Cramer's 'Mad Money' Recap: Lose the Gloom and Doom

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NEW YORK ( TheStreet) -- The Washington frightfest is almost over, according to Jim Cramer.

He told "Mad Money" viewers Wednesday it will be time soon to enjoy the fact that politics no longer matter to the markets.

The markets have overcome two of three big hurdles: the presidential election and the fiscal cliff. That leaves only the looming debt ceiling debate, and this last obstacle is actually the least worrisome, Cramer said.

The thing the markets feared most the last time the debt ceiling reared its ugly head was a U.S. debt downgrade, said Cramer, and that's exactly what it it got a little over a year ago.

Except that when the downgrade happened, the world didn't end as predicted. Cramer said this time around won't be any different. The media has a tendency to over-hype these events, which is why new regulations haven't crippled the banks and why another debt downgrade won't cripple the economy.

When push comes to shove, there has to be a debt ceiling deal because no politician gets re-elected if the government shuts down and Social Security checks don't go out on time, Cramer explained. In the meantime, even if we have to call ourselves the United States of Three-Ring Circuses, once the deal is done and certainty returns to the markets there will be a flood of new money rushing in.

That's why investors need to ignore the doom and gloom reporting and the wave of analyst downgrades, said Cramer, because the time to invest is before that money flows in, not afterwards.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Michael Sutherlin, president and CEO of Joy Global ( JOY), the mining equipment maker that forecast a turn in the Chinese economy back on Sept. 13 when Cramer last spoke with Sutherlin.

Sutherlin said his company continues to see improvement in China and is seeing a pickup in demand for everything from electricity to steel production to truck volumes to exports.

He said there's also a restocking story occurring in China, as power plants have reduced their inventory for coal from 31 days to just 18, while steelmakers have dropped their supplies from 18 days to just 12. As demand picks up, said Sutherlin, those levels will need to be replenished, something that will most likely occur in the second half of 2013.

Back in the U.S., Sutherlin said customers remain cautious, but he noted that investments are still being made and land for new mines is still being bought.

Cramer said he remains a believer in Joy Global because the company clearly has a handle on the global economy few other companies have.

Looking for Discounts

After being on a roll for the past few years, the dollar stores are now getting crushed, Cramer told viewers, but that doesn't mean there aren't any discount retailers worth owning.

Cramer said that all of the dollar stores, including Dollar General ( DG), Family Dollar ( FDO) and Dollar Tree ( DLTR), have been rolling over the past few months, with Family Dollar falling over 25%.

That should come as no surprise, he said, as Dollar Tree reported stalled same store sales in Nov, while Dollar General reported falling gross margins and Family Dollar missed earnings by a full six cents a share.

What's to blame for the weakness? Cramer said the dollar stores are getting squeezed by the likes of Wal-Mart ( WMT) and a reinvigorated Target ( TGT) as well as by drugstore chains like CVS Caremark ( CVS). In addition, the dollar stores are facing tough comparisons, ones they aren't likely to beat.

Cramer said the dollar stores are attractive on a valuation basis, with Dollar Tree trading at 14 times earnings, Dollar General at 13 times and Family Dollar at 13.5 times, while historically they fetch between 16 and 17 times earnings. But with no catalyst to help them get there, he said buying them now would be a "no no."

So what should investors consider buying? Cramer said why not consider Five Below ( FIVE), the chain with 243 locations that has seen its shares almost double since its IPO last year? Five Below posted better than expected earnings that sent shares up over 8% today and even a secondary offering of stock wasn't enough to knock them off their game.

Lightning Round

In the Lightning Round, Cramer was bullish on Total SA ( TOT) and Cisco Systems ( CSCO).

Cramer was bearish on Antares Pharma ( ATRS), > Chesapeake Energy ( CHK) and EMC ( EMC).

Am I Diversified?

In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.

The first portfolio included: Apple ( AAPL), Caterpillar ( CAT), Celgene ( CELG), Gilead Sciences ( GILD) and Yum Brands ( YUM).

Cramer said this portfolio can't include both Celgene and Gilead. He recommended selling Celgene and adding in Ross Stores ( ROST) to gain some retail exposure.

The second portfolio's top holdings included: Apple, Annaly Capital ( NLY), Southern Copper ( SCCO), Eli Lilly ( LLY) and iShare Gold Trust ( IAU).

Cramer blessed this portfolio as properly diversified.

The third portfolio had: Qualcomm ( QCOM), Verizon ( VZ), iShares Silver Trust ( SLV), Whole Foods ( WFM) and Hain Celestial ( HAIN) as its top five stocks.

Cramer recommended selling Hain in favor of a drug stock like Pfizer ( PFE).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said it's time to start making money in the bank stocks again.

He said the revaluation of the financial sector has begun, as evidenced by the strong earnings from both Goldman Sachs ( GS), a stock he owns for his charitable trust, Action Alerts PLUS , and JPMorgan Chase ( JPM).

Cramer said with much of the government meddling behind them, these banks are returning most of their incremental gains directly to shareholders, which is why these stocks are buy, buy, buys right here.

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

-- 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
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, GS and YUM.

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.

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