'RealMoney' Radio Recap: Methods to His 'Madness'

Cramer tells his detractors that doing homework and taking some off the table are big parts of his game plan.
Author:
Publish date:

Jim Cramer has been getting a lot of flak, and he's not happy about it, he told his

"RealMoney" radio show listeners Wednesday. That's because often the facts are not supporting the naysayers.

Cramer said his bullish call on

Rediff

(REDF)

was "the gutsiest call" he's made this year and that he was "bombarded with emails about what an idiot" he is, immediately after he made the call.

Cramer recommended Rediff at around $16, and now it's near $32, doubling in just 18 days, he said.

The Rediff call is something Cramer mentions to illustrate his point. Even though detractors insisted that he was a momentum chaser who knew nothing about the Indian Internet market, Cramer said that he had done his homework and truly believed that Rediff would run higher.

Moreover, Cramer reminded listeners that he has never recommended putting all of one's position on at the same time and that he always tells people to ring the register and take some off the table as their stocks run higher.

Critics say that Cramer only likes

Nabors

(NBR) - Get Report

and

Halliburton

(HAL) - Get Report

at their highs, and then he distances himself when they hit their lows.

He reminded listeners that he recommended Halliburton a year ago during a talk delivered at the 92nd Street Y in New York City. He added that at $27, Halliburton was then the single best stock he knew and that he has remained behind the company ever since.

Image placeholder title

When the stock ran up to the $60s and then backed up to the $50s, Cramer said that he was still supportive of the stock and that he was bullish even when it split.

At that point, Cramer said he was so bullish that he even forgot to tell people to ring the register and take some -- not all -- off the table so that they could lock in profits.

And Cramer said that investors with "guts" would have been buying Halliburton all the way down into this "delicious pullback."

But, he warned, if you commit the sin of arrogance by putting all of your position on at one level, Cramer will "disavow" any connection to your trading abilities.

"When people believe that my methods amount to nothing more than being a momentum harlot ... it means that a bottom has been put in and the guys betting against me are about to get their clocks cleaned," he said.

Cramer is sticking by the game plan that has worked for him for so many years: doing his homework, taking money off the table as stocks run higher, buying stocks when they are weak and never putting all of his position on at once.

Good Nabors

A caller said that he had bought a quarter position of Nabors at $75, listened to the call and couldn't figure out why it had fallen so much.

Cramer said that the stock has been downgraded to sell by Merrill Lynch, a move he believes is wrong. He said that the company is seeing 50% growth and selling at 10 times earnings.

If the stock runs up to its 52-week high at $82, you can take the money off the table and make it a trade, he told the caller.

He also commended a caller's decision to buy

Grey Wolf

(GW)

as a trade heading up to earnings. Cramer said that the smaller contract driller is "not best of breed," but that it happens to be in the right sector.

Cramer said the stock could go to $10, in part because it will soon be able to rebid 40% of its rigs at much higher rates than he previously thought they'd be able to get.

He also said that

Cemex

(CX) - Get Report

is down on a pullback. He explained that the stock ran higher after the tariff situation between Mexico and the U.S. shook out and that smart money got in on the news and drove the stock to the high $60s.

Now that it has come down near $62, Cramer said he would be a buyer here as an investment in what he believes is a premium cement company.

But Cramer said he would not pick up the shares as a trade because he is not sure how long it will take for the story to turn around.

Are You Diversified?

Each week Cramer gives listeners a chance to call in and find out if their portfolios are diversified; and this week all of the callers were blessed as "diversificated."

The first caller owned

Cincinnati Bell

(CBB) - Get Report

,

China Energy Savings

(CESV)

,

JP Morgan Chase

(JPM) - Get Report

,

Charter Communications

(CHTR) - Get Report

and

GPC Biotech

(GPCB)

.

Cramer said that while this portfolio was technically diversified, it was too speculative.

He said that speculation is okay if it makes 20% or less of a portfolio and that China Energy Savings, Charter Communications and Cincinnati Bell were all speculative stocks. Cramer told the caller to consider a high-quality industrial such as

Caterpillar

(CAT) - Get Report

.

He added that he would stick with Cincinnati Bell as the speculative play.

Cramer called a portfolio with

Schering-Plough

(SGP)

,

GE

(GE) - Get Report

,

Harley-Davidson

(HDI)

,

BP

(BP) - Get Report

and

Home Depot

(HD) - Get Report

an incredibly diversified portfolio that included a high-quality drug play in Schering, a global industrial company in GE and an excellent retailer in Home Depot.

However, he said that he preferred

Occidental Petroleum

(OXY) - Get Report

to BP. And while Harley is not his favorite pick, Cramer said that it's a cult stock and a cult product that is well-established and here for the long haul.

Cramer has been buying Schering for his

Action Alerts PLUS charitable trust , and he likes the company's management.

He embraced all of the stocks in a portfolio that contained

Yahoo!

(YHOO)

,

Starbucks

(SBUX) - Get Report

,

Altria

(MO) - Get Report

,

UnitedHealth Group

(UNH) - Get Report

and

Dow Chemicals

(DOW) - Get Report

.

And he said that he liked a portfolio that contained

Acadia Pharmaceuticals

(ACAD) - Get Report

,

Airgas

(ARG)

,

Dynegy

(DYN)

,

JDSU

(JDSU)

and

iStar Financial

(SFI)

.

Cramer also liked Acadia as a speculative medical play, Dynegy as a power-plant maker that has performed a "fantastic recovery" and iStar as a good financial play.

He iterated his well-known love of JDSU and said that he likes Airgas, too.

In the fixing a 401(k) segment, a listener wanted to know if he should put his $150,000 inheritance into stocks or plow it into his retirement.

The listener was 45 years old and had $40,000 saved as well as $100,000 in a 401(k) composed of Vanguard funds.

Cramer said that he would put it into the 401(k), which he believes is the most important savings stream a person can have. Not until there's $400,000 to $500,000 in retirement would Cramer recommend playing around with mad money.

At the time of publication, Cramer was long Halliburton, Schering-Plough, Altria, Occidental Petroleum, Yahoo! and UnitedHealth Group.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, 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

Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click

here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click

here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict."