Cramer's 'Mad Money' Recap: Mea Culpa on Selloff Call on Health Care Vote (Final)

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NEW YORK ( TheStreet) -- "I screwed up," Jim Cramer confessed on his "Mad Money" TV show Wednesday, as he admitted that he was way too bearish on what the health care reform vote would do to the stock market.

Cramer said the markets were down for only 20 minutes at Monday's opening after he had predicted a sizable selloff last week.

What went wrong? Cramer outlined 10 reasons, or misjudgments, he made about Obama's health care reforms.

1. Cramer thought the health care reforms would negatively impact earnings. Instead he said those impacts were pushed far into the future.

2. Cramer thought too many money managers were counting on the bill not passing, and thus would be caught off guard. But in the days leading up to the vote, everyone got wise to what was coming.

3. Cramer thought the market would sell off ahead of new, higher tax rates on dividends and capital gains. In actuality, those measures aren't coming until 2011, or later.

4. Cramer thought that an Obama win would reignite his pro-labor agenda. But instead, it appears Obama spent all of his political capital on health care, he said.

5. Cramer thought the budget deficit would rise causing a selloff, but it apparently hasn't reached that point.

6. Cramer said the selloff would have be buying opportunity, but the markets were just too strong.

7. Cramer said he felt new from Washington would trump everything. In reality, the market now seems used to the endless barrage of news.

8. Cramer said he didn't want to be greedy, and felt the market was due for a pause, but that pause only lasted for 20 minutes.

9. Cramer said he thought the health care bill would be worse for small business, causing a spike in unemployment. He said it turns out the 50-employee cutoff is high enough to not cause a wave of firings.

10. Cramer said he let the news and media hype interfere with what was most important, analyzing the fundamentals of the companies he follows.

For all of these reasons, Cramer said he let down his viewers, and vowed not to be swayed by the negativity in the future.

Return of Radio

"News flash: Radio is not dead... and it might be better than ever," Cramer said. Thanks to a recent Supreme Court case allowing unlimited political advertising by corporations, this year's election season may be the best period in radio's history, he added.

Making matters even better, Cramer said most radio stocks have either been acquired, or gone belly up, leaving only Entercom ( ETM), as the largest publicly traded radio company and indeed, the last man standing.

Entercom operates in 23 markets across the country, making it the perfect choice for corporations to express their political views this November. The company derives 78% of its revenue from local radio and has enjoyed a 50% spike in its digital advertising revenue.

Business is clearly coming back, said Cramer, thanks to a recovering economy and rising ad rates. This bodes well for Entercom, which has reduced its debt by $100 million and trimmed its operating expenses by a hefty 8%.

Cramer said Entercom has clearly already had a massive run, up 855% from its low of just $1.17 a share. But even at current levels, Cramer noted that Entercom trades at just 8.6 times its 2011 earnings, despite its 8.6% long-term growth rate and monster cash flow.

Cramer said Entercom is the only way to play the coming boom in radio, but with no short term catalysts propelling the stock higher, he advised waiting for a pullback before buying in.

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), Fluor ( FLR), Johnson Controls ( JCI), Skyworks Solutions ( SWKS) and Time Warner ( TWX).

Cramer said this portfolio was well played.

The second caller's top holdings included Exxon-Mobil ( XOM), Consolidated Edison ( ED), Apple ( AAPL), AT&T ( T) and Verizon ( VZ).

Cramer said he'd sell AT&T and pick up a health care company to fix this portfolio.

The third caller had Prudential ( PRU), Cooper Industries ( CBE), Mosaic ( MOS), DirecTV ( DTV) and Warner Chilcott ( WCRX) as their top five stocks.

Cramer said this portfolio was also well played.

Mad Mail

Cramer followed up on three hot IPOs he recently recommended. He said that he'd ring the register on MaxLinear ( MXL), which is up 28%. He'd still be buyer of Calix ( CALX), but only on a pull back, and would be a buyer of First Interstate Bancshares ( FIBK) at its current levels.

Cramer told a viewer that blackout periods for management, like the one seen on the Hyatt Hotels ( H) IPO is normal, and a good and right policy for companies to have.

Cramer told two final viewers that STEC ( STEC) is a poorly run company and he would not own it, but would own Weatherford ( WFT), a stock which he owns for his charitable trust, Action Alerts PLUS , and one which he regarded as the cheapest oil services play out there.

Lightning Round

Cramer was bullish on Millicom International Cellular ( MICC), America Movil ( AMX), Saks ( SKS), Sensata Technologies ( ST), Zimmer Holdings ( ZMH), St Jude Medical ( STJ), Abbott Laboratories ( ABT), Philip Morris International ( PM), BGC Partners ( BGCP), Cleveland-Cliffs ( CLF) and Nucor ( NUE).

He was bearish on United States Steel ( X).

-- 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, Johnson Controls, Fluor, Apple, Abbott Labs, Weatherford.

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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