Cramer's 'Mad Money' Recap: Stay Ahead of Money Managers

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Is this a bull market or a bear market?

Jim Cramer told the viewers of his "Mad Money" TV show that it's neither, but it is, however, a great opportunity to make money.

Cramer said his philosophy is different than that of most money managers, who promote "buy and hold," and tell investors to always stay fully invested. Cramer's philosophy is "buy and homework," --- i.e., buying stocks, keeping an eye on them, and selling them when conditions change.

That's why in September, 2008, at Dow 11,000, Cramer told investors to sell, and reiterated that call in October 2008 at Dow 10,000. That's also why he advised investors to buy in the second week of March so they could catch the beautiful 21% rally.

Cramer told viewers to be skeptical of the money managers they see on TV and read about in the papers. He said these managers are largely bias, and while not all are bad, their incentive is to keep investors in the markets and generating commissions.

After a long career as a broker, a hedge fund manager and now a charity portfolio, Cramer said he's just looking out for the little guy, trying to help them avoid big losses. The other guys, he said, never admit they're wrong, they're just "early."

Cramer told viewers candidly to sell some of their big gains this week on Monday.

Speculation Friday

For "Speculation Friday," Cramer recommended chipmaker Silicon Labs ( SLAB), on the heels of of his recommendation of rival Taiwan Semiconductor ( TSM).

BankingMyWay

Cramer said after positive comments made by Taiwan Semiconductor that the outlook for semiconductors is better than previously forecast, Silicon Labs is the logical choice to take advantage of the pin action.

Cramer said Silicon Labs makes "disruptive technology." The company enters larger, mature markets and integrates multiple parts into a single chip, allowing manufacturers to make items small and more energy efficient. The company's products are in all of the hottest gadgets, from cell phones, to GPS and from LCD TV's to cars.

With strong orders coming from China and a worldwide shortage of chips, Cramer said Silicon Labs should continue to do well. The company has a broad base of stable customers and boasts 61% gross margins. Silicon Labs has also aggressively cut costs, making it leaner and meaner than ever before.

Trading at just $27 a share, with $7 a share in cash, Cramer said Silicon Labs is a steal with its shares trading just 21 times earnings, the low end of its historical range. Cramer reminded viewers that Silicon Labs is a speculative stock, meaning it's for a trade only.

He said to ride the stock higher as this quarter becomes better than last quarter before selling it.

A Counter-Trend Stock

Cramer said investors need a good counter-trend stock in their portfolio, one that others are selling irrationally and are just throwing away at bargain basement prices.

One stock that fits the bill is Clorox ( CLX), a company Cramer said is an excellent consumer products company with the resources to raise its dividend.

Cramer said Clorox currently yields 3.6%, but is expected to earn revenue more than two times its payout. Wall Street is expecting the company to raise its dividend in May by 8.6%, taking the yield to 3.8% at current levels.

Clorox may be turning the corner in this recession, with private label competition taking less share than in the previous quarter, he said. The company is also benefiting from lower commodity costs.

All in all, Clorox should do better than expected said Cramer.

Turning to valuation, Cramer said Clorox trades at just 13 times its earnings, a big discount from its average 19 times multiple over the last five years. If it returns to that historical average, it could propel shares to $77 a share, he said.

Outrage of the Day

Cramer turned his sights on Wall Street's biggest critics and cynics. "Where were all of you over the last eight years?" he asked.

Cramer said he, too, is appalled at the bonuses paid by AIG ( AIG), the anger should be directed at the regulators who let it happen and not the company.

No one stepped up during the Bush administration and stopped the dismantling of the uptick rule, or questioned the allowance of naked shorting, or was outraged at special tax treatment for hedge funds, he said.

Now is not the time to be surprised at Wall Street's greed, he said, adding focusing on stupid, little tangental issues now is not going to help matters.

Lightning Round

Cramer was bullish on D R Horton Inc ( DHI) and Marathon Oil ( MRO).

Cramer was bearish on Whole Foods ( WFMI) and International Paper ( IP).

Check out the latest edition of "Cramer's Take on Top-Searched Stocks" on Stockpickr.

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

For "Mad Money" performance statistics and other links, check out Mad Money stats
At the time of publication, Cramer was not long on any stock.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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