Cramer's 'Mad Money' Recap: Insana Sticks By His Call (Final)

Click here for an archive of Jim Cramer's Mad Money recaps. Click here to get Jim Cramer's Mad Money Post Game video exclusively on TheStreet.com.


Jim Cramer welcomed colleague Ron Insana to the "Mad Money" TV show Friday to defend his recent gutsy call to sell defensive stocks and buy into banks, insurers and home builders.

On Thursday night's show, Cramer took issue with some of Insana's picks and pans, and tonight it was Insana's turn to fire back.

According to Insana, we've reached a secular bottom in a lot of areas in the market, and with so many stocks priced for failure, he said there are incredible opportunities for investors.

Cramer Clearing House All things Cramer Mad Money Recap Trade With Cramer Free

He said that the pain is not over for home builders like Toll Brothers ( TOL), Lennar ( LEN) and Hovnanian ( HOV), all of which Insana endorsed.

However, he said that in a portfolio with limited funds, he needed to make a choice to either stay with the yields from defensive names, or make a bet on the eventual secular trends.

Insana said he's standing behind his call, even if unemployment continues to rise. In fact, he said he would not be surprised to see unemployment reach 11%. But, he said, historically if you'd invested in the markets at the peak of unemployment, you have been rewarded handsomely. Insana expects this time to be no different.

So while Insana admitted he may be early in recommending the home builders, he said they are all priced for failure, despite the fact they're buying land at incredibly low prices and the likelihood of further consolidation is high.

Turning to the banking sector, Insana said simply that if the banks are not going out of business, investors have to own them. He said his position is not necessarily bullish, but he no longer feels the world is going to end for this sector.

Cramer told viewers that it's always good for theses to be challenged, as Insana did for Cramer at the market lows in 1998, and as he is again now.

Investor Apathy

Cramer said investors have become too negative, and no one seems to care about good news anymore.

Cramer disagreed with this position, saying that the opportunities in the markets are seriously outweighing the risks. He said investors don't even realize how negative they've become and how they are ignoring the signal to buy.

Where is all the negative sentiment coming from? Cramer said it's coming first and foremost from the government and the Obama administration, who seems to introduce new regulations or taxes just about every day of the week.

Cramer said the Dow Jones Industrial Average could rise a few hundred points if only Congress would take a vacation already and stop holding hearings.

Cramer said the second reason for all of the negativity is the decline in oil prices. He said that for some reason everyone seems to think if oil's falling, everything else should too. "But isn't cheap oil, gas and plastics a good thing," asked Cramer.

He said the oil futures markets should have no bearing on the stock market, especially in light of recent manipulations.

Cramer said he's not buying into the negativity. Instead he said he would be buying into stocks like Honeywell ( HON) and Home Depot ( HD), two stocks he owns for his charitable trust, Action Alerts PLUS, along with Wal-Mart ( WMT).

Cramer also likes technology and recommended looking into AMD ( AMD), On Semiconductor ( ONNN) and Ciena ( CIEN).

Speculation Friday

Cramer found a way to profit from the recent cyber attacks that plagued government Websites as well as the sites of both the NYSE and Nasdaq exchanges.

He said that Internet security firm ArcSight ( ARST) may be at the beginning of a new speculative theme, as cyber attacks hit the mainstream.

Cramer said protecting your company's data from attacks is becoming big business, and companies like ArcSight are at the forefront. The company is benefiting from both more and more high profile attacks and from increasing requirements for companies to log their computer activity for compliance purposes.

Cramer said while ArcSight is a speculative play, it has everything he looks for, including a 34% growth rate, no debt, $91 million in cash on the balance sheet, new products and great traction with existing customers.

He said while ArcSight trades at 33 times earnings, the earnings estimates are too low and investors could pay up to twice the company's growth rate for the stock.

"There's a real need for cyber security," said Cramer, and ArcSight might just be the best way to profit from it.

Mental Toughness

In an atypical interview, Cramer welcomed all-star MVP shortstop for the Philadelphia Phillies, Jimmy Rollins, to the show to discuss the similarities between baseball and investing.

Rollins agreed with Cramer's theory that investing, like team sports, is all about mental toughness and staying in the game even during the losing streaks. He said that no matter what, investors should stay focused on getting to the top, and that they won't see the top until they've first seen the bottom.

Rollins said the worst thing you can do after a long losing streak is to swing for the fences all of the time. He said its better to calm down, get back into a rhythm, and keep keep making small steps towards success.

Lightning Round

ramer was bullish on Network Appliance ( NTAP), EMC ( EMC), Huntington Bancshares ( HBAN), Emerson Electric ( EMR), Baldor Electric ( BEZ) and Sallie Mae ( SLM).

He was bearish on MTS Systems ( MTSC), International Game Technology ( IGT) and Regions Financial ( RF).

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

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

For more of Cramer's insights during the Lightning Round, click here .

At the time of publication, Cramer was long Honeywell, Home Depot.

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.

More from Jim Cramer

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home