Cramer's 'Mad Money' Recap: The Bulls Go Marching (Final)

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NEW YORK ( TheStreet) -- "This rally is turning bears into house pets," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.

After a 103-point rally in the Dow Jones Industrial Average, Cramer said that the "parade of horribles" the bears have been counting on have simply evaporated, leaving corporate earnings to take center stage.

According to the bears, said Cramer, commercial real estate was on the brink of collapse. Instead, he said new firms are being created every day to buy distressed real estate and help the market recover.

The bears also predicted ever falling housing prices, but there too, they were wrong, he said, noting home builder KB Homes ( KBH) saying that home prices in California have finally stabilized.

The bears were also worried about a bubble in China, said Cramer, but it now looks like China's getting its second wind. He re-recommended Walter Energy ( WLT) as a play on China's need for coal to make more steel.

In technology, the bears predicted a seasonally weak first quarter, said Cramer, but there too, they were dead wrong. He recommended Oracle ( ORCL) ahead of its earnings and once again extolled the strength of Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS .

Other bear arguments centered on health care reforms and banking reforms. But Cramer said that with no new taxes hitting until 2011, health care is a non issue, for now, and banking reforms have also been watered down to where they're not a threat to earnings.

Cramer said the big news that matters is that Washington is taking a vacation from the front page of the media, which leaves earnings to step into the spotlight. And with so many bull markets occurring, from tech to aerospace, shoes to fertilizer, the bears will be forced to admit their wrong and buy in big soon enough.

Caveat Emptor

In the "Know Your IPO" segment, Cramer advised investors against investing in Calix Networks, a broadband equipment maker set to debut tomorrow, unless they can get in on the IPO deal itself.

0He said that the Calix deal is very tight, and shares will likely trade higher than the IPO price tomorrow, making them far less attractive to own if you're not in on the deal.

There is another IPO coming to market tomorrow, however, and Cramer said that deal is only getting a luke warm reception from Wall Street, which makes owning shares in the after market far more appealing.

That deal is First Interstate BancSystems, which will trade under the ticker FIBK. Cramer said this regional bank with 72 branches has a $16 book value, is very well run and has $5.8 billion in deposits with a loan portfolio of $4.8 billion.

Cramer said with banks still hated on Wall Street, the First Interstate IPO is a real opportunity. The company will have a 45-cent dividend when it opens, which gives it a 3% yield. He said this IPO should be owned if it opens lower tomorrow.

Google vs. Baidu

Cramer went head to head with colleague Dan Fitzpatrick over the chart of Google ( GOOG), and its Chinese rival Baidu ( BIDU), in the wake of Google's recent decision to close search operations in China.

Fitzpatrick was in love with Google's chart, which was trending solidly higher, until December when the Chinese scuffle first began. On Jan. 22, the stock gapped lower and has been struggling ever since. Fitzpatrick sees support for the stock at $500 a share, but said if it falls below that level, all bets are off.

The chart of competitor Baidu however, now looks as Google's did pre-December. Fitzpatrick noted that after a three-month consolidation period, shares of Baidu are on the move, and if the stock closes above $600, it's off to the races.

Turning to the fundamentals, Cramer said that he still likes Google's search and advertising businesses, noting that the current revenue lost from China is limited. However, Cramer said that the future damage to Google is far worse, as China could have represented between $5 billion to $6 billion in revenue by 2014. He said he'd still buy Google, but only on weakness.

Baidu however, is a different story. Cramer said Google's departure from China leaves the country wide open for Baidu and could boost earnings 35%. Even though the stock has already run on the news, Cramer said Baidu now owns all the future growth in China and he'd be a buyer.

Natural Gas Drilling Study

Cramer spoke with Rep. Maurice Hinchey (D., N.Y.), who recently introduced legislation to study the effects of hydraulic fracturing, a method of drilling for natural gas, on our nation's drinking water. Cramer said all opinions need to be aired when it comes to using natural gas a bridge fuel for the future.

Hinchey said that his bill is aimed at making sure that drilling for natural gas is not done in an irresponsible manner, in a way that would harm either air or water quality or personal safety of nearby residents. He said that his aim is not to delay the expansion for drilling in the U.S. but simply to study it and make sure it's being done wisely.

Hinchey refuted claims by the Sierra Club and others that hydraulic fracturing has never caused any damage to drinking water by saying that he has seen evidence that if drilling is not done properly, it can, and has, caused such damage.

Cramer said that if Hinchey's bill delays drilling in the U.S., that would be bad news for the naturla gas drillers, and he'll be watching this study closely.

Lightning Round

Cramer was bullish on BP ( BP), Burlington Northern Santa Fe ( BNI), CSX ( CSX), Potash ( POT), MarkWest Energy Partners ( MWE) and BP Prudhoe Bay Royalty Trust ( BPT).

He was bearish on Chevron ( CVX).

-- 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 Apple, BP.

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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