'RealMoney' Radio Recap: Shorts Run for Cover

Cramer sees a sea change in market sentiment.
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Hedge funds are feeling the pressure, said Jim Cramer on Friday on his

"RealMoney" radio show. The average fund may be up about 8% to 12% this year, said Cramer, because they've been successful shorting stocks. But there's a sea change in the air, he said.

Cramer is sensing a change, because while stocks such as

Broadcom

and

Qualcomm

(QCOM) - Get Report

may have gone down at first on "silly" downgrades, they aren't down anymore.

Also,

Texas Instruments

(TXN) - Get Report

fell recently, and Cramer said to buy. When it went down some more, he advised doubling down. That advice is also working big time, he said.

Other bullish developments, said Cramer, include money flowing into tech stocks and financial stocks, as oil stocks have fallen. The incoming

Federal Reserve

chairman seems less set in his ways than the last one. A cold snap has ignited retail stocks. A takeover of

Georgia-Pacific

(GP)

has been bullish for industrial stocks. And

General Motors

(GM) - Get Report

may be going bust, but instead of bringing down the market, everyone buys

Toyota

(TM) - Get Report

, he said.

Cramer believes hedge funds have no choice but to cover their shorts and go long, lest they see their gains for the year wiped away. The individual investor is back, said Cramer, and that investor cares about the market for the first time in six years, he said. They won't stop caring in a day or two, he said.

If Cramer were at his hedge fund, he'd tell his team no more shorting for the rest of the year. "It's too late to short. It's time to buy," he said.

Cramer Unstumped

Stocks Under $10

co-author Will Gabrielski joined Cramer to decipher stocks that had stumped Cramer on Thursday's during the "Stump Cramer" segment of the show.

Gabrielski said

CyberSource

(CYBS)

, an electronic payment solutions provider, is an interesting company, but at 45 times earnings, the stock is "really expensive." Instead, he likes

CheckFree

(CKFR)

and

Online Resources

(ORCC) - Get Report

, a stock covered in the

Stocks Under $10

newsletter.

Akorn

(AKN)

is also a "really expensive" stock, said Gabrielski, and its average daily volume is under 100,000 shares a day, he said, which means it is not on the radar of most institutional investors. The drugmaker has "nothing in the pipeline," he said, and he doesn't see any reason to own the stock.

Gabrielski is also not a fan of radioactive prostate cancer treatment device maker

Theragenics

(TGX)

, which has gone from making $30 million a year to losing money, he said.

Gabrielski was positive on

Bodison Biotech

(BBC) - Get Report

, a Chinese organic fertilizer producer. He said the company seems legitimate and just received a two-year exemption from paying taxes from the Chinese government.

Commenting on

Capstone Turbine

(CPST) - Get Report

, Gabrielski said he believes if one can stomach the volatility in the stock, it's a "great holding right here." He doesn't buy one of the knocks against the stock that the company is promotional. He said that if the company were promotional, it would have issued a press release regarding

Wal-Mart's

(WMT) - Get Report

test of

United Technologies'

generators, which use Capstone microturbines. Gabrielski also believes that even though Capstone has a negative gross margin, gross margin improved from negative 80% to negative 20% in the last quarter, and he believes it will continue to improve.

Gabrielski also commented on

Grey Wolf

(GW)

, saying he believes it will become a "double-digit stock" over the next 12 months because of demand for oil and gas exploration. Grey Wolf traded at $7.58 late Friday.

Listeners' Questions

Cramer recommended that a 30-year-old listener stick with the

(ITHAX) - Get Report

Hartford Capital Appreciation Fund and the

(ACSTX) - Get Report

PF Van Kampen Comstock Fund in his retirement portfolio. Cramer would jettison the

(ACENX)

Van Kampen Enterprise Fund, calling it "just another growth fund" with "terrible" performance. He recommended skipping the

(VGENX) - Get Report

Vanguard Specialized PTS Energy fund, as Cramer does not endorse owning sector funds in a 401(k).

In response to a question on

GameStop

(GME) - Get Report

, Cramer said the word that GameStop might not have enough Xbox 360s to meet demand is "kind of heartening," because it means GameStop will be able to "pretty much charge whatever they want." Cramer said he was told he would be able to get a voucher for an Xbox 360 if he stands in line at midnight. Cramer said GameStop, which traded at $36.07 late Friday, should be trading near its 52-week high, of $38.41.

Cramer is "completely convinced that owning

Microsoft

(MSFT) - Get Report

here is a terrific idea." He believes the Xbox 360 will be huge, and he is also bullish on Microsoft's rollout of its new Vista operating system next year. He considers Microsoft a "core position."

Commenting on Friday's

Under Armour

(UARM)

IPO, Cramer said he believes the stock will go to $30. However, if one were able to buy on the offering at $13, he would be tempted to ring the register. Under Armour traded at $25.42 Friday afternoon.

Lightning Round

Bullish

Cramer was bullish on

Koor Industries

(KOR)

,

Alvarion

(ALVR)

,

Motorola

(MOT)

,

HDFC Bank

(HDB) - Get Report

,

Gilead Sciences

(GILD) - Get Report

,

Yahoo!

(YHOO)

,

American Science & Engineering

(ASEI)

and

Autodesk

(ADSK) - Get Report

.

Bearish

Cramer was bearish on

First Israel Fund

(ISL)

,

aQuantive

(AQNT)

and

Sniffex

(SNFX)

.

At the time of publication, Cramer was long GameStop, Motorola, Microsoft, Qualcomm and Yahoo!

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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