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NEW YORK ( TheStreet) -- How do you sell a stock that's doing great and sell one that's doing poorly? Jim Cramer asked his "Mad Money" TV show viewers Monday as he talked about the rotation currently underway in the markets. Cramer said that for some investors, such as Warren Buffett, buying and selling stocks isn't a matter of timing the market but a matter of choosing great companies that represent great value and just owning them for the long term. But for other investors, like those managing hedge funds and mutual funds, timing is everything. That's why as the market begins selling the "slow and steady" stocks like those owned by Buffett's Berkshire Hathaway ( BRK.B) for sexier, more cyclical stocks that will do well as the global economy recovers, these managers are finding themselves in trouble. Cramer said money managers can't afford to just have "good" stocks in their portfolios, they need great ones, ones that will not only outperform the markets but also their peers. They must prove they're flexible and can change with the markets, he said, which is why the sexy stocks continue their march higher while those stocks doing well will continue to be just OK. Every fund manager will eventually have to admit they're wrong and make the switch, Cramer concluded, and investors would be wise to follow suit ahead of their desperation buying.
Executive Decision: Mark EllisIn the "Executive Decision" segment, Cramer spoke with Mark Ellis, chairman, president and CEO of Linn Energy ( LINE), the oil and gas master limited partnership with an 8.8% yield that came under fire over the weekend after harsh accusations from Barron's over the company's valuation. Ellis responded to the negative press by saying that two independent accounting firms have been combing the books at Linn for its recent acquisitions and both have valued the company between $35 to $42 a share, far more than the $18 a share Barron's implied. He also said Linn has never used "aggressive" accounting and the company's finances have never been challenged because Linn operates with total transparency.
Ellis added it appears the analysis cited in the article was based on merely a single quarter's worth of the company's results, which is not a fair metric. He said looking at a full year of results makes far more sense when determining how much Linn is worth. When asked about some of the problems in the company's first-quarter results, Ellis said the weather and infrastructure issues that hampered production will not carry over to the second half of 2013. He reminded viewers that while prospecting for oil is a risky business, Linn is completed hedged against commodity risk and only buys long-lived assets with proven reserves, both of which lessen the risk to investors significantly. Cramer said he's siding with Ellis, which is why he owns the stock for his charitable trust,
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