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NEW YORK (
) -- Don't bet against this economy, Jim Cramer said on
Wednesday. He told viewers they can no longer afford to stay complacent. If you own a stock solely for its high dividend yield, it's time to start taking some profits.
Cramer said he can't blame the droves of investors who have piled into high-yielding stocks over the past few months. He said the
created the perfect environment with low interest rates for high-yielding stocks to thrive. There literally has been no competition from bonds, he said, which made stocks the only appealing game in town.
But with the housing market rebounding sharply thanks to a shortage of homes, the reign of big dividend payers may be coming to an end, Cramer continued. He said the strong housing report this week sent the utilities, REITs and master limited partnerships down sharply yesterday and the selling continued with the high-yielding drugs, foods and consumer products stocks today.
The data from the economy are getting too good, said Cramer, and investors can no longer afford to ignore them. The market has begun pricing in higher interest rates, which means investors need to start taking profits and wait for yields to rise before considering buying back into these stocks that have been such a safe bet for the past few months.
Executive Decision: Dan DiMicco
In the "Executive Decision" segment, Cramer spoke with Dan DiMicco, executive chairman at
, the steelmaker that's at the forefront of using cheap, domestic natural gas to increase America's competitive edge in the global economy.
DiMicco called the new oil and natural gas technologies in our country a "massive game-changing event," saying they can transform domestic manufacturing. Nucor's recently announced partnership with
is one such example, he said, as they will be investing a combined $2 billion in U.S. infrastructure.
DiMicco also took a hard stance on what he called "extreme exporting" of our abundant natural gas supplies. He noted that studies have shown that using our own gas has twice the economic impact as exporting and creates eight times as many jobs. DiMicco added that he's not against exporting 10% or 15% of our supply, but with 20 export projects currently on the books, we could end up exporting as much as 40% of our supplies, a move that would have a big impact on our economy.
When asked about energy independence, DiMicco said that with more than a 100-year supply of gas, it's certainly feasible the U.S. can become energy-independent with just a little help from our friends in Canada and Mexico. That, too, would be a game-changing event.
Cramer said he's a big supporter of DiMicco's efforts in helping to spur our economy, but he was less optimistic on Nucor's short-term steel business given the current state of global affairs.
In Defense of Defense Stocks
Wasn't the government sequester supposed to ruin the defense stocks? That's surely what the analysts thought, said Cramer. But the companies themselves have had other ideas.
That's why stocks like
are all up over 30% so far in 2013.
Cramer said this is one case where the analysts simply got too negative, predicting absolute doom for the defense industry, when in reality the government has been very slow in implementing the "mandatory" spending cuts and the new Obama budget hopes to roll back many of them by 2014. Beyond that, Cramer noted that many of the defense companies have been cutting costs and beefing up their commercial and international operations.
Cramer said he loved Northrop's 11% dividend boost as well as its massive share repurchase plans. No wonder Citigroup upgraded the stock, sequester and all. Then there's Lockheed's 4.2% yield and its 11-cents-a-share earnings beat when it last reported, also a huge plus.
When it comes to
, Cramer said the company's commercial business, with the new 787, more than makes up for any government losses.
There are some negatives in the group, however. Cramer noted he's not a fan of
, nor any of the smaller, less-diversified companies that don't have as much clout in Washington.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
Federal Realty Investment Trust
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to
to see if investors' portfolios have what it takes for today's markets.
The first portfolio included:
Cramer said this portfolio was properly diversified.
The second portfolio's top holdings included:
SPDR Gold Shares
Nordic American Tanker
Cramer said MarkWest was different enough from Nordic American to qualify, so this portfolio is also diversified.
The third portfolio had:
as its top five stocks.
Cramer said Nationstar and Toll Brothers were both housing and TJX and Starbucks were both retail. He suggested adding an industrial stock and a technology stock to replace Nationstar and Starbucks.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer opined on the CEO shakeup at
Procter & Gamble
. He said the news makes Procter a sell in his book, and he'd play the management change up with a pair trade, selling Procter and buying up some of its rivals that are likely to benefit most, stocks like
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC
-- Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer's Action Alerts PLUS had no position in TJX and WM.
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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