NEW YORK ( TheStreet) -- "Stop looking for bubbles where there aren't any bubbles," Jim Cramer told the viewers of his "Mad Money" TV show Thursday. He said that now's the time to tip-toe back into the markets, not run for the exits. Cramer said it's true that the markets have been up six weeks in a row, but that doesn't mean that investors need to worry about bubbles. He said the definition of a bubble is when investors pile into the markets with reckless abandon, but in truth, the very opposite have been happening for over a decade. The exodus began after the dot-com collapse in 2001, said Cramer, and continued after the 2008 financial collapse, the flash-crash of 2010 and again during the summer of 2011. Cramer said he hears the calls of a bubble in tech stocks, but with bellwethers like Intel ( INTC) and Microsoft ( MSFT) trading at just 10 times earnings, a fraction of what they were just a few years ago, how can that be a bubble? He said that even Apple ( AAPL), a stock which he owns for his charitable trust,
Two Faces of Facebook"There are two faces to the upcoming Facebook deal," Cramer told viewers. The first, he said, is the deal itself, while the second is the company's resulting valuation. Cramer explained that with 840 million active users of Facebook, there's no denying that retail demand for this IPO will be huge. However with so few shares available, just about all of those investors will be forced to buy in the aftermarket, he said, which will send shares markedly higher. "You won't have a chance to win unless you're in," said Cramer, referring to getting in on the initial IPO before it begins trading publicly. But what after it begins trading? Cramer said that's the valuation side of the Facebook deal. He said if shares double on the IPO, it's likely that the valuation would be too high and investors should sell no matter what. If shares rise only slightly however, it's possible that shares of Facebook would be worth holding onto. The valuation side of the equation remains to be seen, said Cramer. But for now what's important is getting in on the IPO, he said, as that side of the Facebook deal will be a winner no matter what the valuation ends up being.
Loyalty CountsIn the "Executive Decision" segment, Cramer once again welcomed with Jack Hartung, CFO of Chipotle Mexican Grill ( CMG), a stock that dipped 2% after it reported a two-cent-a-share earnings miss on a 23% rise in revenues. Shares of Chipotle are up 650% since Cramer first got behind the company six years ago. Hartung commented on the fact that Chipotle restaurants are now grossing $2 million per restaurant when they were only producing $1.4 million just a few years ago. He said that only a small fraction of that increase has come from price increases, while the majority of it is from existing customers becoming more loyal to the brand and new customers becoming loyal. He said that Chipotle aims to remain affordable so that more customers can discover what they're all about. When asked about rising food prices, beef in particular, Hartung noted that when it comes to the all-natural products that Chipotle buys, more demand is actually a good thing. He explained that as demand for all-natural products increases, so does the supply, which will ultimately lead to lower prices for everyone. "More demand is better for our business over time," Hartung said. Turning to the company's advertising efforts, Hartung said that Chipotle will never run advertising centered around gimmicks or limited-time offers. He said that the Chipotle experience is special and their advertising is about building a bond with customers and allowing them to discover what the brand is all about. Finally, when asked about expansion, especially with the company's Shophouse Asian Kitchen concept, Hartung said the company is excited about Shophouse but will continue to take it "one step at a time." He said the company is opening a second Shophouse location, but is still looking to refine the concept and is not quite ready to say that Shophouse will be the next Chipotle. Cramer told viewers that the dip in Chipotle's stock price is the perfect buying opportunity and they should stick with the company.