Cramer's 'Mad Money' Recap: Preparing for the Hard Patch (Final)

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NEW YORK ( TheStreet) -- "Our soft patch is morphing into a hard patch," Jim Cramer warned the viewers of his "Mad Money"TV show Thursday.

He said not only is the wrangling in Washington taking its toll, but interest-rate tightening at central banks in emerging markets is now cooling the only safe haven we've had for months.

Cramer said investors can no longer hide in stocks with big international exposure, as the rest of he world is following the U.S. lead into the morass. Instead, he said, investors need to look for stocks that are part of larger, long-term secular trends.

Trends like the need for more fuel efficient airplanes. Cramer said the bull market in aerospace rages on, and that's great news for Boeing ( BA) and Precision Castparts ( PCP).

Other secular trends include the need to find more oil and gas. Cramer said that will protect stocks like Baker Hughes ( BHI), Schlumberger ( SLB) and Weatherford ( WFT).

There is also a bull market in trucks, said Cramer, which plays right into the hands of Cummins ( CMI), a stock which he owns for his charitable trust, Action Alerts PLUS. Plastics is another bull market, which will boost the shares of Dow Chemical ( DOW) and PPG ( PPG), he said.

Finally, there are bull markets in high-end retail, think Tiffany ( TIF) and Coach ( COH), agriculture, Potash ( POT) and John Deere ( DE) and anything in technology that has to do with the cloud, social media or mobile, ala ( AMZN) and Apple ( AAPL), another Action Alerts PLUS stock.

Cramer said he'd put on a quarter of a position starting tomorrow, then buy in stages as the markets fall.

Managing Costs

In the "Executive Decision" segment, Cramer spoke with John Faraci, chairman and CEO of International Paper ( IP), which just delivered a 13-cent-a-share earnings beat on rising revenues. The stock is up 41% since Cramer first noted it in September, 2009.

Faraci said that International Paper's success comes from managing their costs, running things right and using their cash to build a better platform in the future. He said for the company's paper and packaging business, which has been in decline, the key has been to manage that business for what it is today and not what it was in the past.

Another bright spot for IP has been the company's joint venture in Russia. Faraci said they have good assets in the right locations in Russia and are able to supply China with all the pulp they need.

Looking domestically, Faraci commented on their proposed takeover of Temple-Inland ( TIN). He said that it did make an unsolicited bid, but he's hopeful that it will be a friendly transaction. He said IP is offering a 20% premium to Temple's all-time high, but the company will be patient and disciplined to ensure that International Paper's dividend remains secure.

When asked about the wrangling in Washington, Faraci said America should never default on their obligations, but that doesn't mean it can continue to keep borrowing 40 cents of every dollar they spend. He said a deal will likely come in the 11th hour, but America needs a plan for sustainable growth along with entitlement and tax code reforms.

Cramer said International Paper remains on his buy list, especially with its 3.2% dividend yield.

Sticking With Growth Stocks

"This market doesn't want cheap or value stocks, it just wants growth stocks," exclaimed Cramer. No matter what the sector, the debate of growth vs. no growth rages on, he said.

That's why stocks like Green Mountain Coffee Roaster ( GMCR) gained 16% today and why Chipotle Mexican Grill ( CMG) and Starbucks ( SBUX) continue to deliver. Meanwhile, other restaurants like P.F. Changs ( PFCB) flounder.

Cramer said Apple and Amazon have it, but others like Intel ( INTC) and Hewlett-Packard ( HPQ), are now nothing but dead money.

In biotech, Celgene ( CELG) has growth, while Bristol-Myers Squibb ( BMY) lacks. In supermarkets, Whole Foods Markets ( WFM) has it, while all of its rivals don't.

Whether it's a stock like Sodastream ( SODA), up almost 9% today, or a lumbering giant like Exxon-Mobil ( XOM), Cramer said it's clear that the markets are thirsting for growth, and putting everything else out to pasture.

Cramer said it's time to sell the slow stocks and buy into anything that's a fast grower.

Mad Mail

Cramer told a viewer that he would sell Marathon Petroleum ( MPC), the refining spinoff of Marathon Oil ( MRO), and would roll the money back into Marathon Oil, which has the growth the markets are craving

He told another viewer that Ziopharm Oncology ( ZIOP) has no products, no profits and no catalyst. "Forget it." Cramer had better things to say about Verizon ( VZ), which he still has faith in.

When asked about Limelight Networks ( LLNW), Cramer said the quarter is likely to be bad, but the stock is too cheap to sell.

Finally, Cramre said he didn't like the quarter from Ingersoll-Rand ( IR) and prefers Honeywell ( HON).

Lightning Round

Cramer was bullish on Cummins ( CMI), Aetna ( AET), VF Corp ( VFC), Ensco International ( ESV), Telecom Argentina SA ( TEO)and ( BIDU).

He was bearish on Paccar ( PCAR), Amerigroup ( AGP), Oxford Industries ( OXM), Transocean ( RIG), JC Penney ( JCP), Waste Management ( WM)and Ariba ( ARBA).

Buyer Beware

In his "No Huddle Offense" segment, Cramer said he's got a real problem with the growing IPO mania that's infecting the markets. He said IPOs like Dunkin' Brands ( DNKN) and today's Teavana ( TEA) may be seen as successes by the investment banks that brought them public, but they're foolish investments in the aftermarket.

Cramer said these deals are engineered for huge first-day spikes, but that leaves them vulnerable afterwards. Dunkin' Brands is now values more than Starbucks, he said, and Teavana only offered 18% of it's total shares in this IPO.

Cramer said when these companies realize they need more money than the IPO delivered, the subsequent secondary offerings will overwhelm the existing shares, sending prices sharply lower and make a fool of anyone who owns

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

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At the time of publication, Cramer was long Cummins, Apple.

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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