Cramer's 'Mad Money' Recap: Survival Guide (Final)

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NEW YORK ( TheStreet) -- "The best thing you can say about this market is that we weren't down more," a solemn Jim Cramer told the viewers of his "Mad Money" TV show Monday, after a 635-point slide in the Dow Jones Industrial Average.

He said the downgrade of U.S. debt was like hitting the markets with a big stick, but the day's trading action was curious, to say the least.

Cramer concluded that today's market action was akin to a slow-motion flash crash, one where the machines, not men, were at the helm. How did he reach that conclusion? Cramer said it's because the market acknowledged no positives and instead took everything lower, which is not rational investing. "When everything gets crushed, that's machines, not man," he concluded.

Cramer noted that utilities should have been up today, with energy prices falling off a cliff, but they weren't. Consumer products companies, the safety stocks of the markets, should have been up today as well, but they weren't either. Gold stocks should've seen gains, he said, but there again was nothing but red ink.

Take the case of Johnson & Johnson ( JNJ). Cramer said this company was down 2.5% today, yet the company yields 3.7%, which is far better than the 2.25% from a 10-year Treasury bond.

Despite the company's recent slew of over-the-counter drug recalls, Cramer said he'd be a buyer of J&J once its yield hits 4%. The company trades at just 12 times earnings with a 5% growth rate.

Cramer also looked into Eaton ( ETN), a stock he's liked for a long time. He said that Eaton also has a big yield, but unlike J&J, Eaton's earnings fell off a cliff in the recession of 2009, something the stock is getting punished for now. Cramer said he'd wait for a 4%-to-5% yield in Eaton as a cushion to make up for the more unpredictable earnings.

"Things aren't as bad as 2008," Cramer reiterated to viewers, but that doesn't mean we can't immunize ourselves from risk by waiting for even lower prices, even in companies that are safer than U.S. government bonds.

Dividend Strength

In the "Executive Decision" segment, Cramer once again sat down with Herbjorn Hansson, chairman and CEO of Nordic American Tanker ( NAT), a company that now yields a hefty 7.2% dividend that some believe may now be in jeopardy with a slowing global economy.

Hansson said that reports citing that his company has cut its dividend are totally wrong, and Nordic American continues to pay its normal dividend, just as it has for the last 56 quarters. He said his company has a strong balance sheet and the recent reports have totally misguided the markets in the wrong direction.

Hansson did admit however that Nordic American did take on additional debt in part to pay its dividend. He said that while debt is bad, the company is still in a strong position and is committed to rewarding its shareholders, even in the bad times.

When asked about the tanker market in general, Hansson said that business continues to troll along the bottom, but he expects rivals to go out of business soon, allowing Nordic American to buy some additional ships on the cheap. He said "we're nice people, but still tough businessmen."

Finally when asked about the prospects for a turnaround, Hansson noted that things could turn around quickly for the tanker business. He said that if China, for example, were to import just one million more barrels of oil a day, that alone would translate into a 10% increase in the demand for ships.

Cramer said he continues to have confidence in Nordic American Tanker and the company remains the only tanker company he recommends.

Playing Catch Up

In a second "Executive Decision" segment, Cramer also spoke with Chuck Jeannes, CEO of Goldcorp ( GG), on a day where gold reached another all-time high, but shares of Goldcorp floundered after the company reported a one-cent-a-share earnings miss on light revenue.

Jeannes said that Goldcorp's problems with the quarter, which included fires, floods, but fortunately not locusts, were all short-term in nature. He said all of the issues were behind the company, or soon will be, and he remains confident in the long-term profile of the company.

Jeannes said he remains frustrated at the short-term focus of the markets, which demands results immediately, and has no regard for the long-term prospects of Goldcorp or gold miners in general.

Regarding issues at the company's prominent mine in Mexico, Jeannes explained that the rock being extracted didn't break as expected and was causing issues at the mill. That, however, says nothing of the quality, recovery or production of the ore at that mine, which continues to exceed expectations.

Jeannes noted that a fix for the mill has already been developed and will be in place before the end of the year. He also noted that the mine is only in its third quarter of what is expected to be a 90 quarter lifespan.

Finally, when asked about the company's dividend, Jeannes said Goldcorp continues to generate excess cash flow and will continue to expand its operations and exploration as well as continuing to increase its dividend as is possible.

Cramer said Goldcorp remains his favorite gold mining stock and the company should play catch-up to its peers soon.

Solid Long-Term Fundamentals

In a third "Executive Decision" segment, Cramer spoke with Mark Papa, chairman and CEO of EOG Resources ( EOG), an oil shale driller that delivered a monster 32-cent-a-share earnings beat on an 89% growth in production year over year.

Papa said he doesn't monitor the oil futures prices. He said he monitors his oil wells. He said that daily pricing gives him whiplash, which is why EOG is in the business for the long term, where the fundamentals are still excellent.

Papa also noted that he feels the price of oil should be between $90 to $100 a barrel and the dip to $80 a barrel is an overreaction. He said that there's no evidence of demand erosion from the U.S. or Europe and he continues to be bullish on oil.

Turning to the company's Eagleford shale assets, Papa confirmed that EOG has had a 100% success rate in the wells its drilled there, and each of those is producing 700 to 1,500 barrels of oil a day. He said outside of Saudi Arabia, results like that are unheard of. While EOG paid as little as $450 an acre for its Eagleford assets, Papa estimated the land may now be worth as much as $35,000 an acres.

Papa was also bullish on EOG's ability to deliver its oil to Louisiana terminals via rail in 2012. He said EOG could see a $20 increase in the price it can fetch for its oil by leaving the glut of oil in Texas and getting its oil to the more lucrative markets in Louisiana.

Cramer said EOG remains a fabulous story and he continues to be a buyer.

Lightning Round

Cramer was bullish on Pfizer ( PFE)and CNH Global ( CNH).

He was bearish on Bank of America ( BAC), Corning ( GLW)and Humana ( HUM).

Need to Think Big

In his "No Huddle Offense" segment, Cramer asked the question: "So we be furious at Standard & Poors for downgrading our debt?" In a word, no.

Cramer said S&P made it clear that it wanted to see $4 trillion in savings or revenues and it did exactly what it said it would do. "What's wrong with that?" he asked. S&P would have to be deaf, dumb and blind to ignore the gridlock that was so apparent in Washington, he added.

Cramer said rather than shooting the messenger, now is the time for the U.S. treasury to take advantage of low interest rates and issue $250 billion in 30-year bonds to eliminate any future liquidity problems for our nation. He said it's also time for the president to think bigger, and propose more than payroll tax credits.

Cramer said Obama needs to be a leader and embrace the spirit of the downgrade to force the hands of Congress. He should announce that everything is back on the table and announce that the government is going right back to work to fix the problem and not wait for a September committee to convene. "That," he said," would be real leadership.

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

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At the time of publication, Cramer was not long any equities mentioned.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com 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 TheStreet.com, 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 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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