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NEW YORK (
) -- "Don't lose sleep over things you can't control," were Jim Cramer's words to the viewers of his
TV show Tuesday, as he told investors to ignore the media-driven "worries" and start focusing on picking great companies for their portfolios.
"You cannot let worries scare you out of the market," Cramer continued. He said worrying will not make investors a penny in the markets, only rigor and homework make the grade.
While the media may worry about the
, Cramer said investors only need to know that chairman Ben Bernanke is doing everything he can to help the economy grow so it will create jobs. While the media worries about every aspect of President Obama's agenda, Cramer said investors only need to know that Obama is now trying to help business, not hurt it.
Cramer said investors could choose to worry about the banks, or gold, or the dollar, but the fact is that all of these things are out of their control. What's more important is using these fears to hunt down bargains when the markets take everything lower.
Cramer said in all his years on Wall Street, he's only ever seen one thing that big money managers worry about, and that's missing a rally and not performing as well as the other guys. Take a cue from them, said Cramer, only worry about picking good stocks. What matters most, he concluded, is finding growth and good dividends.
Hepatitus C Drug Plays
"The Hepatitis C market is about to be transformed," Cramer told viewers as he continued his series of biotech companies working on blockbuster new drugs. "I think you should be in the companies doing the transforming."
Cramer explained that there are 7.4 million people infected with Hepatitus C in the U.S. and in Europe, yet only 170,000 of those are receiving treatment. Why? Cramer said it's because the treatment is worse than the disease. The current treatment involved a twice-daily pill and a weekly injection that lasts for 48 weeks. Then, after enduring significant side effects, these drugs offer only a 51% cure rate.
That's why a new drug being developed by
is so promising. Vertex' new drug will be a third element to the current Hepatitus C cocktail and claims to cut treatment time to just 24 weeks and offer a 75% cure rate.
Cramer said while no drug approval is guaranteed, Vertex could have a $2.9 billion drug on its hands by 2013, and since the company has the cash on hand to both launch the drug and build out a salesforce to sell it, Cramer said it could add $6 a share in earnings to Vertex' bottom line. He said that if approved next year, Vertex could see $16 a share of upside from current levels.
For a more speculative play, Cramer recommended
, whose Hepatitus C drug is only entering Phase III trials early next year.
Cramer said this drug would compliment Vertex' drug and could help those patients who don't respond to other treatments. He said this would make Pharmasset a natural takeover target. Cramer said he sees possibly 29% of additional upside for this stock.
Bullish on Cisco
In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of
, a stock which has gotten punished since it reported what were perceived as disappointing results in August.
According to Collins, Cisco's weekly chart shows that the stock has been unable to close above either its downtrend resistance line or its 34-week moving average since the bad news in August. However Collins noted that the pattern changed in mid-September and now indicates the stock is poised for a big move higher. Both the on- balance volume and stochastic indicators confirm this trend.
Turning to the daily chart, Collins felt the trend was even clearer. The chart clearly shows the gap lower on the news before a nosedive through mid-September. But since then, the stock has been pushing through its long-term resistance line, entering a bullish ascending triangle pattern.
Cramer agreed with Collins' analysis, saying that he likes Cisco, the world's leader in networking equipment. Cramer said companies are finally beginning to increase their IT budgets and Cisco will be the primary beneficiary. Cisco also has $40 billion in cash on hand for buybacks and acquisitions as needed.
Cramer said Cisco is a cheap stock, trading at just 11 times earnings despite its 12%-to-17% long-term growth rate.
Outrage of the Day
Cramer sounded off against the news that senior bank executives are pulling in a record $144 million in bonuses this year. He asked, "Where's the shame? Where's the horror" that executives in the worst performing sector in the
are getting bonuses at all.
Cramer said he's sickened that so many "Mad Money" viewers' portfolios have been destroyed by Wall Street bankers, yet these executives, most of whom are wealthy to begin with, can take a bonus.
"Did these executives invent the iPad," asked Cramer? "Did they turn around
?" Sadly, no. All they did was destroy value, he said.
Cramer said the $144 million would go a long way towards restoring capital at these banks, so the events of 2008 don't replay themselves again. He said in a righteous world, no executive would get a bonus until their bank was on solid footing, and their shareholders were repaid with the reinstatement of a dividend.
"It's common sense," said Cramer.
Cramer was bullish on
Bank of America
He was bearish on
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was not long any stock mentioned.
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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