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Investors should set aside negative economic news and concerns about overvalued stocks and just concentrate on buying stocks and making money, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
Right now there is one problem facing investors: "they are overthinking this stock market," he said.
The market is not working the way the professionals think it should and thus the people who know more about investing are making less and the people who know less are making more, he said.
"There is a huge wall of money rolling at us courtesy of the
and it doesn't pay to over think it," Cramer said. "In fact it pays to not to over-think it." When money comes in, it drives stocks higher and that's all people should be looking at.
Oil is driving everyone crazy because people are in shock that this commodity has gone up as much as it has and that no new oil is coming out of the ground, he said. However, "don't worry about high oil prices."
Also, even though alternative energy stocks may seem overvalued, they are still going higher, as are the infrastructure, fertilizer and China plays, Cramer continued. He believes betting against something that's overvalued is a bad idea in this environment.
Market players should be buying things even though they are overvalued, Cramer advised. Although this may seem irresponsible, traditional market thinking is not going to get people anywhere right now.
Stop trying to be smarter than the market and over thinking it, he said. Instead recognize that oil, tech, fertilizer, alternative energy are all bull markets.
"Go buy some
," Cramer said. "Welcome to rate cut."
Baltimore Ravens defensive tackle Justin Bannan joined Cramer on his show, where the NFL star asked Cramer what he should be looking out for and concerned about when investing in the market.
Given the amount of time he devotes to playing football, Cramer said he couldn't imagine Bannan would have a lot of time to spend on stocks. Instead, he suggested the player consider putting 10% of his money in a gold fund or gold itself, 20% of his money in international plays and 30% in mutual funds.
When Cramer asked Bannan why he had such a large position in bonds, Bannan replied the bonds have made him some good money so far.
Cramer said that someone at Bannan's age, with 20 years ahead of him, should consider moving more money into the equity market or overseas market. "Maybe pick one or two stocks, businesses that you like" and follow up on them, he advised. Bannan agreed that it wouldn't be a bad idea to invest in one or two.
Sticking With Nastech
A little speculation is good for portfolios, as long as people recognize the risk, do their homework and are careful buying the stock, Cramer told viewers. "But what happens when your stock drops the ball?"
( NSTK) is one of those "yet-to-become-profitable biotechs with the ability to make you boatloads of cash if it gets it right," he said. Its edge is supposed to be its proprietary nasal system for the treatment of osteoporosis.
Moreover, it has a "virtual mosaic of drugs" in development for various diseases, Cramer added. Nastech has drugs in the works for obesity, diabetes and autism, as well as osteoporosis
Although it missed its earnings "horribly" recently, it's important to realize stocks like Nastech don't trade based on their earnings, he explained. They trade based on their drug pipeline.
Cramer said he's not ready to give up on Nastech yet. However, if people are going to stay in the stock after this miss, they have to make sure their thesis is right.
What a Crocs
On a separate note, "we had some tricks an some treats today," Cramer said. While market players got some treats with
, they got a trick with
"I'm now saying I'm done with Crocs," he said. "I didn't like the quarter."
Am I Diversified?
During the "Am I Diversified?" game, Cramer's first player called out the following five stocks:
Weingarten Realty Investors
Cramer called out a pair in GIS and KO and advised the caller to sell GIS and pick up a defense contractor instead. He also said it wouldn't be so bad to sell Dow either because it's not doing so well.
The second caller asked if he was diversified with these five holdings:
Level 3 Communications
, the last of which Cramer owns for his charitable trust,
Action Alerts PLUS.
Cramer told the caller he had too tech exposure with Apple, ValueClick and Cisco. Even though he likes them all, he said he can't recommend owning them all in a single portfolio.
The last caller named these five:
Cramer told the caller he had too many speculative and fertilizer plays. He suggested getting rid of some and picking up some "plain vanilla" companies.
Cramer was bullish on
United States Steel
Brookfield Asset Management
Cramer was bearish on
( AXYS) and
Schnitzer Steel Industries
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At the time of publication, Cramer was long XTO Energy.
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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