Cramer's 'Mad Money' Recap: Soft Patch Alert (Final)

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NEW YORK ( TheStreet) -- Don't let the so-called "soft patch" in the economy rattle you, Jim Cramer told the viewers of his "Mad Money"TV show Thursday.

Cramer said he's seen dozens of events like these in his 30-year career and they always correct themselves.

Cramer said after the roaring start to 2011, it sure seems like the markets have put on the brakes, with unemployment still high, home foreclosures still high and the price of oil, along with just about everything else, also skyrocketing. Then there are worries about a slowdown in China and a stalled reconstruction in Japan, not to mention talk of higher taxes and looming debt ceiling in Washington, he added.

With all of those negatives, it's easy to see why stocks like Alcoa ( AA), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, along with JPMorgan Chase ( JPM) and Google ( GOOG) all sold off on even an inkling of negative news.

But Cramer said there's good news for all the doom and gloom, soft patches often take care of themselves. He said when commodity prices get too high, consumers and businesses cut back and prices begin to fall. China can't risk stalling out their economy, he said, and will soon begin growing again, as will Japan, which has to rebuild eventually.

Cramer reminded viewers that there is indeed always a bull market somewhere and right now that market is in high-growth names that are not impacted by the economy such as Chipotle Mexican Grill ( CMG), Deckers Outdoor ( DECK), VF Corp ( VFC) and Lululemon ( LULU). Cramer said there's also still a bull market in gold.

The key is to be nimble, said Cramer, and don't let the negative news rattle you. He said use the intraday rallies to raise cash and buy into the opportunities as they arise. "Put the market to work for you," he concluded.

Never Too Expensive

When is a turbo-charged growth stock too expensive? It's not when an analyst downgrades it, Cramer told investors. Consider generic drug maker Perrigo ( PRGO), which is up 90% since Cramer first got behind it on Feb. 9, 2010.

Cramer said last July, an analyst at Goldman Sachs ( GS) advised selling Perrigo after the company received a warning letter from the FDA. But that call proved dead wrong, as Perrigo fixed their issues and shares surged 58%.

So what should investors do after the same analyst finally capitulated today, upgrading Perrigo from a sell to a hold? Cramer said it's time to sell half your position and lock in profits. He explained that when all of the nay-sayers finally turn positive, there's less upside potential and investors must get more cautious.

Cramer identified a similar pattern in Chipotle Mexican Grill, a stock that's up 97% since Cramer began recommending it on June 4, 2010. Chipotle also received downgrades back then, also citing valuation, only to surge to new 52-week highs this week.

Cramer said investors should never sell a hot growth stock because it seems expensive. He said as long as the company keeps executing, its stock will continue heading higher.

Back From the Dead

The ratings agencies may be despised, but they're also buys, Cramer told viewers. He said Moody's ( MCO) and McGraw-Hill ( MHP), parent of the S&P ratings, are both back from the dead.

Cramer said it's hard to recommend the ratings agencies after those who were supposed to be investors' last line of defense chose to side with the bankers and slapped AAA ratings on just about everything that came through their doors. But the fact remains that this ratings industry came off with a slap on the wrist and the many attempts to sue for damages have all failed.

Cramer said the agencies acted like villains, rubber stamping what were supposed to be independent judgements on investments, but despite their failures, no new competition has arisen from the meltdown, leaving this happy duopoly intact.

Cramer said Moody's and S&P are stronger than ever, with Moody's trading at just 14 times earnings with a 12% growth rate and McGraw-Hill trading at 12 times earnings with an 11% growth rate. "It might just be time to hold your nose and consider buying them," Cramer concluded.

Growth in Texas

In the "Executive Decision" segment, Cramer spoke with Bruce Northcutt, president and CEO of Copano Energy ( CPNO), a natural gas pipeline operator with a juicy 6.5% dividend yield. Shares of Copano are up 50%, including dividends, since Cramer first recommended the stock on April 8, 2010.

Northcutt said the real story behind Copano is growth. He said the company is currently building $400 million worth of new projects, primarily in the Eagleford shale region of Texas, an area where wells can be drilled aggressively for decades.

Northcutt also explained that unlike a master limited partnership, Copano is organized as an LLC, and thus without a general partner, is able to pay out more of its earnings to shareholders.

When asked why the company didn't turn to a secondary offering of stock to fund its projects, Northcutt said that Copano chose to not stress its balance sheet by offering more equity and instead turned to private equity which has proven to be a great partner for the company

Finally, when asked why so many negative environmental stories are populating the media, Northcutt said that in the Northeast, the Marcellus shale region lies in the heart of coal country, and is likely getting push back from competing interests. In Texas, Northcutt said there have been little to no incidents affecting the environment or safety.

Cramer continued his recommendation of Copano.

Lightning Round

Cramer was bullish on Whole Foods ( WFMI), Kroger ( KR), Caterpillar ( CAT), Motricity ( MOTR), Linn Energy ( LINE) and Endeavour Silver ( EXK).

He was bearish on SuperValu ( SVU).

Closing Comments

In his "No Huddle Offense" segment, Cramer said it's time to go after the real bad guys and leave Goldman Sachs alone.

Cramer said Goldman is constantly under government scrutiny, yet the leaders of the real reckless firms, like Countrywide, AIG ( AIG), Merrill Lynch and Lehman Brothers all seem to have gotten off scott-free.

Cramer said the bad guys need to be put in jail for the havoc they caused, but Goldman should be commended for shedding bad mortgages and working hard to save itself.

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

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At the time of publication, Cramer was long Alcoa.

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."

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