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'RealMoney' Radio Recap: Brand New Playbook

Cramer says signs point to a move to a positive strategy from a neutral one.

"The propensity to want to take profits after two beautifully up days cannot be ignored," Jim Cramer told his

"RealMoney" radio show listeners Thursday.

"But my take right now is -- don't ring the register," he said.

This is because it's time for the U.S. equity market to play catch-up with the rest of the world because the


is going to stop raising interest rates soon, Cramer said.

When it comes to thinking about why a market does well or badly, you need to look at that country's central bank, he said.

Why did the


end 2005 down while the rest of the world rocked? Cramer said it's because the Federal Reserve raised rates more than a dozen times in a row, and that by the end of the year there was still no sign that they would let up.

But now signs, including the weak housing market, the recently released Federal Open Market Committee meeting minutes and well-placed articles saying that the monetary tightening may soon end have changed the investment playbook.

"When we see these signs, we must change the way we invest," Cramer said, telling listeners to move to a positive strategy from a neutral one.

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He said that the banking sector cannot be ignored if the Fed is ready to let the overnight bank lending rate be.

He also said

Dow Chemical

TheStreet Recommends

(DOW) - Get Dow, Inc. Report

is a perfect example of a smart buy in this environment, and that people should be doubling down on the stock.

It's best-of-breed when it comes to plastics and the gold standard for many industrial companies, he said. But it's the fact that it's cheap that makes it a buy. Dow sells at 8 times earnings when the average company sells at 18 times earnings.

With natural gas prices falling, a company like Dow will save tremendously, and that combined with a more cooperative Federal Reserve will spark an unbelievable rally in good companies that are undervalued.

Let's Get Sirius

Thursday's stock "on demand," the company that listeners wanted to know more about, was


(SIRI) - Get Sirius XM Holdings, Inc. Report


Cramer began by saying that the company is not cheap, and that the good news about the company has already been priced in.

"What I've learned is that good news tends to be anticipated by the market six months before it happens," he said. In that time, there is movement in the stock and then when the good news actually happens people tend to sell.

But what's not in the stock, he said, is how many people will subscribe to Sirius six months from now.

The stock will do nothing until we find out how many people take Stern and whether Sirius overpaid for him or got a bargain.

"Right now, I think they overpaid," he said.

He recommended buying

XM Satellite Radio


for investors who really like the satellite radio business model.

Palm Reading

A caller who bought



in the high $20s wanted to know what to do ahead of the company's earnings announcement.

Cramer said that it's where the caller wants to be. He's encouraged by the fact that Palm produced its new


(VZ) - Get Verizon Communications Inc. Report

product so fast and that it has a lot of momentum.

He also said that

Urban Outfitters

(URBN) - Get Urban Outfitters, Inc. Report

is one of the most exciting retailers around, and that the stock is cheap right now at about $25.

But he told another caller to stay away from



. He said that even though the company is vigorously appealing a $244 million fine, it will probably have to pay.

He also called the product mix uninspiring, and said that he'd rather be in

JDS Uniphase



Email Bag

Reaching into the 'RealMoney' email bag, Cramer told an investor with only $1,000 to stay in funds until he has saved $10,000. Only then is it OK to buy individual stocks.

He suggested buying an S&P fund or the Vanguard Total Return fund.

Even though a listener said that

Best Buy

(BBY) - Get Best Buy Co., Inc. Report

has fallen about 12% since Black Friday, Cramer said that he still blesses the company.

The demand is there and it's best-of-breed, but Best Buy is just not executing well, he said. And that's an opportunity.

But Cramer won't pound the table on the stock because of lingering concerns about retail weakness.

Stump Cramer

Every Thursday, listeners can play "Stump Cramer" and find out just how many stocks he knows. But Cramer warned listeners not to go out and buy the stocks he doesn't know, no matter how good they sound, until Will Gabrielski from the's

Stocks Under $10 blesses them on Friday's show.

Cramer was stumped by



, a drug company that supposedly has the cure for methamphetamine addiction, as well as



, a company whose treatment for nonhealing wounds may soon see FDA approval.

But callers couldn't stump Cramer when it came to

Capital Corp. of the West


, a West Coast bank, gaming company

Empire Resorts

(NYNY) - Get Empire Resorts, Inc. Report


MC Shipping

(MCX) - Get Medley Capital Corp 6 1/2 % Notes 2015-30.1.21 Report

, a company that owns second-hand vessels and boats.Finally, Cramer reminded listeners that he's not a bull on oil and gas companies, but on drilling companies.

He added that





(MRVL) - Get Marvell Technology, Inc. Report

will still be winners in the tech sector, as well as


(NOK) - Get Nokia Oyj Report






(QCOM) - Get Qualcomm Inc Report


If you're stuck in


(CSCO) - Get Cisco Systems, Inc. Report



(DELL) - Get Dell Technologies Inc Class C Report




, he said to use this small rally as a chance to move on.

He likes



more than


(GOOG) - Get Alphabet Inc. Class C Report

, and said that


(AAPL) - Get Apple Inc. Report




should repeat 2005's excellent performances.

For investors who don't want to buy high multiple, expensive tech plays, then he said to look at


(INTC) - Get Intel Corporation Report



(MSFT) - Get Microsoft Corporation Report


At the time of publication, Cramer was long Intel, Lucent, Microsoft, Motorola, Qualcomm and Yahoo!.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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