NEW YORK ( TheStreet) -- "The bad news doesn't matter, it's how we react to in that matters," Jim Cramer told his "Mad Money" TV show viewers Thursday. Cramer said that in 2011 all bad news was punished, but in 2012, all is forgiven. And that simple change, he said, makes all the difference. Cramer said the reactions to news of individual stocks is what defines a market. He said it would seem obvious that if a company reports good news, its shares should go higher, but in 2011 that was simply not the case. Back then, good news didn't matter and stocks sank lower no matter how good the news. In today's market however, all of that has changed. Cramer cited Gap Stores ( GPS), which reported a big turn in same-tore sales. THat news sent the stock up big, even though it had already run up in anticipation of the release. Even a company like Liz Claiborne ( LIZ), which reported a miss on both earnings and revenues, still saw its shares rise. The trend doesn't stop at retail, noted Cramer. He said that Finisar ( FNSR) rebounded after offering investors a bleak outlook to finish in the bull camp by the end of the day. Investors used the momentary weakness in Wynn Resorts ( WYNN) as a buying opportunity, sending those shares up 3% by the close. While some skeptics cite multiple expansion as evidence of a bubble in the markets, Cramer said that multiple expansion based on positive news and rising earnings is not a bubble, it's the fuel for a sustainable rally. He said times like these make investing actually enjoyable again, as investors can predict good news and be instantly rewarded for doing so.
Global Appetite for CoalIn the "Executive Decision" segment, Cramer once again welcomed Mike Sutherlin, president and CEO of mining equipment maker Joy Global ( JOY), a stock that's returned an impressive 400% gain since Cramer first recommended it in March 2009. Shares of Joy Global came under fire after analysts largely perceived the company's earnings as a disappointment. Sutherlin explained that Joy Global's legacy's businesses actually delivered fantastic results this quarter, with revenues up 20% on record operating margins. He said the company did have some issues surrounding its two recent acquisitions however, but he remains positive on both of them. "That's a near-term issue only," said Sutherlin. Turning to the larger issue of the U.S. abandoning coal-based power plants, Sutherlin admitted that there is indeed a structural shift away from coal towards cleaner, cheaper natural gas-fired plants. However he said that the transition is limited to the number of new gas-fired plants that can be built to replace the aging coal plant system. "That transition is a long-term trend," he concluded, one that will not affect Joy Global's mining equipment business anytime soon. In fact, with China and India currently constructing coal-fired power plants equivalent to one-third of the total U.S. generating capacity, Sutherlin said any decline in the U.S. coal market is more than made up for by those emerging markets. He said there just isn't enough generating capacity to meet demand in these countries and they're building as fast as they can to catch up. Cramer agreed, saying that Joy Global's earnings aren't about slowing U.S. demand for coal, but rather the insatiable appetite for coal in the rest of the world. He remained bullish on the stock.
Untouchable GroupIn the Thursday "Sell Block" segment, Cramer took the advice of fellow CNBC colleague Herb Greenberg and put the entire for-profit education sector into solitary confinement. He reminded viewers that just because a stock goes down, it doesn't necessarily mean its cheaper. Cramer explained that Greenberg raised concerns that the entire business model of for-profit colleges like Apollo Group ( APOL), Career Education ( CECO) and Strayer Education ( STRA) may indeed be broken, prompting a "major reset" of stock prices across the board. After doing additional research, Cramer said his conclusions confirmed Greenberg's fears. Cramer said the for-profit schools have three major headwinds going against them. First, the labor market is getting better, which means fewer recently-unemployed potential students for these schools to recruit. Second, the competitive landscape is getting a lot tougher, with more and more traditional non-profit schools ramping up their own online and off-campus degree programs. Finally, the regulatory environment surrounding for-profit schools is getting tougher, with new rules ramping up over the next four years. The for-profit schools are already no stranger to questions about their aggressive sale tactics and limited benefits. Cramer said with the economy and the competition now going against them, it seems unlikely that these schools will be able to match their past performance, even without regulators keeping a close eye on their method. "The risks far outweigh the potential rewards," Cramer concluded, which is why this entire group is untouchable until further notice.