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Most people have surrendered their money management to index funds, Jim Cramer told his Mad Money viewers Tuesday. But, Cramer said, as much as he loves index funds, he still encourages individuals to do some of their own stock picking.
You'll do just fine with index funds, Cramer admitted, but only stock picking will give you gains to get excited about, and today's action had plenty of examples.
Then there's Procter & Gamble (PG) - Get Procter & Gamble Company Report , a company many investors saw simply as a tepid house of brands that offered only a bond market equivalent dividend. That was until today, when the stock soared 3.4% on a surprise 3% jump in organic growth. Rival Kimberly-Clark (KMB) - Get Kimberly-Clark Corporation Report didn't perform nearly as well, making Procter's achievements stand out even more.
There were winners and losers in the restaurant space as well, with Sonic (SONC) posting a horrendous quarter, while rivals McDonald's (MCD) - Get McDonald's Corporation Report and Panera Bread (PNRA) gain in market share.
Similar trends played out in apparel, with VF Corp (VFC) - Get V.F. Corporation Report losing its luster and creating opportunities to buy PVH (PVH) - Get PVH Corp. Report . United Technologies (UTX) - Get United Technologies Corporation Report beat out General Electric (GE) - Get General Electric Company Report , another Action Alerts PLUS name.
Cramer again commented on the desperation merger of AT&T (T) - Get AT&T Inc. Report and Time Warner (TWX) , as rival T-Mobile (TMUS) - Get T-Mobile US, Inc. Report added 851,000 new subscribers this quarter, compared to AT&T's loss of 268,000 subscribers.
This is truly a time of turmoil, Cramer concluded, but that just makes picking winners all the more gratifying.
Political mood to block big mergers
News flash for CEOs: Stop listening to your advisers. No one wants big mergers anymore.
That was Cramer's advice after hearing that the European Union is once again delaying the approval of the merger between Dow Chemical (DOW) - Get Dow, Inc. Report and DuPont (DD) - Get DuPont de Nemours, Inc. Report .
This isn't the go-go 1980s, Cramer said, and the rules have changed. The bias is now to block big mergers and not to approve them. Why? Because neither political party wants to risk creating behemoth companies with too much power.
Just look at the long list of recent failed mergers, including LAM Research( LCRX) and KLA-Tencor (KLAC) - Get KLA Corporation Report , Halliburton (HAL) - Get Halliburton Company Report and Baker Hughes (BHI) , and Monsanto (MON) with Bayer AG.
No one wants to see a repeat of what happened in the airline industry, where competition is now all but gone and the power is concentrated among just four companies.
Yet companies like AT&T and Time Warner still think a deal can get done, despite that writing on the wall. Cramer said this is simply because their lawyers have no incentive to tell these companies "no" and risk losing millions in fees. So companies will continue to announce pie-in-the-sky deals that will linger on before finally fading into the abyss.
Daymond John: Samsung can recover
In a special interview, Cramer welcomed back serial entrepreneur, brand specialist and "Shark Tank" panelist, Daymond John, for a read on current events.
John said he believes Samsung (SSNLF) can recover from their Galaxy Note 7 recall. He said every company has its loyal fans and big companies like Samsung protect themselves by diversifying into many industries. In the end, "they're doing OK," John concluded.
Turning to the apparel industry, John said he's still betting on Under Armour (UA) - Get Under Armour, Inc. Class C Report , which has a strong base of customers in running, fashion and among millennials. He was also bullish on the privately-held sock company, Bombas, which appeared on "Shark Tank" in 2014 and now just three years later is celebrating the donation of one million pairs of socks to those in need.
Finally, when asked about the sharing economy, John said he's very bullish on everything from Uber, to AirBnB to co-working environments. He said people want to be with like-minded people and co-working provides that and allows for the sharing of ideas.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Larry Williams over the chart of Costco (COST) - Get Costco Wholesale Corporation Report , an Action Alerts PLUS holding, to see if the retailer could be poised for a breakout to the upside.
Williams first looked at the inter-market relationship between Costco's stock and the U.S. Dollar Index, noting the tight relationship between the price of the dollar and Costco's shares. With the dollar on the verge of a rally, Williams felt Costco would likely rally too.
Williams next looked at a daily chart of Costco alone, noting that the stock has been trading sideways for five weeks, despite a strong quarter posted in September. This pattern may be coming to an end however, as Williams used a proprietary "professional accumulation" metric to determine that large investors are now slowly accumulating shares, after unloading them in August.
Finally, Williams called attention to his namesake, the Williams Oscillator, a momentum gauge that remains in oversold territory and also signals a rebound may be at hand.
Taking all of these cues, Cramer turned to the fundamentals of Costco, noting the company's strong 3% same store sales growth last quarter and its successful switch to Visa (V) - Get Visa Inc. Class A Report as its credit card of choice. He said when the technicals and the fundamental align, that's something special.
In the Lightning Round, Cramer was bullish on Yum! Brands (YUM) - Get Yum! Brands, Inc. Report , Baker Hughes (BHI) , Halliburton (HAL) - Get Halliburton Company Report , Monster Beverage (MNST) - Get Monster Beverage Corporation Report , Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report and Scotts Miracle-Gro (SMG) - Get Scotts Miracle-Gro Company Class A Report .
Cramer was bearish on Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report , Kohlberg Kravis Roberts (KKR) - Get KKR & Co. Inc. Report , Transocean (RIG) - Get Transocean Ltd. Report , INSYS Therapeutics (INSY) and Sarepta Therapeutics (SRPT) - Get Sarepta Therapeutics, Inc. Report .
For his "Executive Decision" segment, Cramer spoke with Beth Mooney, chairman and CEO of Key Corp (KEY) - Get KeyCorp Report , the bank that just posted a 4-cents-a-share earnings beat and announced that its merger with First Niagara is exceeding expectations, news that sent shares up a quick 5.8% on the day.
Mooney said that Key's performance this quarter was driven first by the solid performance of their stand-alone business, with commercial lending up by 11% with expenses well controlled. Additionally, the quarter was the first to include the merger of First Niagara, which provided Key with $35 billion in additional assets and strong loan and deposit growth.
Key continues to invest in its products and capabilities, Mooney explained, and she believes Key is taking share from competitors as a result. She noted that slow but steady economic growth in the regions they serve is translating into customers being cautiously optimistic about the future. "It's a good time to be in the Midwest," Mooney concluded.
Finally, when asked whether Key can benefit from the troubles of rival Wells Fargo (WFC) - Get Wells Fargo & Company Report , Mooney said that all banks need to stay true to their clients' needs and measure success by the outcomes they provide, not by internal metrics.
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, PNRA, GE, DOW, COST, V, BMY and WFC.