"Everything we thought would happen in the '90s when we fell in love with the Web is finally starting to happen," Jim Cramer told the audience of his "Mad Money Main Event II," a special version of the TV show filmed before a live audience Wednesday. Recent strong earnings reports from Google ( GOOG) and Yahoo! ( YHOO) demonstrate there is "still a lot of money to be made online." Google eclipsed Cramer's $350-a-share price target Wednesday, and he unveiled his new price target of $450. That target is based on $9 per share in earnings power and an earnings multiple of 50, he said. "If you're not in it, I still think you can be in it," he said. If you have owned Google from much lower prices, Cramer said not to be a hog. Take a little off the table and let the rest run, he said. Google and Yahoo! notwithstanding, Cramer said the hottest part of the Internet is "the Internet behind the Internet," which is e-commerce. The best way to play e-commerce is through the online bill-payment companies, he said. Their business is "white hot." The two companies that dominate online bill payments are Online Resources ( ORCC) and CheckFree ( CKFR). However, Online Resources is "too speculative for me," said Cramer. He would buy CheckFree, he said, which just reported a great quarter. Cramer also mentioned Digital Insight ( DGIN) as another play on online bill payments but said Digital Insight has had "sluggish revenue growth" compared with CheckFree and Online Resources. Only 20% of people are currently using online banking, said Cramer. There's a lot of growth left. It's "time for you to go check-free and to own the stock," he said. Commenting on Amazon.com ( AMZN), Cramer said the company reported an unimpressive quarter Tuesday. In response to questions about Overstock.com ( OSTK) and IACI/Interactive Corp ( IACI), Cramer said both were sales.
The DonaldDonald Trump joined Cramer as a special guest on the show to talk about, what else? Real estate. Real estate has "beaten the pants off stocks," over the last five years, Cramer said. "And, it will continue," said Trump, "as long as interest rates stay down," and he believes they will. "If they don't stay down, you've got bigger problems than real estate," Trump said. Cramer asked Trump about stocks' relative underperformance vs. real estate. "A lot of people aren't feeling great about the economy," Trump said. Nevertheless, Trump said homebuilding stocks were interesting buys here, adding that those companies are generally well run. From his own experience in high-end residential development in the Los Angeles area, those homes are currently selling as fast as he can build them, Trump said. Of the companies Trump has worked with on his "Apprentice" TV show, Trump said he likes the stocks of Procter & Gamble ( PG) and General Electric ( GE), the parent of NBC and CNBC. CEO Jeff Immelt and Chairman Bob Wright "are two of the finest business executives I've ever met," he said. Another company, General Motors ( GM), is going to be very interesting, said Trump. "It's either going to be a great one, or it's going to be in trouble. I think the unions are going to be listening to General Motors, and things maybe can work out."
Global Warming Is HotWhere some see problems, Cramer sees opportunity, and Cramer sees opportunity in global warming. Although there are environmentally and socially responsible investments, Cramer would rather choose investments based on the best opportunities to make money and use the proceeds to do good, he said.
Quick TakesIn response to a question about Sirius Satellite Radio ( SIRI), Cramer said the stock "could be headed to $7." Sirius closed at $6.30 Wednesday. Commenting on Procter & Gamble ( PG), Cramer likes the stock and said P&G is "the best managed company in the world." Of Shaw Group ( SGR), Cramer said, "I was negative on it at $23. I thought it was good for $3. I was wrong." Shaw Group closed at $26.51 Wednesday.
Lightning RoundBullish Cramer was bullish on MetLife ( MET), Prudential Financial ( PRU), American International Group ( AIG), Boeing ( BA), PepsiCo ( PEP), Banco Bradesco ( BBD), Bancolombia ( CIB), Microsoft ( MSFT), HDFC Bank ( HDB), Motorola ( MOT), Cemex ( CX), Altria ( MO) and Titanium Metals ( TIE). Bearish Cramer was bearish on Johnson & Johnson ( JNJ), H&R Block ( HRB), Fairmont Hotels & Resorts ( FHR), Tibco Software ( TIBX), Knot ( KNOT), Wells Fargo ( WFC), Morgan Stanley ( MWD), Nordstrom ( JWN) and Starbucks ( SBUX).
Interested in more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. It's a series of articles from Cramer on how to become a better investor. The following table lists some of the rules that Cramer dissects.
|1.||Pigs Get Slaughtered||2.||It's OK to Pay the Taxes|
|3.||Don't Buy All at Once||4.||Buy Damaged Stocks|
|5.||Diversify to Control Risk||6.||Do Your Homework|
|7.||Don't Panic||8.||Buy Best-of-Breed|
|9.||Defend Some Stocks||10.||Don't Bet on Bad Stocks|
|11.||Own Fewer Names||12.||Cash Is for Winners|
|13.||No Regrets||14.||Expect Corrections|
|15.||Know Bonds||16.||Don't Subsidize Losers|
|17.||No Room for Hope||18.||Be Flexible|
|19.||Quit When Execs Do||20.||Patience Is a Virtue|
|21.||Be a TV Critic||22.||When to Wait 30 Days|
|23.||Beware the Hype||24.||Explain Your Picks|
|25.||Find the Bull Market|
|Check back for more of Cramer's Rules|