'RealMoney' Radio Recap: Rediff Restraint

Cramer says the stock's quick run-up indicates a lack of trader discipline.
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Should

Rediff

(REDF)

, the biggest Internet play in India, be up $5 just because Jim Cramer featured the stock on his

Mad Money

television show? That's the question Cramer posed to his

"RealMoney" radio show listeners Wednesday.

"No one is that good, certainly not me," Cramer said, adding that he isn't just being modest.

The stock would have gone up anyway because it had taken a hit on an interest rate hike in India, and it was "a coiled spring" waiting to move higher, he added.

Cramer said he is "chastened" by this, and that if he owned the stock at $15 on Tuesday and it's up $5 now, then he would have to sell the stock or violate one of his most important rules: Bulls make money. Bears make money. Hogs get slaughtered.

If listeners believe what he believes, that Rediff is the Indian

Google

(GOOG) - Get Report

, there is no reason not to believe that it would have hit $20 eventually. But he said that what is "appalling" is that it got there in just one day.

This points to a problem with brokers and electronic brokers, he said.

"As a broker at Goldman Sachs, I simply wouldn't let anyone buy a stock that was up $4 or $5 unless it was a $100 stock -- even if I wanted the commission and it was the end of the month and I needed to make my numbers," he said.

He believes that a combination of brokers who won't put limits on their customers and customers who trade online without enough discipline to do the job pushed Rediff up so much.

Image placeholder title

It's not "irrational exuberance," he said, but rather the fact that people do not understand how to use limits.

"You must use discipline," he told listeners. "You must not get carried away ... and say that you'll buy Rediff at any price."

He added that the power of the Indian Internet market cannot be underestimated. As an example, Cramer cited Google, which just told the U.S. Justice Department that it wouldn't allow it to monitor Web searches to fight pornography.

But the company told China, the only Internet market larger than India, that it would accede to its every wish to help it censor political ideas, Cramer said.

Am I Diversified?

Cramer took calls from listeners who wanted to know if their portfolios are diversified. The strategy does limit some of the upside, he said, but it shields investors from harsh risks, too.

Cramer said that every listener who called in had a diversified portfolio, and he was pleased with the stocks that in the portfolio, too.

One caller owned

Walgreen

(WAG)

,

American Express

(AXP) - Get Report

,

Motorola

(MOT)

,

EnCana

(ECA) - Get Report

and

Procter & Gamble

(PG) - Get Report

.

Cramer called Walgreen, the nation's largest drugstore company, a screaming buy at $42. He said that American Express had a picture-perfect quarter and that he wants to see EnCana pull back a bit before buying more.

He called the next portfolio uniquely diversified. It included diversified manufacturer

Honeywell

(HON) - Get Report

, which he called too cheap, and

Ultra Petroleum

(UPL)

. He said that Ultra Petroleum just gave good guidance on how much oil it found, but that the guidance wasn't great, so the stock will pull back a bit.

There also was

Building Materials

(BMHC)

and retailer

Urban Outfitters

(URBN) - Get Report

. And finally the portfolio included Google. Cramer said that if the company disappoints the bulls, the stock will likely come down and create a buying opportunity for those who want to pick up some shares.

He said he fundamentally blessed every stock in a portfolio that included tech play

Palm

(PALM)

, health-care insurer

UnitedHealth

(UNH) - Get Report

,

Valero Energy

(VLO) - Get Report

, an oil refiner, restaurant stock

Papa John's

(PZZA) - Get Report

and

Legg Mason

(LM) - Get Report

, a financial company.

Another portfolio included

Bancolombia

(CIB) - Get Report

,

Allegheny Technologies

(ATI) - Get Report

,

Alkermes

(ALKS) - Get Report

,

Coldwater Creek

(CWTR)

and

Advanced Micro Devices

(AMD) - Get Report

.

Cramer said that each and every one of these companies are stocks that he has been bullish on during episodes of his show,

Mad Money

.

He also liked the companies in a portfolio that had UnitedHealth,

Australia & New Zealand Banking Group

(ANZ)

,

Whole Foods

(WFMI)

,

Caterpillar

(CAT) - Get Report

and

Matrix Initiatives

(MTXX)

.

401(k) Fix-it

Cramer did some work on a 401(k) that was divided between

(PSLAX) - Get Report

Putnam Small Cap Value Fund at 15% of the portfolio,

(PTTAX) - Get Report

PIMCO Total Return at 50% and

(DRGEX)

PIMCO RCM Global Equity fund at 35%.

Cramer said that it was a perfect mix for someone in their 50s or 60s, but he would want more exposure to equities for a younger investor.

He told a caller asking about the Canadian company

Miramar Mining

(MNG)

that he would have TheStreet.com's

Stocks Under $10 writers Dave Peltier and Will Gabrielski check out the company before he gave it a recommendation, because he doesn't know enough about it.

Cramer said that

Apple

(AAPL) - Get Report

will eventually see upside from its relationship with

Disney

(DIS) - Get Report

. However, in the near term the product transition to

Intel

(INTC) - Get Report

is weighing on Apple, and the Disney deal won't offset the effects of the transition.

At the time of publication, Cramer was long Intel, Motorola, Procter & Gamble and UnitedHealth.

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

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