Cramer's 'Mad Money' Recap: Time to Change Your Mind (Correct)

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


(Corrects story originally published Oct. 16 to say that Domino's delivery orders are now placed digitally.)

NEW YORK ( TheStreet) -- What happens when positive facts get in the way of a negative story?

Huge stock market rallies like today's. That's why Jim Cramer told "Mad Money" viewers that when the facts change, investors need to change their minds.

There's no denying the U.S. economy hit the pause button back in August. But since then things have been on a roll, he said, as this week's positive retail sales and industrial production numbers proved.

So why are investors still obsessing over the negatives? It could be the uncertainty of November's presidential election or the looming economic "fiscal cliff," but more likely it's that investors have dug in their heels and are ignoring the facts.

The strong retail sales numbers shouldn't have been a surprise, said Cramer, as we've been hearing positive comments from everyone from Wal-Mart ( WMT) to Amazon.com ( AMZN), Home Depot ( HD) to PVH Corp ( PVH). Housewares have also been strong, noted Cramer, as TJX Stores ( TJX) and Williams-Sonoma ( WSM) told us.

The strength doesn't stop there. The U.S. is expected to build 14.8 million cars this year, up from lows of just nine million a few years ago. Construction and oil production are also on the mend, as are the record sales of the iPhone 5. Cramer said all investors need to do is look around to see the strength around them.

Cramer reminded viewers they're not investing in the unemployment data or other economic indicators, they're investing in the stocks of companies that are doing better than they were last year, those with good yields and lots of growth opportunities.

Yield Matters

Nothing is more important than yield, Cramer reminded viewers. He said that while investors often want capital appreciation from their investment, often what they need is yield. That's why a caller's question on LinnCo ( LNCO) got Cramer's attention.

LinnCo is a newly minted stock that exists for just one purpose, to own shares of Linn Energy ( LINE), a master limited partnership that's returned 218% since Cramer first got behind the stock in May 2009.

So why own LinnCo rather than just owning Line Energy? Cramer said that MLPs like Linn Energy are taxed differently than other dividend-paying stocks, which makes them a nightmare for IRAs, 401(k)s and other tax-deferred accounts. He said that often, any extra gains from owning MLPs are squandered by extra taxes and the accountants needed to pay them.

Enter LinnCo, an entity that owns shares of the MLP for you, pays the extra taxes, then distributes the rest of the income to you, its shareholders, as a regular dividend payment. He said that LinnCo pays a bountiful 7.2% yield and eliminates all of the headaches of owning an MLP. What's not to love?

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Patrick Doyle, president and CEO of Domino's Pizza ( DPZ), the pizza giant that saw its shares pop 7.6% after the company reported an earnings beat of 2 cents a share on strong same-store sales.

Doyle touted his company's new deep-dish pizza as a big driver of future growth. Deep-dish pizza represents a $6 billion category, and that's not even including frozen pizza's, which is why Domino's deep dish, which has fresh-made dough, is so exciting, he said.

Other drivers for Domino's include the company's online and mobile efforts. Doyle said that a full 40% of all delivery orders are now placed digitally, saving the company time and minimizing order errors. He said digital is constantly growing and will remain a big part of the company's growth story.

Turning to U.S. sales, Doyle said things are less negative than a year ago and he continues to see positive trends. He also noted Domino's is beginning a store remodeling initiative to serve the one-third of customers who choose to pick-up their pizzas rather than have them delivered. "We need to give those customers a better experience," said Doyle.

In closing, Doyle said that Domino's continues to be committed to rewarding shareholders. He said his company has maintained a 30% total return over the past few years, including special dividends, and he expects that to continue. Cramer continued his support for Domino's.

Lightning Round

In the Lightning Round, Cramer was bullish on Align Technology ( ALGN) and Dynavax Technologies ( DVAX).

But he was bearish on Ford Motor ( F), Sirius XM Radio ( SIRI) and Dover Corp ( DOV).

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Carolyn Boroden over the chart of S&P 500 to see which way the markets are heading. Cramer said Boroden has been has been on fire recently when predicting the average and correctly identified both the April lows and the top in September.

According to Boroden, the S&P has held above its Sept. 4 lows, confirming its future direction is higher. She used the S&P's symmetry, which predicts that moves will be approximately the same size, as well as the lengths of each move, to determine when they're likely to occur.

Her prediction is that if the index continues to hold above its floor of support between 1419 and 1427 then another leg higher, possibly one that's 4.4% higher, is possible.

Cramer said he always tends to side with the "hot hand" that has been right in the past. He said the fundamentals support it, so he remains long on the markets.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer weighed in on the surprise resignation of Citigroup ( C) CEO Vikram Pandit. He said there really aren't two sides to this story, only one: Citi wanted Pandit out and he left in a hurry.

Cramer said he was hard on Pandit when he first took over at Citi and felt he wasn't moving fast enough to resurrect the bank. But over time Pandit's plan began to unfold and his strategy of focusing on emerging markets and international growth while quickly working to reverse bad loans became a good one.

That's why it was jarring to learn of Pandit's ouster just a day after the bank delivered a better-than-expected quarter. Cramer said Pandit was "constructively fired," in part to appease shareholders and in part to appease regulators, both of which were growing frustrated with Pandit's direction.

As Cramer always says, it's not about making friends, it's about making money, which is why the only thing that matters is that Citi's new CEO has been given a far better hand than the one Pandit received.

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

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
At the time of publication, Cramer's Action Alerts PLUS had a position in HD.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com 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 TheStreet.com, 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 TheStreet.com. 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 TheStreet.com, 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.