Cramer's 'Mad Money' Recap: Consensus Gets It Right (Final)

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NEW YORK ( TheStreet) -- "Sometimes it doesn't pay to be a contrarian," Jim Cramer cautioned his "Mad Money"TV show viewers Thursday.

He said while some have been saying to "buy the banks" since they're so hated and to "sell the techs" as their seasonal strength will never come, both trades have been dead wrong.

Cramer said the contrarian view on the banks has been that they're dirt cheap, trading below book value, and are so hated that they have to be a buy at these levels. Yet today, the bank stocks got crushed, even as JPMorgan Chase ( JPM), a best-of-breed bank, reported great numbers. Cramer said the banks stocks, including JPMorgan, have gotten too hard to figure out. Do they have European exposure? How much will new regulations cost them? Cramer said bottom line: Stay away from the banks.

Then there are the tech stocks, seasonally strong in the fourth quarter for nine of the past 10 years. The contrarian view was that things are just too bad around the world for that strength to materialize this year.

Yet since mid-September, right on schedule, the tech stocks of Nvidia ( NVDA), ARM Holdings ( ARMH), Avnet ( AVT), Red Hat ( RHT) and others have been soaring, outperforming every other sector.

Cramer said the strength in tech includes Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS, along with all of its component suppliers such as Skyworks Solutions ( SWKS) and TriQuint Semiconductor ( TQNT). And it also includes Google ( GOOG), which reported blow out earnings just today.

Cramer said in this game the goal is simple: Make money. He said it's not about standing out from the crowd or being different, it's about being right. "Just because some people think something will happen doesn't mean it will," said Cramer. Where did these contrarian views get you? Nowhere.

A Sell for a Long Time

In the Thursday "Sell Block" segment, Cramer revisited First Solar ( FSLR), a stock he called the best house in a horrible neighborhood.

Cramer placed First Solar in the sell block in September, 2010 at $138 a share. Since then, shares has skidded 60% and now trade at just six times earnings. Cramer told viewers not to be fooled by First Solar's valuation. He said the stock is still a sell, and will not be a viable investment as long as the solar industry continues to struggle.

Cramer said that solar companies rely on government subsidies in order to survive and in the current environment of government belt tightening and falling oil prices, the outlook is once again grim for solar.

First Solar has been immune to the problems that plagued Evergreen Solar and others that have filed for bankruptcy, thanks to its different technology with gave it stable pricing. But that will now change, said Cramer, as demand is shrinking and price wars will be coming. He said the estimates for First Solar are simply too high.

Compounding things further, First Solar derives 46% of its revenues from Germany and another 14% from France, two countries likely to dial back their solar endeavors. In the U.S., Cramer said First Solar won't be able to recognize revenue from its recent big projects until 2013, leaving earnings for 2012 willfully short of expectations. The company will also soon be facing increased competition from China, which is rapidly becoming a low-cost leader.

Cramer said the solar industry is a hideous place to be, and First Solar is and will remain a sell for a very long time.

Looking Ahead

In the "Executive Decision" segment, Cramer sat down with Don Knauss, chairman and CEO of Clorox ( CLX), a household name that sports a 3.6% dividend yield

Knauss said that Clorox will be turning 100 years old in 2013 and is in the middle of its "centennial strategy" of refocusing the company for its next 100 years. He said the company will be focusing on international growth, something that only accounted for 15% of sales a few years ago, but accounts for 21% of sales today.

He said nearly 60% of Clorox' international sales at the moment are in Latin America, with another 15% in the middle east. Going forward, Knauss noted that China will be a big market for the company.

Knauss also noted that innovation will be a focus going forward. He said the company's namesake, Clorox bleach, is still the best cleaning agent in the world and has save countless lives by helping to prevent infections. Other innovations include a new gel bleach product specifically for high-efficiency washing machines, where pouring liquid bleach has been causing splash problems for years.

Knauss also commented on the company's dividend, which is also a focus. He said that stock charts don't include dividend yields, nor reinvested dividend profits, but Clorox has been an excellent investment, even throughout the recession. He said the company will be returning to 3% to 5% top line growth and will be helped by increasing margins from falling commodity prices going forward.

Finally, when asked about competition from private label brands, Knauss said that in tough times, consumers go back to what they trust. In the case of Clorox and its family of products, Knauss said the key is to deliver great value, something the company has always done.

Cramer continued his recommendation of Clorox.

Speculative Health Care Play

In a second "Executive Decision" segment, Cramer spoke with Dr. Phillip Frost, chairman and CEO of OPKO Health ( OPK), a stock Cramer recommended as a trade, not an investment, in an earlier show.

Frost touted the company's recent acquisition as a possible "game changer" for the diagnostic testing business. He said the company's new testing platform uses a small credit card-sized test strip to test for up to 20 diseases in just 10 minutes. Frost said the analyzer is small and has no moving parts, meaning it could be deployed right at a doctor's office to get near instant blood test results.

OPKO is also working in collaboration with Bristol Myers-Squibb ( BMY) on a new test for Alzheimer's disease that tests positive five years before the onset of symptoms. Frost said treating Alzheimer's early is crucial for success, so this test will be vital in that market.

OPKO is also working on new treatments for asthma as well.

Cramer said that after talking with Frost, OPKO has a lot to like about it. He said the company is still speculative and investors should use caution and not pay up for the stock.

Lightning Round

Cramer was bullish on Juniper Networks ( JNPR), Apple ( AAPL), Randgold Resources ( GOLD), Goldcorp ( GG), CenturyLink ( CTL), Windstream ( WIN) and Netflix ( NFLX).

He was bearish on Resource Capital ( RSO), Human Genome Sciences ( HGSI)and Ivanhoe Mines ( IVN).

Closing Comments

In his "No Huddle Offense" segment, Cramer discussed why the Europeans haven't done a TARP-style program.

Cramer said people who are calling for a European TARP don't remember their history. He said back in 2008, no one was in favor of TARP: not the president, not Congress and certainly not the public. Most people, said Cramer, still don't even know what TARP was or what it did.

In reality though, TARP was a huge success, giving the banks time to breathe while real stress tests and solutions could be implemented. Since 2008, all of the TARP monies given to banks have been paid back, with interest, despite the fact that no one touts the program publicly.

Cramer said the Europeans will have similar problems with TARP and a program like it will take a long time to engineer. Until then, investors will likely keep on selling stocks until the markets get some clarity.

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

To contact the writer of this article, click here: Scott Rutt.

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At the time of publication, Cramer was long Apple.

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."

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