant
, which he said is taking control of its own destiny.
3M today issued a positive pre-announcement with strong sales for the quarter growing at a 16% to 18% clip. The company is taking market share and is expanding into new markets. Analysts recently called the company "a forest fire of new innovations."
Cramer agreed, citing 3M's expansion into everything from digital signs and water infrastructure to renewable energy and lithium ion batteries, not to mention adhesives and other products for everything from computer screens to cell phones.
Cramer noted that 3M is not seeing any problems from Europe, but is seeing 16% of sales coming from emerging markets. The company maintains 35 international labs, which drives 65% of its new innovations. 3M also said Brazil is becoming "another China," driving tremendous growth.
With 29% of sales coming from new products, Cramer said 3M is way too cheap, trading at just 12.8 times earnings despite a 11% long-term growth rate and a 2.7% dividend yield.
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was not long any stock mentioned.
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