Click here for an archive of Cramer's "Mad Money" recaps.
Editor's note: The following is a recap of the April 14 show, which was rebroadcast on Monday, May 22.
There's life beyond good and evil, Jim Cramer told "Mad Money" viewers Monday, and he promised to reveal the ways investors can make money from vice and sin.
"Tonight I'm coming at you with the most politically incorrect stocks outside the oil field sector," he said, specifically identifying "alcohol, tobacco and firearms" as stocks to own.
"So many people try to invest morally," Cramer said. "They let their politics and emotions and ethics bleed into money management." He warned investors that the only thing that should guide them in investing money should be making even
But Cramer also acknowledged that doing so would not be easy for most people. "Every single investor has this ethics money riding on his back," he said.
But in investing, there is only one commandment, warns Cramer: "Thou shalt make money."
Cramer's No. 1 stock pick in the sin sector is
The company owns the Johnnie Walker Scotch brand, which marketing gurus have cleverly segmented according to income level. Cramer added that Red Label was the brand he drank at college, Black Label when he worked at Goldman Sachs, and now that he works on TV, it's Blue Label all the way.
Other notable brands owned by Diageo are Tanqueray, Smirnoff and Guinness. "These are all terrific brands with great name recognition," said Cramer. "For wine and the hard stuff, it's Diageo."
Cramer's second pick, "although not a close second," is
The primary reason for picking the stock, he said, is the rapid growth of cash flow produced by the company's solid stable of brands, a frothy 12%.
Although that reason alone satisfies Cramer as a reason to own the stock, he also believes that the company owns some good brands, such as Montezuma tequila, Fleischmann's spirits, and exclusively distributes others, such as Corona beer.
This Bud's Not for You
"If I own an alcohol stock, why don't I just buy
?" Cramer asked. "Because I'll lose money," he said.
Cramer says that the company already commands half the U.S. beer market through its premier brand, Budweiser, and that 90% of the company's profits are already derived from sales of Bud, leaving little upside opportunity for profit growth.
Cramer next turned to tobacco stocks to take advantage of worldwide addiction to smoking.His top stock for the tobacco sector is
The company owns the Marlboro brand, which commands a 40% share of the U.S. cigarette market. It also pays a large and safe dividend.
"In a way, you are taking blood money," Cramer said, but he urged investors to buy the stock and collect the dividends anyway. Cramer added that he's "never smoked a cigarette" in his life.
So why is Altria better than
, also known as RJR?
"I don't care what you prefer
brand-wise, but Altria sells more cigarettes," Cramer said.
His second tobacco company is
. The company makes and sells snuff tobacco and has recently turned around its core business.
Though Cramer says there's speculation of RJR and Altria dipping into the snuff market, either company may decide to acquire UST rather than build a business from the ground up.
Stick to Your Guns
Cramer believes that for a really well-rounded unethical portfolio, "you're going to need some guns."
Although there aren't that many companies that are pure plays on firearms, he recommends
Smith & Wesson
Cramer believes that the company, which was once only a handgun manufacturer, has taken steps to move into rifles and military arms.
His final firearms-related pick is
, which makes all the bullets for the U.S. military's M16.
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
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."
None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com 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 TheStreet.com, 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 TheStreet.com. 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 TheStreet.com, 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.