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NEW YORK (
) -- Hedge fund manager John Paulson made billions betting against housing, Jim Cramer said on
Wednesday. Now that Paulson's turned bullish, you should, too.
Cramer said he was shocked at how bullish Paulson was when interviewed at
Delivering Alpha conference earlier Wednesday. He said Paulson was known as one of the biggest bears betting against housing in 2008 and 2009, but now the famed fund manager told investors their best bet would be to buy a home, and their second would be to buy another one.
Paulson is now a fan of AAA-rated mortgage bonds, said Cramer, the same bonds that he despised just a few years ago. That news made Cramer reiterate his recommendations of companies such as
, which have the most exposure to the sector.
Cramer said he's also still a fan of
Bank of America
, a stock he owns for his charitable trust,
Action Alerts PLUS. Mortgage insurer
also makes the list as a buy, buy, buy.
Investors should still avoid the home builders, however, Cramer cautioned, as he's waiting to see if the most recent spike in interest rates have slowed home buying in the short term. But for the rest of the sector, it's simply too powerful to bet against.
When a sector's biggest bear becomes its biggest bull, it's time to listen, Cramer concluded.
Drinks and Snacks
What other takeaways did Cramer glean from the Delivering Alpha investor conference? He said fund manager Nelson Peltz had some of the best ideas, including
, a Cramer fave, on the possibility the company could buy
Cramer said while Peltz felt PepsiCo could shoot to $178 a share if it bought Mondelez, even without such a deal he's still a fan because the company has excellent management and it's clear the drink and snack combination is working well. Peltz also liked
, another Action Alerts PLUS stock, and Cramer agreed.
Other guests at the conference liked
. Cramer said he agrees with the ExpressScripts call, but felt that
would be better picks than Qualcomm and SandRidge.
Also at the conference: a bearish call against
, a company that Cramer said he neither likes nor dislikes at this point in the cycle.
All Hail Marissa Mayer
may have missed on earnings but the markets didn't seem to care because shares rose to new all-time highs. How can that be? Cramer said it's because of CEO Marissa Meyer.
After years of floundering, Meyer has brought fresh ideas to Yahoo!, said Cramer, and she knows how to execute them. First, Yahoo! has been able to stem the tide of falling page views because it has focused its efforts on delivering better content and a better user experience to all of its properties.
Next, Yahoo! has been able to stop losing great talent. Not only has Meyer brought down the attrition rate substantially, but the number of former employees returning to the company is growing. Finally, Cramer said that Yahoo! has been able to refocus on mobile, a key segment for everyone on the Web. The company used to have only a few dozen mobile engineers but now there are hundreds.
Even more impressive, Meyer has been able to achieve all of these feats without dinging the company's balance sheet. Yahoo! still has $4.8 billion in cash, plenty of firepower to keep its turnaround efforts alive.
Cramer said that the decline in advertising revenue, thanks in part to programatic ad buying, is troublesome, but he has no doubt that Meyer will have a strategy to combat the losses once the company has successfully revitalized itself. He said it's clear that the market agrees with everything Meyer is doing.
In the Lightning Round, Cramer was bullish on
Lions Gate Entertainment
Johnson & Johnson
Cramer was bearish on
Executive Decision: Jim Taiclet
In the "Executive Decision" segment, Cramer spoke with Jim Taiclet, chairman, president and CEO of
on the heels of an extremely negative research report by Carson Block of Muddy Waters that called for a 40% decline in the stock. Shares of American Tower are up 44% since Cramer last spoke with Taiclet in February 2011 and 111% since Cramer first got behind the stock in September 2009.
Taiclet said that normally American Tower would not even respond to such an "ill-informed" report. However, given the allegations of fraud, the company felt compelled to set the record straight.
At issue are some of the company's recent acquisitions in Brazil. According to the report, American Tower overpaid and misrepresented how much it paid for those assets. However, Taiclet explained that the deals were made using both debt and equity, and the report only cites part of the overall deal. He said American Tower will be filing an 8-K form with the Securities and Exchange Commission to set the record straight.
Taiclet continued that American Tower has reputable, U.S.-based accounting firms that audit all its acquisitions as well as the company's financials at large. He said the company's international assets are the highest-returning assets in the company.
Finally, Taiclet responded to the allegation that he's selling 90% of his stock in the company. He said that nearly two-thirds of his net worth is in American Tower stock, and the option sales are part of a standard selling plan to pay taxes and other expenses. Taiclet said the report grossly misrepresents both his holdings and American Tower overall.
Cramer said the company's 8-K filing should put these allegations to rest. He said he's a believer in Taiclet, but advised investors to do their homework once the 8-K report is filed.
Executive Decision: Gary Burnison
In a second "Executive Decision" segment, Cramer sat down with Gary Burnison, CEO of
, the high-end headhunting firm that helps companies around the world find top-level executives.
Burnison said that many companies are still slow to hire new executives and that trend may become the new normal. That's why Korn/Ferry has made a series of acquisitions to become a full-fledged talent management agency, offering adjacent services to help companies build capability within their organizations.
Burnison said people still make the difference to the bottom line, which is why his company focuses a lot on who a candidate is and how his or her unique skills will make a difference to his client's firm. Among the most sought-after traits: cultural dexterity, or the ability to operate in countries around the globe.
When asked about the global economy, Burnison said Europe does appear to be bottoming, at least for the larger firms. Overall, life and bio sciences are among the hottest sectors looking for quality people.
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 a position in DD, OXY and WFC.
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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