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NEW YORK (
) -- "This is the opposite of a bubble," Jim Cramer told his
TV show viewers Wednesday, as he took on the critics and skeptics that are comparing today's markets to the last time the
Dow Jones Industrial Average
Cramer said that when the Dow hit 13,000 the last time, the markets were rallying on the growth in Brazil, Russia, India and China, and not on U.S. growth. He said everyone was profiting off of the growth in commodities. At the same time, he added, investors thought that the banking system was solid and were fraudulently led to believe that housing prices could never fall.
But today's markets are different, said Cramer. Back then, shares of
Bank of America
both traded at $44 a share, he noted. Today, Bank of America sits at $8 a share and Alcoa struggles to stay above $10. "This market is irrationally un-exuberant," said Cramer.
Cramer said when he looks at the 30 stocks that make up the Dow, only two, Alcoa and
are worrisome. He said the banking stocks are on a much better footing than they were in 2008. Likewise with the drug stocks, which now have dealt with their patent expirations and have excellent balance sheets. Cramer said that sector by sector, companies are doing better.
"There are no bubbles here," Cramer concluded, saying that the markets would have to rally substantially from today's levels to even come close to how overvalued they were back in 2008, when a host of global-economic crises were ahead of us instead of largely behind us.
In the "Executive Decision" segment, Cramer spoke with Patrick Daniel, the outgoing president and CEO of
, an oil and gas pipeline company that's currently growing at 10% annually. Enbridge currently pays a 2.9% dividend and shares have rallied 30% since Cramer first featured the company in March 2011.
Daniel said with America rapidly increasing its oil and gas production, there's a scramble to build the infrastructure to handle it, a trend in which Enbridge is right in the middle. Whether it's the Bakken or Eagle Ford oil shale or the Canadian oil sands, Daniel said there's strong demand for drilling and for pipelines to move what's produced.
Enbridge is also at the forefront of the battle to close the gap between the price of West Texas oil and Brent Crude, something that's been crippling American oil and gas producers.
Daniel said that Enbridge is reversing the flow of its pipeline between the Gulf of Mexico and Cushing, Okla. and will have 150,000 barrels a day flowing in the right direction by mid-year and 450,000 a day by next year. However that might still not be enough, he said, which is why the company is looking into building a twin to its north-south pipeline so it can move up to one million barrels a day if needed.
Daniel said that Enbridge is also investing huge amounts of capital to expand its Bakken shale oil pipelines. He said oil is currently being sent by rail from the Bakken, which is a very expensive operation.
When asked about America's use of domestic natural gas, Daniel said that natural gas is a tremendous opportunity for America. He said that North America could easily become energy independent if Washington were to get onboard and support the fuel.
Daniel went on further to explain that the delays in the Keystone XL pipeline, for example, were largely based on the impractical notion that America should just not use oil at all. But in reality, he noted, using oil and gas from both the U.S. and Canada is far cleaner than using coal.
Cramer wished Daniel all the best on his future pursuits and continued his recommendation of Enbridge.
In a new segment entitled "What the Heck," Cramer examined the surprising rally in
, a defense contractor, on the heels of what seems like endless chatter of continued defense budget cuts.
Cramer explained that since Lockheed derives 82% of its sales from the U.S. government, the company should suffer as defense spending falls from 5% to just 3% of the overall federal budget. But instead of retreating, shares of Lockheed rallied 17% last year and are already up 9.3% so far this year.
So does the move in Lockheed make sense? Cramer said it does. He said the expectations for the defense contractors are extremely low, with the sector bracing for the worst case scenario that never materialized. The next round of budget cuts won't happen until 2013, he noted, giving the group breathing room.
Second, Cramer noted that the defense companies have offset falling revenues by cutting costs, allowing them to generate enough cash to buy back shares and boost earnings per share numbers. Finally, the defense group is incredibly shareholder friendly, with Lockheed offering a 4.5% yield, which was boosted by 33% back in September.
Cramer said that the defense names also have the calendar in their favor, as the group has outperformed in seven of the past nine election years. He said that all of these arguments make a persuasive case for owning the defense contractors, but he would be cautious given the multitude of variables that play into their stock valuations.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes for today's markets. The first caller's portfolio included
American Capital Agency
Cramer said this portfolio was properly diversified and had a good dividend yield as well.
The second caller's top holdings included
Energy Transfer Partners
Nordic American Tanker
Cramer also blessed this portfolio as diversified with a good yield.
The third caller had
Johnson & Johnson
as their top five stocks.
Cramer said he's not a fan of Johnson & Johnson and advised selling that stock in favor of a financial like
in order to be properly diversified.
Cramer was bullish on
Cramer was bearish on
In his "No Huddle Offense" segment, Cramer sounded off against those who criticized his recommendations of
, two stocks that fell markedly today. Cramer said he welcomes criticism when he's wrong, but in the case of First Solar and SodaStream, he told investors to sell a long time ago.
Cramer said at one time First Solar had the best technology at the best prices, but after the Chinese eroded margins and the Europeans stopped subsidies, it was time to ring the register in a hurry, which he recommended investors do at $132 a share.
Cramer admitted he also recommended SodaStream, back when its home soda machines were flying off the shelves. But when sales slowed dramatically last July, Cramer said shares were too hot and also advised taking the money and running for the exits.
"When the facts change, I change my mind," Cramer is fond of saying. In the case of these two stocks he did just that, saving investors a ton of heartache.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was not long any stock mentioned.
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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