Jim Cramer likes best-of-breed stocks. I have a story about this at the end of this article about the first time I met Cramer, which describes his "best of breed" strategy a bit more.

But two weeks ago on "Mad Money," he put this "best of breed" strategy into quantifiable practice when he told his viewers that "stocks that go to $80 a share in a bull market tend to go to $120, as long as the bull market keeps going."

At Stockpickr, we set up a portfolio of stocks in the $80 to $90 range that just broke out. We also filtered all of the stocks in this portfolio so it only includes profitable companies with low P/E ratios , so they have room to move. We also limited our view to stocks that had lower P/Es than their sector average and showed recent insider buying.

Here's the full portfolio.

First up is Leap Wireless ( LEAP), which is a relativity unknown international wireless company. Leap offers digital wireless services in the U.S. under the Cricket and JumpTM Mobile brands. The company offers unlimited local and U.S. long-distance service from the Cricket service area and unlimited use of multiple calling features and messaging services.

Leap also has impressive growth (as per its international exposure) and its quarterly revenue growth -- which is up 46% year over year -- shows that.

Leap could hit $120 as it continues to expand into more international markets. This will fuel the company's growth.

Next up is Potash ( POT). Potash engages in the production and sale of fertilizers and related industrial and feed products. The company manufactures and sells solid and liquid phosphate fertilizers, animal feed supplements and industrial acid, which is used in food products and industrial processes.

Potash just hit $80 a share two weeks ago as the whole phosphate fertilizer sector is quietly rallying. These fertilizers are essential to the development of corn and other agriculture items, which currently are domestic plays as well as international plays. Terra Nitrogen ( TNH) has also had a monster move and shows no signs of slowing down.

Potash is also a favorite of Pequot Capital Management holdings.

Potash could see $120 before it's all said and done; also look at TNH.

Next up is Terex ( TEX), which manufactures equipment for construction, infrastructure, quarrying, mining, shipping, transportation, refining and utility industries worldwide. Terex has been dragged down the last few days by the horrible Caterpillar ( CAT) report. While Terex does do some construction and should thus be affected to a certain degree by the CAT report, it also works in some very hot sectors like infrastructure and mining. Terex has a great balance sheet with good year-over-year growth.

If housing ever forms a bottom, Terex could easily be pulled to $120.

Other stocks that are worth looking at are Kennametal ( KMT), Chevron ( CVX), Enterra Energy Trust ( ENT), Schlumberger Limited ( SLB), Freeport-McMoRan Copper & Gold ( FCX) and about a dozen others we have in the portfolio.

Again, to see a more in-depth view into all of these stocks and the portfolio with Jim's recap, click here.

I posted this next story as a response to a question that Jim posted on Stockpickr Answers. It wasn't really a question but more of a response to someone who had said some inappropriate things about Jim. People started telling some Cramer stories, so I posted this about the first time I had actually met Jim face to face, a full three years after I had been corresponding with him. I think it's reflective of Jim's "best of breed" strategy.

Early in 2005, I got the call from "Mad Money's" producers ("Mad Money" hadn't even started yet) to come out to the set in New Jersey and attend a dress rehearsal. Jim wanted to try out what it would be like to have a guest on the show, so I was asked to go.

For most of the show, I just watched from the sidelines. On the show, Jim said a couple of things I remember very well.

He said nobody every gave IBM ( IBM) much credit, that it was always a laggard in the Dow. But "mark my words," he said, "IBM will be the one to bring the Dow to new highs." When the Dow closed above 14,000 for the first time, all of the newspapers said it was due to IBM's strong earnings report. IBM, in fact, brought the Dow to new highs and IBM is at or near a multiyear high on the strength of a massive share buyback. In his book Mad Money, Jim says to buy the buybacks where companies are actually reducing shares outstanding. IBM has been taking several percent a year off its shares outstanding due to buybacks.

Jim also went into a big description of the difference between commercial banks (like Wells Fargo ( WFC) and Washington Mutual ( WM), for example) and investment banks. I thought it was very educational.

Then it was my turn. Jim and I were going to argue about stocks. He liked Google ( GOOG) and I didn't. I liked AskJeeves and Terra Lycos. He said, "Never go for third tier, always go for best of breed." I argued for the companies' strong balance sheets and cash flows, albeit declining, and said that they would be buyout candidates.

In the short term, I was right. Within six months, both got acquired for about 20% higher. However, Google is about 160% higher. So Jim's "best of breed" strategy was ultimately stronger than my cigar-butt strategy.

Since that dress rehearsal, I haven't seen a "Mad Money" show where I haven't learned something.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.

James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for The Financial Times and the author of Trade Like a Hedge Fund, Trade Like Warren Buffett and SuperCa$h. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback; click here to send him an email.

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