NEW YORK ( TheStreet) -- "No matter how hard I try, I can't say it's 2008," Jim Cramer admitted to his "Mad Money" TV show viewers on Tuesday. He said while pundit after pundit keeps comparing today's markets to that of 2008, the facts simply don't support it. Cramer said even on a roller-coaster day like today, when the markets roared up 360 points in just the last hour of trading, today's markets just don't look anything like 2008. He cited a laundry list of examples of things that happened in 2008, that aren't going to happen now. For example, in 2008, many large U.S. financial institutions got taken out, but today they're flush with cash. Wells Fargo ( WFC) and Morgan Stanley ( MS) traded to just $7 a share. Not likely to happen now, said Cramer. If it were 2008, the government had to bail out General Motors ( GM) again, along with AIG ( AIG), but these companies are also doing well. In 2008, there were massive order cancellations at the likes of Caterpillar ( CAT) and Cummins ( CMI), a stock which Cramer owns for his charitable trust,
Momentum Stocks Lose LusterIn the "Off The Charts" segment, Cramer went head to head with colleague John Roque over the charts of the high-quality growth stocks, the "pretty girl" stocks that the market has been in love with for years. Stocks like Baidu ( BIDU), Chipotle Mexican Grill ( CMG), Deckers Outdoor ( DECK), Lululemon Athletica ( LULU), Netflix ( NFLX) and Green Mountain Coffee Roasters ( GMCR) all made the list. According to Roque, an index of the pretty girl stocks shows a 650% return from 2008 through recently. However the index has formed the dreaded head-and-shoulders pattern as of late, a severely negative indicator. Roque also noted that using a chart of the pretty girls vs. the S&P 500, it's clear that these high-growth names had been outperforming the market handedly, until recently breaking down to underperforming levels. Roque expects a 15% decline in these names from Friday's levels. Cramer agreed with Roque's analysis that these momentum stocks are the last thing investors want in a turbulent market. He said stocks like Netflix, which is already down 60% from its highs, likely doesn't have much further to fall, but others in the group may still be in for a ride. Cramer once again recommended high-yielding dividend stocks, ones that offer protection in difficult markets. It's time for the pretty girls to head lower, said Cramer. "It's time to take profits and trim our positions," Cramer concluded.
Freeport 2011 vs. Freeport 2008Need still another reason why a 2008 scenario is impossible? Cramer said all you need to do is look at Freeport-McMoRan ( FCX), another Action Alerts PLUS name and one that Cramer recommends buying under $30 a share. Cramer said things are very different at Freeport now than they were in 2008, when shares traded in the single digits. He said that Freeport is not only a different company, it's a much better company. And since the world uses Freeport as a proxy for copper and the health of the global economy, Cramer compared the Freeport of today vs. the Freeport of 2008. In 2008, Freeport had just $872 million in cash with a whopping $7.5 billion in debt. Compare that to today, when the company sports $4.3 billion in cash and just $3.5 billion in debt. Cramer noted that operating cash flow was just $3.5 billion in 2008, but is $8 billion today. Also, the price of copper fell to just $1.25 a pound in 2008, but remains around $3 a pound today. Still not convinced? Cramer said that the Freeport of today is in far better shape to handle falling copper prices and with the Chinese likely to resume purchasing large amounts of copper soon, now would not be the time to sell. Cramer said this is one stock that has clearly overreacted to the downside, which is why he's a buyer.