Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (TheStreet) -- The markets are always thinking five steps ahead, even if those steps are all wrong, Jim Cramer told his Mad Money TV show viewers Wednesday. Cramer said there are five groups of investors fighting over the direction of the markets, making for a confusing jumble of cross-currents.
The first group believes the U.S. economy is strong and only getting stronger, Cramer said. This group is buying anything tied to the economy and is only concerned over the stronger dollar.
The second group believes the U.S. economy has hit its peak and is expecting the Federal Reserve to begin raising interest rates any moment to spoil the party.
Cramer said the third faction are people like him, people who care about individual companies and their earnings. This group buys what's working and has piled into the biotechs, social media stocks and cloud companies as positive earnings came to light.
Meanwhile, the fourth group is focused on the geopolitical and how sanctions against Russia will hurt the industrials and the oils. This group is selling on a regular basis.
The final group is enticed by rumors and special situations. This group is buying what the activist investors are buying and are looking for the next possible takeover target in companies like Yelp (YELP) - Get Free Report.
All together, these groups are fighting one another, Cramer concluded, which is why the averages barely budged in today's session.
Executive Decision: Tom Quinlan
For his "Executive Decision" segment, Cramer spoke with Tom Quinlan, president and CEO of R.R. Donnelley & Sons (RRD) - Get Free Report, the commercial printing and communications company that just delivered an earnings beat of 7 cents a share while reaffirming full-year guidance. Shares of Donnelley are up 40% since Cramer first recommended the company 13 months ago.
Quinlan explained that while commercial printing will always be at the core of its business, Donnelley helps companies provide a connected experience for their customers whether it's in print or digital.
Quinlan also talked about his company's shareholder-friendly nature, pointing out both the sizable dividend and share repurchase programs.
Cramer said there's clearly a disconnect between all of the exciting things Donnelley is working on and the share price. He continues to recommend the stock.
Why Panera Bread Isn't Toast
Did the markets convict the wrong stock? That's sure what it felt like after Buffalo Wild Wings (BWLD) posted a flawless quarter, only to see its shares fall 13%, while Panera Bread (PNRA) missed on both the top and bottom lines but saw its shares rally 3.5%.
This may seem like an apparent injustice, Cramer explained, but not if you look at where these stocks were coming from and what investors were expecting.
Shares of Wild Wings were already up 45% for the year and rallied from $150 to $167 a share going into the quarter, said Cramer. When the company delivered what was expected of it, investors locked in their gains.
But shares of Panera were down 17% in 2014 and going into the quarter the stock was at a new 52-week low. Thus when the company showed its first growth in nearly six quarters, the short-sellers were caught off guard and needed to cover in a hurry.
Cramer said Panera has a lot of positive things to say in its conference call, including its willingness to take down debt in order to accelerate their Panera 2.0 initiatives which have shown terrific results in their testing.
Using this prism, Cramer said the markets' actions were totally rational.
Executive Decision: Thomas McInerney
In his second "Executive Decision" segment, Cramer spoke with Thomas McInerney, president and CEO of Genworth Financial (GNW) - Get Free Report, the insurance provider whose shares fell sharply, down 14%, after the company reported a 4-cents-a-share earnings miss, primarily from its long-term care insurance division.
McInerney said there's no doubt that Genworth is losing money on some of its older long-term care policies as the cost of healthcare has risen sharply. However, he noted that over 30 states have approved premium increases to help offset these costs going forward.
When asked about concerns over the company's reserves, McInerney said Genworth's margins and reserves are often confused. He said the margins, the amount of future premiums the company expects to bring in, is in excess of $4 billion, which is very good. Reserves, the net present value of the claims then expect to pay, is current five timesclaims.
When asked about new regulations on insurers, McInerney said he feels the government has the right to ask insurers to boost their reserves and Genwroth is working with regulators to make sure they can easily comply with any new requirements .
Cramer remains upbeat on Genworth's outlook.
In the Lightning Round, Cramer was bullish on GT Advanced Technologies (GTAT) , Integrated Device Technology (IDTI) - Get Free Report, EMC (EMC) , Pitney Bowes (PBI) - Get Free Report, SeaDrill Limited (SDRL) - Get Free Report, Thermo Fisher Scientific (TMO) - Get Free Report, Regeneron Pharmaceuticals (REGN) - Get Free Report, Celgene (CELG) - Get Free Report, DexCom (DXCM) - Get Free Report and Priceline Groupundefined.
Am I Diversified?
In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.
Cramer blessed this portfolio as properly diversified.
The second portfolio's top holdings included EOG Resources (EOG) - Get Free Report, Gilead Sciences (GILD) - Get Free Report, CBS (CBS) - Get Free Report, VF Corp (VFC) - Get Free Report and Prudential (PRU) - Get Free Report.
Cramer said this portfolio was "perfect."
The third portfolio had Apple (AAPL) - Get Free Report, Walt Disney (DIS) - Get Free Report, Constellation Brands (STZ) - Get Free Report, Trinity Industries (TRN) - Get Free Report and Valero Energy (VLO) - Get Free Report as its top five stocks.
Cramer also blessed this portfolio as "perfectly diversified."
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.
-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here: Scott Rutt
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL