Cramer's 'Mad Money' Recap: Monster Rally Reality Check (Final)

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NEW YORK ( TheStreet) -- Get used to stocks trading on growth, Jim Cramer told his "Mad Money" TV show viewers Tuesday. Growth generates earnings and earnings makes stocks trade higher, said Cramer, it's just that simple.

Cramer discounted the plethora of bogus analysis done by market pundits to explain a rising market. He called the notions of "risk on, risk off" and "pin the tail on the Fed" utter nonsense that results from lazy analysts failing to do their homework.

Yes, Europe has been and will likely continue to be a factor for U.S. markets, said Cramer, but with strong fundamentals and a tailwind from the Chinese economy, the U.S. is strong enough to take on just about anything Europe can dish out. Add to that India, which surprised the world by cutting interest rates earlier today, and it's no wonder U.S. stocks were off to the races once again today.

Cramer said whether its retail, technology or aerospace, things are simply better in America and the markets are just reflecting that fact.

Executive Decision

In the "Executive Decision" segment, Cramer once again sat down with Charif Souki, chairman and CEO of Cheniere Energy ( LNG), who just today received government approval to begin construction of a natural gas export terminal in Louisiana. Shares on Cheniere are up 115% since Cramer first spoke with Souki in June 2010.

Souki said the next step for Cheinere, now that final approval has been given, will be to secure the $4 billion needed to build the facility and begin working on phase one of the project. That financing should be completed soon, said Souki, and Cheniere will be putting some 3,000 to 4,000 people to work shortly thereafter.

When asked about the market dynamics around the globe for natural gas, Souki explained that in many parts of the world, oil is being used for power generation. "That makes no sense," Souki explained, which is why the market potential for natural gas is so enormous. He said the original deal for Cheniere's facility was calculated with $4 natural gas, but today prices fell to $1.95, making the project even more of a windfall.

Souki had nothing but praise for U.S. regulators, telling Cramer that the administration needs to meet export targets and natural gas was an easy choice for them. He said that as long as you have patience, working with the government isn't all that bad.

Cramer continued his support for Cheniere.

In the second "Executive Decision" segment, Cramer went on-location with David Steiner, president and CEO of Waste Management ( WM), at one of the company's many natural gas filling stations. Waste Management is currently a leader in using natural gas for its trash trucks and almost 90% of its purchases this year will be natural gas vehicles.

When asked about his company's endorsement of natural gas, Steiner said that with the spread between diesel fuel and natural gas at historic highs, it's never made more sense economically to use the fuel. Additionally, natural gas is also cleaner and quieter than diesel and is, of course, a domestic resource.

Sitting outside of one of Waste Management's newest public natural gas fueling facilities, Steiner showed the price on the pump, which read just $1.99. He said the company will be building 50 additional stations this year that both Waste Management and the public can utilize. With trash trucks using on average 8,000 gallons of diesel a year, Steiner said the payback from natural gas is huge.

But Waste Management is about more than just natural gas trucks, Steiner noted. The company also has a waste-to-energy business as well as 270 landfills, 120 of which mine methane that gets converted into natural gas. Near San Francisco, trash trucks pickup garbage that gets converted into natural gas and put right back into the trucks, Steiner touted.

Turning to the country at large, Steiner said it makes sense for the U.S. to use its abundant gas resources to replace coal-fired power plants and diesel fuel in trucks, as well as for chemical companies and others to use the fuel here in the U.S. instead of outsourcing their manufacturing.

Cramer reiterated his recommendation of Waste Management.

Off the Charts

In the "Off the Charts" segment, Cramer went head to head with colleague Mark Sebastian to determine whether the recent spate of market volatility is anything to worry about.

Using a chart of the CBOE Volatility Index ( VIX), commonly known by its symbol, VIX, Sebastian determined that this indicator moves in four- to five-year cycles with transition periods in between. In 1997, for example, the VIX was flat through July, then began to gyrate between July and September, before exploding as the tech bubble burst.

A similar pattern was seen both before and after the 2008 financial panic, noted Sebastian. After a long base, the VIX began to oscillate before exploding higher, only to oscillate again before returning to a rest period.

What of the 2011 volatility? Cramer illustrated the same pattern again, with calm leading to gyrations that culminated in August when the U.S. saw its debt downgraded. However, Sebastian noted that this period of volatility ended months ago and the market's current spike in volatility is not a sign of another rocky period.

Cramer said this is a sign that things are looking pretty good for the markets and investors shouldn't let the bears ruin their confidence. "We are not headed to another period of volatility," he concluded.

Warren Buffett

Cramer took a few moments to comment on the news that billionaire investor Warren Buffett has been diagnosed with prostate cancer. He said that while some investors worry about the fate of Berkshire Hathaway ( BRKB), he is not among them.

Cramer likened Buffett to Steve Jobs at Apple ( AAPL), a stock which he owns for his charitable trust Action Alerts PLUS , saying that Buffett has given much thought to his legacy and has three terrific candidates in the wings if, or when, the time arises. As for the company itself, after struggling with exposure to housing, Cramer said that Berkshire is now in terrific shape.

Cramer wished Buffett and his family all the best.

Lightning Round

In the Lightning Round, Cramer was bullish on Chipotle Mexican Grill ( CMG) and Chevron ( CVX).

Cramer was bearish on Dendreon ( DNDN).

--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's Action Alerts PLUS was long AAPL.

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