When large institutions are deciding whether to put their money to work or not, they like to have a top-down view before they pick their stocks, Jim Cramer said on his

"RealMoney" radio show Wednesday.

Once they have their world view, they know what stocks to pick.

There are three camps of investing, he said. First, there is the hard-landing theory, in which people believe that the

Federal Reserve

will take interest rates too high, which will cause inflation.

Second, there is the soft-landing thesis, according to which, people believe that the Fed will gently raise rates until the economy cools -- and once it cools, the Fed will be finished raising rates, Cramer said.

In this scenario, the earnings in the economy are not destroyed, and a recession does not result.

The third camp has emerged since Monday, Cramer said. In this camp, there is a slowing in the economy, but a speed-up in inflation.

In both the hard- and soft-landing theories, there is no speed-up of inflation, just a diminution of it, Cramer said.

"I want to disagree with the third theory,

also known as the stagflation theory," Cramer said. "Because the only thing that works in the third camp is gold."

On May 12, gold hit $730; today it is at $630, Cramer said. This tells me the Fed is wrong because in stagflation, gold should be going higher.

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Right now the banks are moving up, Cramer said. This happens in a soft landing. If we were going through or nearing a recession, the banks would be near default.

"Today, things are not that bad," Cramer said. "But it changes every day. I don't want to get my hopes up."

Sector Sense

"The sector a company resides in accounts for 50% of its value," said Cramer, adding that infrastructure is a great sector to invest in now.

Although the infrastructure sector has been weak, this doesn't mean that the industry's orders have decreased or its projects have disappeared, he said.

Even though it might be difficult to see this now, Cramer believes that the orders for the infrastructure sector will pull through in 2007 to 2008. We have to look ahead, he said.

This group has the best outlook that I know of.

A stock in this sector that has fallen 30% overnight is the Swiss company

ABB

(ABB) - Get Report

, which Cramer owns for his charitable trust

Action Alerts PLUS.

This is a power-generation company that has been around forever, he said.

"I believe you should just go buy it," Cramer told listeners. "The stock has dropped hideously. For every one point down it has four points up -- that is a fabulous reward."

Cramer's Callers

The first caller asked about

Fortune Brands

( FO). Cramer said he likes the stock.

"People think housing has become annihilated by the reserve, but I don't think so," he said. "That's a short-term view."

Fortune is not just a just a housing play. The stock is up today, it has a very clean balance sheet and it's well-run, he said.

That it has been tarred by the housing downfall is a big mistake, Cramer said.

Cramer told a caller that he would stick with

Suncor Energy

(SU) - Get Report

. He said the Fed is not in charge of oil, even though some people may believe that it is, and we are going to be moving rapidly into oil sands.

When the next caller asked Cramer about

Chesapeake Energy

(CHK) - Get Report

, he said he would buy the stock.

The company has been down 6%, and people are running from it left and right, Cramer said. Yet the CEO of the company is buying more of the company's stock, he said.

"Do you think the CEO knows more about the stock?" Cramer asked. "I think so. I believe he knows what he's doing."

Chesapeake is the largest natural gas company in America, and I believe natural gas is going to rise, he said.

When asked about

Symantec

(SYMC) - Get Report

, Cramer said that people have been continually fretting that

Microsoft

(MSFT) - Get Report

, which he owns for his charitable trust

Action Alerts PLUS, can put Symantec out of business with a better virus software.

"As long as there's a Microsoft overhang, I will not push it now," Cramer said.

Cramer told a caller he wished he could be positive about

eBay

(EBAY) - Get Report

. Three of the company's biggest merchants recently dropped eBay, and since then, the company's transactions have slowed down, he said.

"People think eBay will learn to monetize its business, but I believe it's a sell," Cramer said.

Cramer gave

Bear Stearns

( BSC) a thumbs up, saying that he believes that it will deliver a good quarter, it is well-run and one of the best firms in its industry, he said.

Cramer also told a listener that

BHP Billiton

(BHP) - Get Report

is an excellent stock and a supermarket of minerals.

He said it's a great stock to own, and if he had to buy 300 shares, he would buy 100 now and wait for it to go lower to buy more.

When a listener asked about

RF Micro Devices

(RFMD)

, Cramer said it's winning a lot of business and outshining other companies in its industry.

"I would like a little pullback before buying it, but I like it," he said.

Cramer told a caller who asked about

Tupperware Brands

(TUP) - Get Report

that he liked

Newell Rubbermaid

(NWL) - Get Report

, which he owns for his charitable trust

Action Alerts PLUS, better.

I like their pots and pans, and I believe that the company has a better management than Tupperware, Cramer said.

Cramer advised a listener to hold off buying

Verizon

(VZ) - Get Report

, but he gave another caller the go-ahead for

MasterCard

(MA) - Get Report

.

At the time of publication, Cramer was long ABB, Microsoft and Newell Rubbermaid.

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

clicking here.

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