Cramer's 'Mad Money' Recap: Play Wacky Data With Diversification (Final)

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NEW YORK ( TheStreet) -- What's up with this yoyo market? Why are things so confusing? Why are we stuck at this level? These are just a few of the questions Jim Cramer answered for the viewers of his "Mad Money" TV show Wednesday. He said with all of the conflicting market data out there, it's not hard to see why you can make a case for both the bulls and the the bears.

Case in point, Cramer's gameplan from last Friday, during which he said for a good read on the consumer, investors need to watch Nike ( NKE) and Darden Restaurants ( DRI). But while Nike reported a great number, with future orders on the rise, Darden reported an in-line number, with less-than-stellar guidance.

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Cramer said this confusing pattern is playing out all over the markets. Housing inventory, for example, is down, and that's a good thing. But everyone is focused on foreclosures and the expiring new-home buyer tax credit, and that's a bad thing. Likewise with retail, said Cramer, some are booming, some aren't. Obama's health care reforms... in limbo. IPOs and mergers and acquisitions are heating up, but the rest of the market is stagnating. Asia's economy is recovering, the U.S. economy is still floundering.

How should investors play this confusing period? Cramer said with diversification. For his charitable trust, Action Alerts PLUS, Cramer said he bought both Home Deport ( HD) and Altria ( MO) to play both sides of the bull/bear debate.

Cramer said the only true thing in the markets right now are that many money managers are still behind the curve, and that means they're likely to buy what's been working, stocks like Apple ( AAPL) in the tech sector, along with the rest of the stocks in his mobile Internet index.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Hossein Fateh, president and CEO of DuPont Fabros Technology ( DFT), a real estate investment trust focusing on large-scale computer data centers.

Cramer previously took issue with Fabros due to the company suspending its dividend during the heart of the credit crunch. However, Fateh explained that the company could have issued new equity at any time and continued its dividend, but instead chose not to dilute its shares. He said that after the company leases more of its remaining space, it will take on more debt and revisit its dividend.

Fateh explained that the company's cautious measures stemmed from the credit market drying up and not from a drop off in its business. He said the company was prudent to halt construction on its new data centers amidst the credit crisis.

Turning to the business side of the company, Fateh explained that his company deals only with mission-critical applications, which means that every one of the company's customers stays with them and pays on time. "We don't lose leases," he said.

Cramer said he felt better having heard the reasoning behind the dividend cut, but added that he wanted to see one more quarter of results before making a recommendation.

Check Out Nvidia

Investors looking to profit from the growing trend of netbook computing need to check out Nvidia ( NVDA), said Cramer. He said these ultra small, ultra cheap computers represent a huge secular growth trend for the company.

Cramer said his thesis was confirmed on the Best Buy ( BBY) conference call, when management said that netbooks represent a completely new category of devices that is not cannibalizing sales of normal laptops or smart phones.

Cramer said normally there would be no clear winner in the war between Nvidia and rival AMD ( AMD), which have a happy duopoly on the graphics chip market. But with Nvidia's new "Ion" series of graphics cards specifically for netbooks, Nvidia is now in the driver's seat.

According to Cramer, there are other reasons to love Nvidia as well, such as its record-low inventory levels and 60% to 70% gross margins on the products it sells. He said the company's "Tegra" line of chips for smart phones and other small devices is proving to be a second hot market for the company's chips as well.

With so much going for it, Cramer said now's the time to give Nvidia a second look.

Am I Diversified

Cramer played "Am I Diversified" with callers to see if their portfolios have what it takes. The first caller's portfolio included Bank Of America ( BAC), Marathon Oil ( MRO), Parexel ( PRXL), Skyworks Solutions ( SWKS) and Spirit Aerospace ( SPR).

Cramer said this portfolio had perfect diversification.

The second caller's top holdings included Pfizer ( PFE), UPS ( UPS), Google ( GOOG), Pepsico ( PEP) and Altera ( ALTR).

Cramer said this portfolio had a pair of tech companies. He recommended selling Altera in favor of a defense contractor like Raytheon ( RTN).

To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC .

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At the time of publication, Cramer was long HD, MO and BAC.

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."

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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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