Cramer's 'Mad Money' Recap: Add Some Speculative Stocks to Your Portfolio (Final)

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NEW YORK ( TheStreet) -- "Speculation is not a vice, it's a virtue," Jim Cramer told the viewers of his "Mad Money" TV show as he celebrated the fifth-anniversary of his show in front of a live studio audience.

He said that a lot of fantastic stocks start out as speculations, if you know how to pick them.

Cramer said that a year ago, many people were scared of speculating on stocks like Ford ( F) at $4 a share, or Bank of America ( BAC), a stock, which he owns for his charitable trust, Action Alerts PLUS , at just over $3 a share, or even his speculative stock of the year, Sallie Mae ( SLM), at $6 a share. Yet a year later, all of these names have doubled, or better, he said.

"I like to own under $10 stocks," Cramer told viewers, because they don't hinge on the words of the Federal Reserve and are not held hostage by the Chinese economy nor on President Obama's agenda. Cramer said that some under $10 names are the result of classic mis-pricing of equities, and represent huge opportunities.

The case for under $10 stocks is made even stronger, said Cramer, because large money managers just won't touch them, fearing the risk and potential, albeit small, downside. "Stocks can truly be undervalued," he said, but this stigma goes away once the shares break through the $10 a share level.

Cramer said that while some speculative names, like the former shares of General Motors, and the current shares of Freddie Mac ( FRE) and Fannie Mae ( FNM), are indeed worthless. But others, like Citigroup ( C) at $4 a share, should not be passed up.

A Changing of the Guard

In a surprise appearance, NBC Nightly News anchor Brian Williams stopped by "Mad Money" to congratulate Cramer on five years of being the go-to guy for all things financial. Williams said that after this historic financial and economic meltdown, he expects the economy to remain in the news on his show for many years to come.

Williams also commented on the anger most Americans feel towards Wall Street and towards Congress. Citing a Recent NBC/Wall Street Journal poll, Williams said that 50% of Americans now want to see their current elected officials out of office, regardless of their performance or affiliation. Williams said that come November, he expects to see Congress full of rookies and first-term representatives as voters cast out the incumbents who represent the status quo.

When asked why the news seems to cling to every word President Obama has to say, Williams said that its hard to recall the Bush presidency anymore, and Obama will likely forever be linked to the financial health of the country.

A Watch List for Investors

Cramer reflected on what's changed most during his five-year tenure at "Mad Money." He said that there are five things that investors need to watch out for as they invest their money going forward.

Cramer said the first thing that's changed is the president. With the government owning everything from auto companies to banks, insurers to mortgage lenders, Cramer said what Obama says matters more than ever. He said the the next 1,000 points on the Dow Jones Industrial Average, for example, will likely hinge on whether healthcare reforms pass Congress.

Cramer said Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS , is the next trend investors need to watch. He said this company has its finger on the pulse of what he calls the mobile Internet tsunami, as mobile devices take over the planet. From iPhones to iPads, Cramer said Apple CEO Steve Jobs is the Henry Ford of the 21st century.

Next on Cramer's list was China. He said that five years ago, the Chinese economy didn't matter as much as it does today, but it'll matter even more in the future.

The fourth thing investors need to watch is energy. Over the last five years, America has become the largest producer of natural gas in the world, he said, and now the world is rushing in to develop our huge gas reserves.

And finally, Cramer said investors need to watch dividends. He said passive investing has failed, and investors need to consider the safety and protection dividend paying stocks offer. Cramer said he's increasingly reluctant to recommend stocks without dividends in this tough market.


Cramer took questions from the studio audience. When asked about what his worst mistakes on "Mad Money" were, Cramer said that Level3 Communications ( LVLT) was one name that did horribly, but NYSE Euronext ( NYX) was perhaps his worst call, as he rode the stock from $60 to $120 and back to $60 a share, before advising people to sell.

When asked whether Freeport McMoRan ( FCX) or Southern Copper ( SCCO) was a better stock, Cramer said Southern Copper had much better prospects.

Lightning Round

Cramer was bullish on ArcSight ( ARST) and Transocean ( RIG).

He was bearish on Vulcan Materials ( VMC), Vimpel Communications ( VIP) and Avon Products ( AVP).

-- Written by Scott Rutt in Washington D.C.

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

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 Bank of America, Apple.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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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