NEW YORK ( TheStreet) -- "You can be spooked by inflation, or you can make money off of it," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday. He said that the sky is not falling because of rising commodity prices, and smart investors can profit from them. Cramer said the moves in commodities are of self-correcting and not signs of rampant inflation. He said when grain prices soar due to weather and drought, the following year farmers buy more equipment, plant more crops and produce as much as they can to take advantage of higher prices. When oil prices are high, oil companies explore more, drill more and build more infrastructure to do the same. Even in the supermarket, Cramer said consumers will trade down to private-label brands when prices get too high. In fact, Cramer said rising commodity costs are what investors should be hoping for, as they signal a strong and growing economy. Only wage inflation and housing inflation is really bad, he said, and fortunately we have neither. That means that now is the time to buy those who benefit from high commodity prices, companies like Nucor ( NUE), a stock which Cramer owns for his charitable trust,
Good to Be the LandlordIn the "Executive Decision" segment, Cramer sat down with Don Wood, CEO of Federal Realty Investment Trust ( FRT), a stock that's up nearly 52% since Cramer first got behind the company in May 2009. Federal Realty just delivered a two- cent-share earnings beat. Wood explained that while retailers come and go, it's always good to be the landlord. He said that Federal Realty doesn't focus on the monthly gyrations of retailers, and instead focuses on the longer term, and the longer term is solid. Wood said that Federal Realty will never be at 100% occupancy at its shopping centers, but as it eclipses 93% occupancy, it's getting pretty close to full capacity. When asked about the pending bankruptcy of retailers like Borders Group ( BGP), Wood said that there will always be sectors in decline, and Borders hasn't been a big draw for Federal's shopper centers for years. But he said they will welcome the opportunity to place up and coming tenants in those locations. Turning to ecommerce, Wood said that he doesn't consider online retailers like Amazon.com ( AMZN) the enemy. He said brick-and-mortar retailers will always be an important part of life, especially if you have the right locations. Finally, when asked about Federal Realty's 3.3% dividend yield and its 43- year track record of raising that dividend, Wood said its record is like gold at the company and it works hard to ensure it's always growing. Cramer continued his support for Federal Realty.
Transportation RallyCramer went head to head with colleague Dan Fitzpatrick over the charts of the transportation stocks, a group that's been lagging the broader markets. According to Fitzpatrick, while the overall S&P 500 average has been showing a solid bull pattern, the transports fell 4.3% in January as the unrest in Egypt reached its peak. After finding support at its 50-day moving average, the group then rallied back, making a new high today. Fitzpatrick noted that the next few days will be critical for the transports. If the rally holds, it will confirm the uptrend in the entire S&P 500, but if the group pulls back, making a double top pattern, then it could spell trouble. Fitz is betting on the former, saying the rally will likely continue. Turning to the fundamentals, Cramer said he agrees with Fitzpatrick, and feels the charts of the S&P 500 will lead the transports instead of follow them. He said the economy is strengthening and the railroads have been rallying. Even FedEx ( FDX), which disappointed Wall Street and lowered guidance, said business was strong and shortfalls were only due to rising fuel costs.