Cramer's 'Mad Money' Recap: Overdue Selloff (Final)

Cramer discusses why a pullback is needed for the market to go higher.
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NEW YORK (

TheStreet

) -- "Don't fight today's pullback, welcome it," Jim Cramer told the viewers of his

"Mad Money"

TV show Wednesday, as he listed 10 reasons why investors should embrace a market selloff.

1. The market's gotten ahead of itself in preparation for next week's election. Cramer said the market just assumes a Republican sweep next Tuesday, but that might not be the case.

2. The

Federal Reserve

is expected to stimulate the economy. Cramer said with all the Fed talk, there's too much room for disappointment.

3. Earnings can't last forever. Cramer said the earnings have been terrific, but the markets can't keep ticking higher every day.

4. There was no news today. Cramer said that normally there's a new headline to drive the markets up, but not today.

5. There were visible losers today. Cramer said that

Whirlpool

(WHR) - Get Report

,

Jones Apparel

(JNY)

and

Sprint

(S) - Get Report

all disappointed, but no one noticed.

6. International companies need a weak dollar. Cramer said when the dollar strengthened, the big internationals are supposed to get dinged.

7. Unemployment numbers are coming. Cramer said why tempt fate with labor numbers so close at hand.

8. There are too many bulls. Cramer said the bull-to-bear ratio is inching higher, and the markets are now overbought.

9. Too much short covering. Cramer said much of the buying as of late has been short covering and not real interest in stocks.

10. It's October. Cramer said if there was ever a month for a big selloff, October would be it, especially with the end of the tax year for many mutual funds just days away.

Cramer told viewers that with all these sell indicators out there, investors should expect, and not fear, the next selloff when it comes.

Bet Pays Off

In the "Executive Decision" segment, Cramer spoke with Sean Boyd, CEO of

Agnico-Eagle Mines

(AEM) - Get Report

, a stock that's up 17% since Cramer last spoke with Boyd on Aug. 17.

Boyd said Agnico-Eagle had record cash flow in its most recent quarter, thanks to increased output and a 10% decline in production costs. He said the company took a big risk trying to open five new mines over the past five years, but that bet is paying off as all five mines are now coming online. Going forward, Boyd said he expects to increase production even further at these new mines.

When asked about the price of gold, Boyd said the pullback in recent weeks is a healthy one, and he's comfortable with the current price of the commodity. He said the price of gold is not a bubble, as more and more countries and investors look to gold as an alternate currency.

Finally, when asked about the future, Boyd said the gold mining is a tough business now that all the easy deposits have been found. He said it will be more and more difficult to produce gold going forward.

Cramer said Agnico-Eagle is one stock that sells itself. He said the stock is way too cheap, and is headed to $120 a share.

Puzzled Over Market Reaction

In another interview, Cramer spoke with Wes Card, CEO of

The Jones Group

(JNY)

, a stock that took a 25% haircut today on weaker-than-expected earnings.

Card said that he was disappointed with today's reaction to the company's results, especially since many of the shortfalls were forecast earlier. Card said that Jones was still able to deliver a 17% increase to the bottom line year over year.

Also on the positive side were same-store sales, which were up in the mid-single digits, said Card. Jones is taking market share, he said, across multiple categories including apparel and footwear.

At issue were the company's gross margins, which were lower in part to a 40% rise in the price of cotton, increased sales at the company's outlet locations and supply constraints from Jones' Chinese factories. Card said the company is working towards rectifying all of these issues.

When asked about possibly buying back stock or raising the company's dividend, Card said the matter is discussed every quarter, but he prefers to protect the cash for possible acquisitions.

Cramer said at Jones' new lower price, the stock is a buy given its strong brands and growth prospects.

Teaming With Wal-Mart

In a third interview, Cramer sat down with David Wenner, president and CEO of

B&G Foods

(BGS) - Get Report

, makers of Cream of Wheat, Ortega and of course, B&G pickles.

Wenner explained that B&G's main focus is returning capital to its shareholders, a philosophy that was born in the company's private equity days before it went public. He said the company could raise its dividend even more but is waiting to see the ramifications of proposed new tax laws on dividends.

When asked how the company is able to generate 6% to 7% growth in its brands, Wenner said B&G does it by introducing new products. He said many of the brands the company acquires are part of larger entities that don't even have a salesforce to sell the products.

Wenner also said the company's partnership with chef Emeril Lagasse has been great for B&G. He said Emeril works closely with the company and approves every product that is made.

Finally, when asked about B&G's distribution in

Wal-Mart

(WMT) - Get Report

stores, Wenner said that Wal-Mart now accounts for 16% of sales, which makes Wal-Mart the company's largest customer.

Cramer continued his support for B&G, saying it's the best stock that no one has heard of.

Lightning Round

Cramer was bullish on

NetGear

(NTGR) - Get Report

,

Chesapeake Energy

(CHK) - Get Report

,

Chevron

(CVX) - Get Report

and

Akamai Technologies

(AKAM) - Get Report

.

Closing Comments

Cramer recommended both

Akamai

(AKAM) - Get Report

and

Las Vegas Sands

(LVS) - Get Report

on the heels of their great quarterly results.

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

To contact the writer of this article, click here:

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To watch replays of Cramer's video segments, visit the Mad Money page on CNBC

.

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For more of Cramer's insights during the Lightning Round, clickhere

.

At the time of publication, Cramer was not long any stock mentioned.

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