Cramer's 'Mad Money' Recap: Keeping Up With the Rally

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NEW YORK ( TheStreet) -- Fund managers are scrambling to keep pace with this market, Jim Cramer told "Mad Money" viewers Wednesday, and that will only help send stock prices even higher.

Cramer said, yes, the return of the individual investor to the stock market is helping to fuel the 2013 rally, but it's only part of the story. He said as these investors pile into index funds, it's also forcing hedge funds and money managers to put their money to work even faster just to keep up. As of right now, the big boys are well behind the curve.

Cramer explained that with GDP slowing in the fourth quarter thanks to fiscal-cliff concerns and Hurricane Sandy, money managers had no choice but to raise cash and play it conservative. After all, they couldn't afford a quick 10% haircut if the U.S. economy did indeed fall over the cliff. But when the worst case didn't happen, that left them chasing the rally as seller's remorse kicked into full gear.

U.S. stocks will remain desirable investments because the Federal Reserve remains committed to keeping interest rates low and thereby hampering the bond market. Cramer said that will make high-yielding dividend stocks among the hottest stocks around in the weeks to come.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with David Demshur, president and CEO of Core Laboratories ( CLB), a stock that's up 228%, including reinvested dividends, since Cramer first recommended the stock in August 2006. Demshur has appeared on "Mad Money" seven times to update viewers on the growth of his company.

Demshur said the renaissance in American oil and gas is only just beginning. He said production may be at 15-year highs but development in our shale resources has only just begun. Demshur also noted that the latest data suggest North America may have not one, but two additional shale regions yet to be discovered.

Elsewhere in the world, Demshur noted Mexico is looking to expand its deepwater drilling efforts, something with which Core Labs will be helping. The company also has 12 projects underway in Iraq, including the revival of older oil fields in the south as well as new projects in the north of the country. The North Sea is another area of interest, said Demshur because that region is now aging, which plays right into the technology that Core Labs provides.

Cramer said Core Labs remains a terrific technology company that's rooted in the booming oil and gas markets. He continues to recommend the stock.

Amazon Vs. Apple

Not all stocks are treated equally on Wall Street, Cramer told viewers. For proof, look no further than the earnings releases from Amazon.com ( AMZN) and Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS.

Cramer said Apple was able to beat Wall Street expectations when it reported last week. Yes, iPhone sales came in a bit light, but the company delivered on profits and sold more iPads than expected. The result? A 12.4% haircut in the stock on a single day.

Compare that to Amazon, which missed earnings by 6 cents a share and fell short on revenue by $1.3 billion. Wall Street's response? Send shares up a cool 10% in after-hours trading.

Amazon trades at 68 times earnings, Cramer reminded viewers, Apple just nine times earnings, and that's not even counting the $137 billion in cash. Are these valuations ridiculous? Absolutely. But do they make sense to Wall Street? You bet.

Cramer explained that Apple has lost its aura of growth, which means it's now being treated like any other stock. Analysts are asking questions and are demanding answers. Meanwhile, Amazon still has its growth, which means it can provide foggy guidance, or almost no guidance at all, and analysts will look the other way.

How many Kindles did Amazon sell? No one knows. By how much is the eBook business growing? Guess. Meanwhile, Apple must provide iPhone and iPad sales to the letter and even that is not enough.

Cramer said Amazon has no competition, which means it only needs to stop investing in its business to make money. The company also still has its visionary founder, Jeff Bezos. But Apple has competitors, some would argue good ones, which means it's being held to different standards.

Is the market fair? Decidedly not, Cramer said. But once investors realize the rules of the game, Wall Street can begin to make a little sense.

Lightning Round

In the Lightning Round, Cramer was bullish on SandRidge Mississippian Trust ( SDT), 3D Systems ( DDD) and Duke Energy ( DUK).

Cramer was bearish on Jos. A. Bank Clothiers ( JOSB), Energy Transfer Partners ( ETP), Leucadia National ( LUK) and SandRidge Energy ( SD).

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: Berkshire Hathaway ( BRK.B), VMWare ( VMW), Celgene ( CELG), Caterpillar ( CAT) and John Deere ( DE).

Cramer said this portfolio cannot have both Caterpillar and Deere and he would sell Deere and add Home Depot ( HD).

The second portfolio's top holdings included: Plains All American Pipeline ( PAA), CVS Caremark ( CVS), eBay ( EBAY), American Campus Communities ( ACC) and Las Vegas Sands ( LVS).

Cramer called this portfolio "beautiful."

The third portfolio had: Smith & Wesson ( SWHC), Whole Foods ( WFM), Facebook ( FB), New York Mortgage Trust ( NYMT) and Manchester United ( MANU) as its top five stocks.

Cramer said this portfolio was also properly diversified.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer said he can't ignore the irony that on the same day Chesapeak Energy ( CHK) founder and CEO Aubrey McClendon stepped down over an apparent fight with the company's board of directors, Kinder Morgan Energy Partners ( KMP) made a bid for Copano Energy ( CPNO).

Cramer explained that McClendon bet the company a few years ago on the premise that natural gas and natural gas liquids would rise in value, a bet that he lost big. Meanwhile, Kinder is making the same bet as McClendon, only a few years later. Cramer said that Kinder is now poised to reach the promised land that McClendon saw but was unable to achieve.

Chesapeake will survive, noted Cramer, albeit as a smaller company, but Kinder will be the big winner, he said, as that company has always delivered for its shareholders.

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-- 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 and 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."

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