Cramer's 'Mad Money' Recap: Market Conundrum (Final)

Search Jim Cramer's Mad Money trading recommendations using our exclusive Mad Money Stock Screener and watch Jim Cramer's Mad Money Post Game video exclusively on

NEW YORK ( TheStreet) -- "Two down days does not signal the all clear," Jim Cramer explained to his "Mad Money" TV show viewers on Wednesday.

The said the patterns of old no longer work in this market, which means investors need to remain on the defensive.

Cramer said in the old days, two big down days in a row, like we saw on Monday and Tuesday, would be the crescendo moment for the markets and would almost certainly usher in a multi-day rally. But that was back when U.S. markets were in control of their own destinies, said Cramer, and those beliefs are now too risky to rely on.

In recent years, the markets have seen seven back-to-back selloffs, with two coming so far this year. The Oct. 3 sell-off was indeed the spark that ignited a terrific October rally, but the prior one on Sept. 22 only yielded a bounce for several days before the markets quickly retreated, noted Cramer.

That's why while he likes the tech stocks and the rally in truck production and many of the retailers and restaurants, Cramer remains hesitant to signal the "all-clear."

Why is this the case? Cramer said it's because this week's sell-off really didn't create a lot of bargains in high quality stocks, and while some things are better in Europe, others seem to be getting worse. He said the U.S. employment numbers due later this week could be a disappointment and the risk of another false positive remains too great.

Cramer said the markets remain a 50/50 coin toss at the moment, which is why he was not telling viewers to buy into today's rally, even though he knew it was coming.

Encouraging Outlook

In the "Executive Decision" segment, Cramer spoke with Chuck Bunch, CEO of PPG ( PPG), which delivered a four-cent-a-share earnings beat when it last reported and a stock that's up 91% since Cramer first got behind the company in June 2009. PPG currently has a 2.6% dividend yield but is up just 4% since August, despite two great quarters.

Bunch said that PPG is having an excellent year, based mainly on its operating excellence He said after the recession, PPG is a leaner company with a much more productive supply chain.

Overall, Bunch said he sees reasons for optimism both domestically and abroad. In the U.S., Bunch said manufacturers are seeing better energy prices, thanks to domestic natural gas and the country's supply chains. Bunch said that U.S. manufacturing is on a "good footing," and 2012 looks even better for PPG as commodity prices continue to fall.

Turning towards Europe, Bunch said that while consumer demand is weak, industrial demand is still seeing some growth. Bunch said he remains optimistic on the outlook for Europe as well.

In fact, PPG is so optimistic, it continues to buy back its own shares, with the company already retiring some 7% of its outstanding shares. "We're voting with our cash," said Bunch.

Cramer continued his recommendation for PPG, a great American manufacturing company.

Favorite Gold Miner Play

In the "Executive Decision" segment, Cramer spoke with Mark Bristow, CEO of Randgold Resources ( GOLD), a gold mining stock that's up 3,004% over the past decade and 42% since Cramer last spoke with Bristow on May 9.

Cramer said he still prefers that investors buy gold bullion or the SPDR Gold Shares ( GLD), but with Randgold looking to boost production 22% next year, this high-risk stock might be worth a look.

Bristow said that Randgold is working hard to increase both its production and the grade of the gold it mines. He said the company is bringing some one of its new mines online. He said there will be more of both in 2012.

Bristow cautioned investors not to evaluate gold miners of their production costs per ounce of gold. He said that gold quality differs, so using a cost per unit produced is a better metric. Bristow said that many gold miners are simply focused on producing more ounces and are not looking for quality or profitability, something Randgold does not do as it tries to separate itself from the industry.

Bristow was also very bullish on the prospect of a fixed, stable dividend at Randgold. He said the company has paid special dividends in the past and would be very open to a regular dividend once the company is done growing and has reached stable levels. Randgold is focusing on profitability no matter what the price of gold may be as the world's economies fluctuates.

Cramer cautioned that gold miners are risky investments, but this one remains his favorite in the group.

Eagleford Bonanza

For his second "Executive Decision" segment, Cramer spoke with Mark Papa, CEO of EOG Resources ( EOG), an oil driller that reported a seven-cent-a share earnings beat on a 82% year-over-year rise in revenue. EOG enjoyed a 100% success rate in drilling new wells this quarter.

Papa said that given recent takeovers in the industry, it's clear that the Eagleford shale region of the U.S. has the highest rate of return of any oil asset in America. He said using current metrics, EOG should be valued far higher than the market currently does.

Papa went on further to explain the importance of the Eagleford region. He said that a good well in any other part of the country starts off producing 1,000 barrels of oil a day. In Eagleford however, wells have been producing upwards of 3,000 barrels a day. Additionally, Papa said that the region can support more wells, closer together than previously thought, making the recoverable oil in the region also higher than forecast.

When asked why EOG appeared to be scaling back in North Dakota's Bakken shale region, Papa said that the Bakken remains important, but the company needed to move some rigs to areas where its leases require it to drill. He said that in the Bakken, EOG has earned many of its leases already, so there is less pressure to drill immediately.

Finally, when asked about environmental concerns over the new oil boom in America, Papa reminded viewers that wells have been fractured since 1947 in the U.S. and there hasn't been a single case of tainted drinking water. He said our country simply needs more education on how his industry is taking advantage of the precious gift that has been given to our country.

Cramer commended Papa and EOG for a stellar quarter.

Lightning Round

Cramer was bullish on Darden Restaurants ( DRI) and Alpha Natural Resources ( ANR).

He was bearish on Tata Motors ( TTM).

Closing Comments

In his "No Huddle Offense" segment, Cramer did an abrupt about-face on Diamond Food ( DMND), a stock he had been recommending on the heels of its announced acquisition of the Pringles potato chip brand. Earlier today, news surfaced that accounting issues may delay the acquisition under the first half of 2012, sending shares down $11.

Cramer reminded viewers that accounting issues always equals sell in his book. He said he knew absolutely nothing about what the problems are or how serious they could be. While it might seem like a good idea to buy blindly with shares having been pummeled so drastically, Cramer said that if the deal fails to close, the growth prospects for Diamond are gone, which makes that blind faith worthless.

"I cannot recommend Diamond until we know more," Cramer concluded.

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

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

Follow TheStreet on Twitter and become a fan on Facebook.

To submit a news tip, send an email to:

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was not long any stock mentioned.

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.

If you liked this article you might like

Gold Prices Might Still Crash Even With Fresh Stock Market Turbulence

Gold Prices Might Still Crash Even With Fresh Stock Market Turbulence

The Truth About Trade: Cramer's 'Mad Money' Recap (Friday 3/2/18)

The Truth About Trade: Cramer's 'Mad Money' Recap (Friday 3/2/18)

CVS Health, Coca-Cola, Norfolk Southern: 'Mad Money' Lightning Round

CVS Health, Coca-Cola, Norfolk Southern: 'Mad Money' Lightning Round

Victory Comes From Leadership: Cramer's 'Mad Money' Recap (Thursday 11/9/17)

Victory Comes From Leadership: Cramer's 'Mad Money' Recap (Thursday 11/9/17)

Here's What Stocks You Want to Own in the Event of a War With North Korea

Here's What Stocks You Want to Own in the Event of a War With North Korea