Rule No. 1 in investing: Always go for the easy money, not the hard money. That was Jim Cramer's lesson for his Mad Money viewers Thursday. Sometimes companies transition from easy-money stocks to hard-money stocks, Cramer explained, and being able to spot the difference is crucial.
Case in point: Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report , a service that seemed indispensable for most of us, no matter what the price. But Wednesday, Netflix reported that it lost subscribers here in the U.S. -- the first time that's happened since 2011. Overseas, the company also struggled to make gains, especially in areas where it raised prices. Shares plunged 10.2% Thursday and Cramer said there's likely more weakness ahead as Netflix is no longer in the easy-money group. The easy money, he said, is now Costco (COST) - Get Costco Wholesale Corporation Report .
Another example is Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report , which always provided investors with easy money, by having both growth plus a terrific balance sheet. But now, J&J may be on the hook for some of the opioid epidemic, making it decidedly hard money. Cramer said the easy money in this group is Novartis (NVS) - Get Novartis AG Sponsored ADR Report .
Cramer admitted there are typically higher gains when investing with the hard money, but those gains are few and far between, which makes the easy money always the way to win.
Cramer and the AAP team have the complete rundown for earnings, including action in Honeywell (HON) - Get Honeywell International Inc. (HON) Report and Lam Research (LRCX) - Get Lam Research Corporation (LRCX) Report . Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Bank of America
For his "Executive Decision" segment, Cramer sat down with Brian Moynihan, chairman and CEO of Bank of America (BAC) - Get Bank of America Corp Report , which has seen its shares rise 19% in 2019, but still trades for less than 10 times earnings.
Moynihan said Bank of America continues to invest heavily in technology and will ramp up its tech spending even more in the back half of 2019. He said the company's mobile applications do a lot more than just attract younger, millennial consumers, they also appeal to every age group and allow the bank to see significant efficiency gains in their operations. "Everybody uses our mobile app," Moynihan said.
When asked about the economy, Moynihan said consumer spending continues to drive growth and small- and medium-size businesses have been the real winners. He said the only segment that's suffering now are the international companies, especially those which sell into China.
While Bank of America invests in technology, Moynihan was sure to add that they also invest in their people with a program called "Life Event Services." He said no matter what an employee need, they try to help, whether it be hurricane relief or mental wellness. Domestic violence was one focus of the program recently, he said, and they found over 1,500 employees needed help in this area.
Cramer said Bank of America remains a buy.
Executive Decision: Nucor
In his second "Executive Decision" segment, Cramer also checked in with John Ferriola, chairman, president and CEO of Nucor (NUE) - Get Nucor Corporation Report , one of the companies most benefiting from increased tariffs with China.
Ferriola said Nucor has been able to put through two price increases in recent weeks and both have been well received by their customers as lead times for sheet steel have begun to expand. He said even though the first half of 2019 was weaker sequentially, it still represented the third best start to a year in the company's history.
When asked about the effects of tariffs, Ferriola explained that Chinese dumping of steel has slowed dramatically and domestic steel production is increasing to meet demand. While some predicted a shortage of steel as a result, Ferriola said ordering patterns have normalized and everyone who needs steel can have steel.
Ferriola even dispelled rumors that steel prices would increase without Chinese imports. In fact, he said, steel prices are $100 per ton less than before the tariffs took effect.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Looking at IBM and Red Hat
The bears may have panned IBM's (IBM) - Get International Business Machines (IBM) Report $34 billion acquisition of Red Hat, but Cramer told viewer he remains a big fan of the deal and this quarter proved it. Shares of IBM were up 4.5% by the close.
When the Red Hat deal was announced, it represented a 63% premium, a valuation the bears decried as too much. But according to recent filings, IBM was not the only bidder for Red Hat, and given the company's own shares had peaked three years earlier, the deal came not a moment too soon.
IBM has been struggling for years to generate meaningful sales growth, but even its own cloud initiatives weren't enough to stem the losses from their legacy businesses. With Red Hat, however, IBM becomes a major player in the cloud overnight. It's clear the company not only needed Reed Hat, it actually bought the company at a discount when compared to its peers.
Don't Trade Before You Know the Whole Story
In his "No-Huddle Offense" segment, Cramer reminded viewers that there simply is no cure for stupidity. That's been his take as he's watched investors try to trade during the pre-market hours on the earnings headlines alone.
Cramer said investors must listen to the conference call, or they simply won't have the context to make informed decisions. That was the case today with JB Hunt (JBHT) - Get J.B. Hunt Transport Services, Inc. (JBHT) Report , which fell on its earnings release, only to bounce $8 from its lows once investors received the full story on the conference call.
Still not convinced? Cramer said the same thing happened to Honeywell, where investors learned that things weren't as bad as the headlines led you to believe. The same with Lam Research, which saw a huge swing as naive investors jumped the gun and simply got it wrong.
In the Lightning Round, Cramer was bullish on EPR Properties (EPR) - Get EPR Properties Report , Coca-Cola (KO) - Get Coca-Cola Company Report , Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report and Alder BioPharmaceuticals (ALDR) - Get Alder Biopharmaceuticals, Inc. Report .
Cramer was bearish on Tesla (TSLA) - Get Tesla Inc Report , Six Flags (SIX) - Get Six Flags Entertainment Corporation Report , Community Bank System (CBU) - Get Community Bank System, Inc. Report and Dana (DAN) - Get Dana Incorporated Report .
Introducing TheStreet Courses: Financial titans Jim Cramer and Robert Powell are bringing their market savvy and investing strategies to you. Learn how to create tax-efficient income, avoid top mistakes, reduce risk and more. With our courses, you will have the tools and knowledge needed to achieve your financial goals. Learn more about TheStreet Courses on investing and personal finance here.
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
At the time of publication, Cramer's Action Alerts PLUS had a position in HON, LRCX, JNJ, GS.