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NEW YORK ( TheStreet) -- "When it comes to stocks, management matters," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday, as he took some time out to give credit where credit was due.

He said investors should praise CEOs who have the ability to make bold moves and make the stocks they own even better.

Cramer said the markets are littered with great CEOs, like Chunk Bunch at PPG ( PPG), who took a company levered to autos and made it an emerging market player, or Sandy Cutler, who transformed Eaton ( RTN) into a leading energy conservation company. He said Dave Cote at Honeywell ( HON) should be praised, as should Michael Ward who heads up CSX ( CSX).

Far too often however, the markets do not recognize visionary CEOs, said Cramer. The markets doubted Cummins ( CMI), a stock which Cramer owns for his charitable trust, Action Alerts PLUS , when the company failed to raise guidance last quarter, but today the stock rose 7.6% to an all-time high as the company blew away the numbers.

The same patterned happened with 3M ( MMM). After lagging the markets last year, 3M is on track for 7% to 8% growth thanks to innovative new products. Then there's IBM ( IBM), ridiculed for selling its aging PC division, but now a stock worth more than the market caps of all the major PC makers combined. Things are going so well at IBM the company announced a 15% dividend boost today.

All of these stocks are why Cramer is a fan of Ford ( F) and Coca-Cola ( KO), another Action Alerts PLUS name. Cramer said Coke delivered a great quarter and reports to the contrary are just noise. Ford, he said, is also still a great buy under the leadership of CEO Alan Mullaly.

Cramer told investors to use the market's misdirection to take advantage of stocks like these with great CEOs.

Off the Charts

Cramer went head to head with colleague Dan Dicker over the chart of U.S. Oil Fund ( USO), an ETF Cramer coined "the ETF of mass destruction."

When comparing the U.S. Oil Fund to the price of West Texas Intermediate Crude (WTI), Dicker noted that while the price of oil is up 33% over the past year, the U.S. Oil Fund delivered a scant 10% gain, Cramer said.

Cramer explained that this ETF simply doesn't do what investors think it does. The fund invests in short-term futures contracts that must be rolled over month after month, significantly biting into profits.

But Cramer said the U.S. Oil Fund does even more damage, as its huge short-term interest in oil only serves to drive the price of oil itself even higher. He said this ETF should simply be banned and taken off the market.

According to Cramer, investors looking for a better investment should consider the Energy Select Sector SPDR ( XLE). This fund is up 33% over the past year, matching the price of oil. There's also the Oil Service HOLDRs ( OIH) ETF, which is up just over 20% on the year.

Beyond the ETFs, Cramer said he still likes individual oil stocks like Hess ( HES) and Weatherford ( WFT), two Action Alerts PLUS names, along with Conoco-Phillips ( COP), Continental Resources ( CLR) and Whiting Petroleum ( WLL).

Cramer said he's also still bullish on both Halliburton ( HAL) and Schlumberger ( SLB).

Calculating the Risk Reward

"Always know your risk reward," Cramer told viewers as he compared two stocks in the data center space, VMware ( VMW) and EMC ( EMC), an Action Alerts PLUS stock.

Cramer said while novice investors look at a stock and ask how much money they can make, professional investors ask how much money could they can lose. Cramer said investors always need to consider their downside, and determine how much pain they're willing to take.

In the data center space, VMware's virtualization software is a hot commodity. But the stock is also a volatile one, surging $12 a share on its recent earnings and falling $12 on unrelated news at a rival company. VMware is growing at 24% a year, but trades at 48 times earnings.

EMC, on the other hand, trades at just 15 times earnings and grows at 15% year, despite the fact the company owns 80% of VMware. "These are not similar stocks," said Cramer, who noted that shares of EMC, while still a solid grower, is not nearly as volatile. Since the 2008 market bottom, VMware is up a whopping 380% while EMC is up a more modest 185%.

Which is better? Cramer said that will depend on investors' tolerance for risk, which is why his charitable trust sold VMware in favor of EMC.

Coal in Demand

In the "Executive Decision" segment, Cramer once again spoke with Steve Leer, chairman and CEO of Arch Coal ( ACI), one of the U.S.'s largest coal producers.

Leer said that coal is helping to fill the world's growing energy needs. He said that all of the new coal plants currently under construction around the globe will consume an additional 750 million tons of coal per year, and counting all those plants being planned, the number rises to an additional 1.3 billion tons of coal per year.

Leer said the world needs all sources of energy to meet its needs, but with nuclear power coming under scrutiny again, coal remains a logical choice. He said even with a setback at one of its mines, Arch Coal was still able to meet its production quotas thanks to its well-balanced portfolio of other mines that were able to step in and supplement when needed.

When asked how his company stays independent amongst consolidation in his industry, Leer said that Arch is always looking for companies to buy, but it would be terribly expensive for others to buy Arch, which is why the company continues to focus on maximizing returns for shareholders.

Cramer continued his recommendation of Arch Coal.

Lightning Round

Cramer was bullish on Helen of Troy ( HELE), ( AMZN) and Exelixis ( EXEL).

He was bearish on Delcath Systems ( DCTH) and Barnes & Noble ( BKS).

Sticking With Netflix

In his "No Huddle Offense" segment, Cramer opined on Netflix ( NFLX) and the flurry of negativity surrounding the company's earnings.

Cramer said Netflix is loved by its subscribers and is taking the world by storm. He said the company is light years ahead of the competition and has a great track record of under promising and over delivering. Was the quarter perfect? No. But Cramer said he wished a tenth of the companies he follows had Netflix' earnings and vision.

Cramer said he still feels the company's market cap could increase by 50%. He said the stock always sells off on its earnings, but that makes the stock a terrific buy, even at steep multiples.

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

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At the time of publication, Cramer was long Cummins, Hess, Weatherford, EMC.

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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