Cramer's 'Mad Money' Recap: Bears Have No Place to Hide

Click here for an archive of Jim Cramer's Mad Money recaps.


The market is still trending higher because the bears are losing their places to hide and the bulls are just winning, Jim Cramer told the viewers of his "Mad Money" TV show Friday.

Cramer said today was another day where the bears and shorts lost another reason to be negative on the markets.

The bears thought the Treasury Department's banking stress test was a win-win, he said. That's because they believed the tests could've been too tough and the government would've been forced to gobble them all up.

On the other hand, they reasoned the tests could've been too easy, and the whole thing would've been called a sham. Yet in the end, the Treasury stress test was exactly what the bear didn't want, namely a statement that everyone needs more capital, and more time for the banks to find it.

With stress tests now a non-issue, the bears have only valuations to scare off investors with, said Cramer. However, he said, the only problem with that is that valuation is in the eye of the beholder.

In the battle of hedge funds versus mutual funds, the mutual funds are winning, said Cramer. These funds need to get fully invested and are buying stocks faster than the hedge funds can short them.

Cramer cited example after example where the big money is buying in, and taking stocks higher. In the eyes of the mutual fund managers, these stocks appear cheap: Fortune Brands ( FO), Honeywell ( HON), Microsoft ( MSFT), Bank of America ( BAC) and Schlumberger ( SLB), said Cramer.

If you look at a one-month chart of these stocks, they're expensive, but if you look at a one-year chart, you'll see why the bulls are winning, he said.

Speculation Friday

In this segment, Cramer turned to the financial sector and recommended First Niagara Financial Group ( FNFG), a regional bank in upstate New York that's making all the right moves.

BankingMyWay

"Stop stressing about the stress tests," said Cramer. The real action, he said, is in the ultra solvent regional names like First Niagara and First Merit ( FMER) in Ohio, who Cramer previously recommended.

Cramer said the story of First Niagara is simple: Thanks to the government, the company is now expanding into western Pennsylvania, as PNC Financial ( PNCF) is forced to sell branches to First Niagara in order to complete its merger. The company issued $361 million worth of new stock this week to fund the acquisition, only to see shares continue to rise in value.

But there's more to love at First Niagara, said Cramer. The new equity offering allows the company to also pay off its TARP money, making it even stronger than it already is. First Niagara already sports a small net charge off ratio and has fewer bad loans on the books than similar banks its size.

With the new acquisition, First Niagara will become the largest bank in western Pennsylvania almost overnight.

Am I Diversified?

Cramer spoke with callers about their portfolios to see what it takes. The first caller's portfolio included UnitedHealth Group ( UNH), Big Lots ( BIG), Cliffs Natural Resources ( CLF), Priceline.com ( PCLN) and ConocoPhillips ( COP).

Cramer said this portfolio was "perfection."

The second caller's top holdings included General Electric ( GE), CitiGroup ( C), Bank of America ( BAC), Pfizer ( PFE) and Genworth Financial ( GNW).

Cramer said this portfolio needed some radical action to unload the extra financials in favor of stocks in other sectors.

The third caller had AES Corp ( AES), Apollo Group ( APOL), Wells Fargo ( WFC), Oracle ( ORCL) and Sun Microsystems ( JAVA) as their top five stocks.

Cramer said there were too many financials and two of a kind in technology. He recommended adding a healthcare and a housing-related stock.

Mad Mail

In this segment, Cramer told a viewer that he doesn't expect a lot from Wal-Mart ( WMT) and McDonald's ( MCD), given they're defensive stocks, but he advised holding them as long-term investments.

Lightning Round

Cramer was bullish on Occidental Petroleum ( OXY), ConocoPhillips ( COP), Celgene ( CELG), Taiwan Semiconductor ( TSM), Staples ( SPLS), Terra Nitrogen ( TNH) and General Dynamics ( GD).

Cramer was bearish on Exxon Mobil ( XOM), Emergent BioSolutions ( EBS), Office Depot ( ODP) and Mosaic ( MOS).

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 long Wells Fargo, ConocoPhillips, General Electric, Celgene, Wal-Mart.

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.