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"The markets have changed," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday. "The big-money managers and hedge funds are now desperate to get back in."
Cramer said it's not surprising that there was profit taking today after yesterday's monster move. But behind the scenes, he said, the markets are rapidly shifting gears as the big money mutual funds and hedge funds are struggling to get long.
For over a year now, Cramer said it was a badge of honor for mutual funds to have the maximum amount of cash on hand, signaling that they were prudent and patient. But after the market's sudden turnaround, that game of waiting is over, and mutual funds and hedge funds alike are buying everything they can.
Cramer said Treasury Secretary Geithner, once toxic to the markets, is now instilling confidence, giving fund managers the confidence they need to start buying again. Between now and month's end, he expects the financials to rally hard as money moves off the sidelines into this hardest hit sector.
Cramer said he'd be a buyer of stocks like
, all stocks which he owns for his charitable trust,
Action Alerts PLUS, along with
Bank Of America
on any weakness between now and March 31.
On the Money
Who saw the financial Apocalypse coming? Cramer said his sources did, and that's why he started pounding the table and sounding the alarm in August, 2007.
Cramer said he tries to bring both his experience and sources to "Mad Money" each night, in an effort to couch viewers into becoming the best investors possible.
He said that while many on Wall Street were blinded by misleading financials, dishonest executives and a faulty buy-and-hold manta, his sources were right on the money.
"We did see it coming," said Cramer, who replayed a clip from July 8, 2008 where he warned of large-scale bank collapses.
Since that show,
Bank Of America
both lost 96%.
Cramer also cited his "stress index," which was started on Aug. 3, 2007, as another example of his foresight. The index of banks, insurers and home builders, which started at 100, is now down 95.5% since its inception.
So what are Cramer's sources telling him now? He said the same ones who were sounding the alarm in 2007 are now scrambling to get back into the markets.
Beyond the Dividend
Cramer said the only stocks investors should trust are those which have raised their dividends, or those which are likely to do so. That's why he's recommending
Procter & Gamble
as the next in his series of dividend raisers.
Procter & Gamble is down almost 20 points from high and is despised by all, said Cramer. Yet, the company has raised its dividend 52 consecutive years, with last year's increase totaling 14%. Cramer said he's got little doubt the company will raise it again this year.
Cramer said normally a recession-resistant name like Procter would not be his choice this late in the economic cycle, but he likes the stock for one reason and one reason alone, the weakening dollar.
Procter's revenue dipped 3.2% in their most recent quarter, citing currency conversion as the leading cause. But with the dollar now swinging in the company's favor, Procter should fare very well because 61% of its sales come from outside the U.S.
Cramer said Procter is also a play on falling commodity costs. Because the company successfully pushed through a price increase as commodity prices rose, it is now in a position to win big as prices return to more normal levels.
Off the Charts
In this segment, Cramer went head to head with Real Money commentator Rick Bensignor on his recent call to sell
and buy rival
According to the charts, Honeywell just made a double bottom, signaling a breakout to the upside is coming. Bensignor also cited a cross in the chart's MACD indicator as another bullish trend. For 3M, Bensignor said the sellers continue to overwhelm the buyers and the MACD hasn't crossed, signaling more weakness ahead.
Turning to the fundamentals, Cramer said he'd be a buyer of both companies. He said 3M, a stock which he owns for his charitable trust,
Action Alerts PLUS, is now a lean, mean restructured machine poised to play catch up to its rivals.
According to Cramer, 3M should follow right on the heels of Honeywell. The company just raised its dividend in February and is trading at only 9 times earnings compared to Honeywell's 11 times earnings.
But the real reason to like 3M, he observed, is the company's international exposure given the weakening dollar. With 63% of the company's sales coming from overseas, more favorable currency conversion will be jump starting this stalled stock soon.
Cramer was bullish on
Nordic American Tanker
He was bearish on
Chicago Mercantile Exchange
World Wrestling Entertainment
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At the time of publication, Cramer was long 3M, BP, Union Pacific, Wells Fargo, JPMorgan Chase, Morgan Stanley, Goldman Sachs.
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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