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) -- When it comes to predicting stocks on Wall Street "the facts always win," Jim Cramer told the viewers of his

"Mad Money"

TV show Thursday.

He then explained how the retail sector, a group thought to be held hostage by the grips of $4 a gallon gasoline, was able to roar higher today on spectacular earnings.

Cramer said events like what the retail stocks were able to pull off today come down to one thing, expectations. He said Wall Street portfolio managers all have what he called a "world view," a vision of the future that includes estimates for things like interest rates, commodity prices and unemployment. Based on this world view, managers then discern which sectors of the economy will likely flourish and which will suffer given those conditions.

In order for money managers to beat the

S&P 500

benchmark, Cramer explained, they must underweight the sectors that they feel will underperform and overweight those that will outperform. In the case of the retail stocks, everyone knew things would be tough, so analysts lowered their expectations well in advance of earnings, making it easy for retailers to surprise to the upside.

Which all leads to today, when money managers caught off guard by upside surprises needed to do some emergency buying to capitalize on strength of a group they all buy left for dead. Cramer said that's why

Bed Bath & Beyond

(BBBY) - Get Report

was up five points today, and why


(COST) - Get Report

was up three.

Cramer said it's also why there was strength in everyone from

Pier1 Imports

(PIR) - Get Report

, to


(JWN) - Get Report


Best Buy

(BBY) - Get Report

. He said these gains may seem counter- intuitive at first, but in the eyes of money managers caught off guard, it all makes perfect sense.

Best of Timber Stocks

The price of timber is on the rise, Cramer told viewers, thanks in part to strong demand from China, a looming $300 billion rebuild coming from Japan and a Canadian pine beetle that's wiping out that forest-rich country's timber assets.

But which of the four U.S. timber REITs should investors choose? Cramer took a look at


(WY) - Get Report



(RYN) - Get Report


Plum Creek Timber




(PCH) - Get Report


Of the bunch, Cramer said he like WeyerHaeuser the best. He said the company yields only 2.5% but offers a strong management and balance sheet and is also ideally positioned in the Northwest U.S. to benefit the most from increased timber exports to China and Japan.

Cramer said that Rayonier has 2.5 million acres of timber land, pays a bigger 3.4% yield and also has business in Japan, but would only be his second choice, as the company also has lands in the Southeast U.S. which are not suited for export.

Plum Creek Timber also seems like a logical choice, with its 3.9% yield and the fact that the company is the largest landholder in entire U.S., but Cramer said the company is not ideally suited for export, and is too tied to the ailing U.S. residential construction market.

Finally, there's Potlatch. Cramer said this company's 5% yield is a red flag and could be cut in the future. He said while Potlatch might be a takeover candidate, he feels the company has land in all the wrong places and doesn't have the solid fundamentals he's looking for.

Cramer said some investors might be tempted to buy the

iShares S&P Global Timber

(WOOD) - Get Report

ETF, which tracks 24 timber companies, but as with all ETFs Cramer asked "why own the good with the bad?"

S&P Biggest Winner, Loser

In the Thursday "Sell Block" segment, Cramer examined the biggest winner and the biggest loser, in the

S&P 500

last quarter to see which one should be bought and which one should be sold.

It turns out that refiner



was the winner of the quarter, up 45%, while employment website

Monster Worldwide


pulled up the rear with a 33% decline.

Cramer said he'd be a seller of all of the oil refiners, but only after they report what will likely be "better-than-expected" results. Cramer said the disconnect in crude prices that's helping refiners book record profits can't last forever, and as gas prices remain high, drivers will be forced to drive less this summer. Only


(SUN) - Get Report

, a turnaround story, received a pardon from Cramer's sell block.

But what of Monster Worldwide? Cramer said the company did indeed lose 33% of its value when it reported, but those results were still in line, just not spectacular. With unemployment beginning to fall and job listings likely to increase, Cramer said he sees a bullish trend for Monster. The company trades at just 20 times earnings, but has a 20% long-term growth rate. He said shares of Monster will likely snap back soon, and he'd be a buyer.

Mad Mail

Cramer followed up on some stocks that stumped him during earlier shows. He said that

Mako Surgical


, which makes robotic arms used in knee surgery, is too red hot and he'd rather own

Intuitive Surgical

(ISRG) - Get Report



Safe Bulkers

(SB) - Get Report

, Cramer said the company has sufficient cash to cover its 6.3% dividend yield, but the company likely won't grow until 2012 when new ships come online.

Next, Cramer said that


(ONCY) - Get Report

, which is developing a cancer treatment, is too binary. It either gets FDA approval and wins big or fails miserably. Cramer said he doesn't like the risk reward.

When asked about the Bakken shale region of North Dakota, Cramer said he still likes

EOG Resources

(EOG) - Get Report

along with


(ENB) - Get Report

. When asked about

Ruby Tuesday


, Cramer said he feels the company is an outlier since

Darden Restaurants

(DRI) - Get Report

delivered a good quarter.

Finally, when asked to opine on

Berkshire Hathaway

( BRK-B) and

Georgia Gulf


, Cramer said he's still a believer in Warren Buffet but has missed the move in Georgia Gulf.

Lightning Round

Cramer was bullish on

First Republic Bank

(FRC) - Get Report


SPDR Gold Shares

(GLD) - Get Report



(COP) - Get Report





Enterprise Products Partners

(EPD) - Get Report


VF Corp

(VFC) - Get Report


Micron Technology

(MU) - Get Report


He was bearish on




Closing Comments

In his "No Huddle Offense" segment, Cramer defended his recent bearishness on the tech sector. He said when the facts change, he has no choice but to change his mind.

Cramer said many investors have expressed anger over his abandonment of the sector, but he said his job is to recommend stocks that are going up and not to recommend ones that are likely to go down or stall.

When it comes to the tech sector, Cramer said sales are seasonal, and are prone to other factors. So when companies report weakness or there's a reported glut in tablets that are not iPads, he has to be truthful.

"Im not here to hold hands," said Cramer. While selling tech may result in some losses, not selling them may result in far worse losses, he added.

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

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Scott Rutt


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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, 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.