Cramer's 'Mad Money' Recap: I Told You So

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NEW YORK ( TheStreet) -- Today's rally rebuffed all the market's objections in spectacular fashion, Jim Cramer told "Mad Money" viewers Wednesday, showing just how wrong the bears were during the market selloff seven days ago.

Cramer said that just a week ago the markets were worried about a slowing U.S. economy, but today saw a good durable goods number along with price increases in both containerboard and steel, two very economically sensitive commodities.

He said the transports confirmed the data by rallying hard on the news, so much so that Cramer even recommended all three major airlines -- United Continental ( UAL), Delta Air Lines ( DAL) and US Airways ( LCC).

The markets were also worried about Italy, noted Cramer, but JPMorgan Chase ( JPM), the large international bank, shrugged off those fears. Meanwhile, Joy Global ( JOY) told investors that demand is not slowing in China, another fear last week.

The list of worries included a weak U.S. consumer, but that was rebuffed by just about all of retail heading higher Wednesday. Even the restaurants were strong, noted Cramer. Housing continues to be strong, as Toll Brothers ( TOL) was able to make up lost ground from last week as well.

Finally, there were worries over the Federal Reserve and the massive government budget cuts known as sequestration. Cramer said Ben Bernanke put the Fed fears to rest, while the defense stocks are soaring in the face of looming budget cuts.

Add it all together and Cramer said the bears couldn't have been more wrong when they were in the midst of their panic selling last week.

Executive Decision

In the "Executive Decision" segment, Cramer sat down with Dr. Harvey Berger, chairman and CEO of Ariad Pharmaceuticals ( ARIA), a stock that's risen 33% since Cramer last spoke to Berger in June 2012. Ariad recently received Food and Drug Administration approval for Iclusig, an orphan drug to treat leukemia that is expected to cost $115,000 per year.

Berger said that it has only taken five years for Ariad to go from its first clinical trials to FDA approval, which is a very short time period in the biotech world. He said that speaks to the difference Iclusig is making in the lives of its patients. The drug is expected to generate over $1 billion a year for Ariad in the next few years.

Berger noted that while Iclusig is currently used as a last resort for patients where other treatments have failed, the company has studies underway looking at its use as a first-line treatment, which would open up its possibilities greatly. He said the main challenge for Ariad now is educating doctors on its safety and performance.

When asked about whether Ariad is a takeover target now that it has approval for Iclusig, Berger said biotech companies can be built to be bought or they can be built for the long term. Ariad is one of the few being built as one that discovers, develops and markets its findings on a global scale.

Cramer said Ariad is doing all the right things and he continues to be a believer in the company.

On the LINE

In his second "Executive Decision" segment, Cramer sat down with Mark Ellis, chairman, president and CEO of Linn Energy ( LINE), an oil and gas master limited partnership with a 7.7% yield.

Ellis explained there is a lot of misunderstanding about the company's hedging strategy, which doesn't follow standard accounting metrics. He said Linn likes to take commodity risk out of the equation when it does a deal, which is why it'll often hedge oil prices for five years. To date, there have been no challenges to the company's accounting principles, he said, and Linn continues to pay regular dividends.

When asked about Linn's recent acquisition of assets from BP ( BP) and the acquisition of Berry Petroleum ( BRY), Ellis said that BP's assets are terrific but they were not core assets for BP, which is why they make more sense as a part of Linn. As for Berry, Ellis said there is a lot of hidden potential locked up in Berry's oil fields.

Turning to our nation's energy policy, Ellis said the U.S. still has a lot of undiscovered oil and gas reserves and he feels the U.S. has the technology to become energy independent if it would adopt an energy policy that made sense.

Cramer continued his support for Linn, reminding investors that for 401(k) and IRA accounts they should consider LinnCo ( LNCO), which is a subsidiary that owns shares of Linn and avoids arcane tax rules surrounding MLPs and tax-deferred accounts.

Lightning Round

In the Lightning Round, Cramer was bullish on AmeriGas Partners ( APU), Phillips 66 ( PSX), Nordic American Tanker ( NAT), Facebook ( FB), Whole Foods Markets ( WFM) and Qualcomm ( QCOM).

Cramer was bearish on Baidu.com ( BIDU), Pengrowth Energy ( PGH), Ship Finance International ( SFL) and Harris Teeter Supermarkets ( HTSI).

Good Competition

In a third "Executive Decision" segment, Cramer spoke with Richard Pops, chairman and CEO of Alkermes ( ALKS), another biotech company that's been featured many times on "Mad Money." Shares of Alkermes are up 20% since Cramer last sat down with Pops in May 2012.

Pops said Alkermes will be seeing new competition for some of its anti-psychotic drugs, but that's actually a good thing as it shows there's plenty of growth in that area. He characterized it as the beginning for a whole new class of drugs and not the end for Alkermes' family of drugs.

Pops also had positive things to say about Vivitrol, his company's monthly injectable treatment for alcohol and opiate dependence. He said the drug has been a big success and patients taking the treatment simply will not relapse while on the medication. This is great news for those in the criminal justice system, he said, as many need to stay off of drugs as a condition of their parole.

Cramer said Alkermes is yet another example of a biotech company doing great and important work.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer opined on the state of the retail sector, which was supposed to be crushed by macro-economic headwinds.

Cramer said he's never been a fan of "top down" analysis as it's rarely right and often produces spectacular losses. While in theory it made sense that the American consumer would be hurt by rising gas prices and increased payroll taxes, retailer after retailer, from Macy's ( M) to Dollar Tree ( DLTR), proved that theory wrong.

That's why Cramer said it's time to circle back and buy some Michael Kors ( KORS) and Whole Foods, two stocks that have been out of favor as of late, but are likely to continue their march higher very soon.

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

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

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At the time of publication, Cramer's Action Alerts PLUS had a position in FB.

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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