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NEW YORK (
) -- After two days of signing copies of his new book,
Getting Back To Even
, and talking to hundreds of individual investors, Jim Cramer told the viewers of his "Mad Money" TV show that the verdict is in, and that it really isn't too dangerous to manage your own money.
Cramer said the investors he's spoken to have dispelled the conventional wisdom that individuals should only invest in Treasuries or index funds and should leave the "real" investing to the professionals.
He said Treasuries and index funds are the real "toxic" assets in the market, and investors who left their portfolios on auto-pilot this past year are not even close to breaking even.
Cramer said those investors who were flexible and followed his lead in taking profits at the last Dow 10,000 and getting back in during the March lows are now well past breaking even, and making profits.
Cramer said investors need to stay flexible and take charge of their money. He said they need to stick with the themes that are working, like natural gas, homeland security and his mobile Internet tsunami thesis.
But above all else, Cramer said investors need to always "stay in the game."
On Closer Inspection
In Thursday's "Sell Block" segment, Cramer said not all earnings beats are created equal. He said the press makes it impossible to tell the good quarters from the bad ones, reporting rosy headlines in both cases. The only way to really tell what's going on, he said, is to dive into the earnings and conference calls.
That's why after initially being excited about the "earnings beats" from both
Johnson & Johnson
, Cramer said he's now forced to put both companies in the Sell Block.
Cramer said there's a lot more to a good quarter than just earnings per share. In the case of Johnson & Johnson, the earnings were made by lowering R&D spending and getting a favorable tax rate. "That's not how we want to see companies make their numbers," said Cramer. Even worse, company management said their business was negatively impacted by the economy.
Cramer said that last comment was horrible news for a stock that's supposed to be a defensive play in a weak economy. Investors count on the company to deliver stable growth, no matter what. A 14% decline in the company's pharmaceutical division is not what investors want to hear, he maintained.
In the case of Yum! Brands, the press reported a 12-cent-a-share beat on strong sales in the U.S. and China. But Cramer said favorable tax rates and lower food costs were the real story, not a pickup in sales. In fact, outside of China, sales were bleak, he said, with same store sales down 6% at KFC and down 2% at Taco Bell.
Cramer said investors looking for real growth in a drug stock should consider
, a stock which he owns for his charitable trust,
Action Alerts PLUS. In restaurants, Cramer said
is the real deal, and the better investment.
Continuing on his homeland security theme, Cramer said the next stock that should be on every investors' shopping list is
, one of the premier makers of infrared cameras and night-vision technology.
Cramer said thermal imaging is no longer a niche market, but rather a $5.9 billion business. FLIR is a well-diversified company which derives 53% of its sales from government systems, 17% from commercial applications and the remaining 30% from infrared maintenance systems, a segment which the company commands a 40% market share.
FLIR Systems' sales grew 50% last year, said Cramer, and with 38% of its sales now coming from overseas, the company is rapidly becoming a global powerhouse. With many new cameras in development that are smaller and use less power, Cramer said the possibilities for FLIR are endless.
FLIR trades at just 18.8 times its earnings, but has a 19% long-term growth rate. Cramer said he's use any dips in the market as a good entry point to buy into the company.
In the "Executive Decision" segment, Cramer spoke with Moshe Gavrielov, president and CEO of semiconductor maker
, a stock which Cramer has championed since March 17. It's up 22% since the call.
Gavrielov clarified some issues raised during the company's conference call, saying that while the company's wireless products are seeing a slight dip in demand, wireless has been driving their business and will be reinforced "with vigor" next year.
Gavrielov also explained that shorter lead times for the company's products is not due to falling demand but rather increased production as Xilinx bolsters its inventory to meet expected demand.
When asked about Xilinx' outlook, Gavrielov said the company's strategy is all about flexibility. He said their products are all in demand and the company sees both growth and increased gross margins going forward.
Cramer said he just doesn't understand the bear case for Xlinix. He said investors need to stay long the stock and use the market weakness to buy more, as this company is at the heart of the mobile Internet tsunami.
Cramer was bullish on
He was bearish on
Pre-Paid Legal Services
most recent quarter was a "monster beat" and reiterated his $600 price target on the stock.
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At the time of publication, Cramer was long Abbott Labs.
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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