Jim Cramer's 'Mad Money' Recap: A Summers Reprieve

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NEW YORK ( TheStreet) -- Does the next Federal Reserve chairman really matter to the stock market? Jim Cramer told his "Mad Money" viewers Monday that over the long term, probably not that much. But for those shorting the markets going into this past weekend, it mattered a great deal.

Cramer explained that the only thing that stands in the way of higher stock prices is Washington. That's why the thought of the ever-polarizing Larry Summers taking the helm of the Fed had the bears betting big that a Summers appointment, along with other disappointing news from the Fed this week, would surely take the markets sharply lower.

That's why the surprise resignation of Summers from consideration had the bears covering their positions all day today, sending the averages up sharply. "The bears lost their best friend," he continued, and that gave the bulls all the ammunition they needed.

Among the remaining contenders for Fed chair seems to be the Fed's current vice chairman, Janet Yellen. Cramer said that unlike Summers, Yellen is widely viewed as a peacemaker and a consensus builder, something that investors find much more appealing. Only time will tell is Yellen is indeed in the running, but for the time being, the bulls received a welcome reprieve from the Washington chokehold.

All in the Packaging

With the announcement that Packaging Corporation Of America ( PKG) is buying Boise ( BZ), news that sent Packaging's stock up 10.7%, Cramer said it's time to add a paper stock to your portfolio. His recommendation? International Paper ( IP).

Cramer said the paper and container business is highly cyclical, which makes now the time to buy as the world's economies are on the mend. Better still, after getting hit hard over the past few years, the paper industry has been aggressively cutting capacity, matching supply with the new levels of demand.

International Paper is the best-of-breed player, said Cramer, as the company has not only been cutting capacity but also raising prices. These price increases have easily absorbed by buyers, making additional increases a near certainty. In addition, IP has also divested nearly seven million acres of its land holdings, making the lucrative packaging business now more than half of its business.

Other things to like about IP, according to Cramer, are the company's ample dividend and its $1.5 billion stock buyback program. Nothing shows how confident management is about the future than a big dividend and buyback, he added.

Given that IP just delivered an eight-cents-a-share earnings beat, it's no wonder this stock is just off its 52-week high. Shares currently trade at just 11 times earnings with a 15% long-term growth rate, making them a steal given its outlook and the fact that IP shares trade a full 7% below its peers.

Cramer's Anointed Stocks

With the fourth quarter nearing, Cramer said it's time to load up on the "anointed stocks," those big winners that fund managers will be piling into over the coming weeks to be able to show their shareholders they, too, are invested in all of the hottest names.

"If you can't beat 'em, join 'em," is a tried-and-true strategy on Wall Street, Cramer continued, which is why there are four stocks that he said investors should start buying ahead of the move.

Netflix ( NFLX) is the first stock Cramer said shouldn't be missed. This company is growing like a weed with accelerating revenue growth thanks to its wildly-successful original programming that's up for no less than 14 Emmy Awards. Are shares of Netflix incredibly expense by traditional metrics? You bet, said Cramer. But Netflix is no traditional company.

Next on the list is Best Buy ( BBY), the left-for-dead electronics retailer that's gotten a new lease on life thanks to a new CEO. This stock was all but written off last year, Cramer noted, but has since managed a remarkable turnaround.

Also in turnaround mode: GameStop ( GME), the game retailer that's been cutting costs and right-sizing itself in advance of a huge new gaming cycle that will be ushered in next quarter with new PlayStation and Xbox consoles. GameStop shares trade at 13.7 times earnings with a 14% growth rate.

Finally, there's TripAdvisor ( TRIP), the travel Web site with over one million reviews. Cramer said that TripAdvisor reviews can make or break travel destinations and this company is in secular growth mode as a result. Shares are still cheap at 32 times earnings with a 19% growth rate.

Lightning Round

In the Lightning Round, Cramer was bullish on Stratasys ( SSYS), Wendy's Company ( WEN), Zoetis ( ZTS), Ciena ( CIEN) and International Game Technology ( IGT).

Cramer was bearish on Coty ( COTY).

Executive Decision: Brian Sharples

In the "Executive Decision" segment, Cramer sat down with Brian Sharples, co-founder, chairman and CEO of HomeAway ( AWAY), the rental booking Web site that's revolutionizing the way properties get rented.

Sharples said HomeAway didn't invent the vacation rental business but it is making it far more efficient by moving it online. He explained that his company's new pay-per-booking model will allow those looking to rent their homes for just a few weeks a year to test the waters before becoming a full-time subscriber, drastically increasing their customer base.

Vacation rentals are currently an $85 billion business, Sharples continued, and with HomeAway growing their core business by 20% a year, there's still a ton of opportunity available.

When asked about his company's Super Bowl advertising campaign, Sharples explained that while the campaign was successful in spiking awareness, the company learned that without a continual big TV ad spend, being on TV just isn't the best use of funds. That's why HomeAway continues to advertise on online channels, which have been very effective.

Cramer said HomeAway's new augmented business model will give investors a big opportunity and they should do their homework on the company.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off against all those who say that nothing's changed since the failure of Lehman Brothers five years ago. Instead of whining, Cramer said people should offer thanks to the President and the Fed for getting it right and saving our financial system.

Cramer said that since Lehman, the banks have raise unprecedented levels of cash and have come to accept that they are no longer in charge of how they handle their affairs, the regulators are. The banking system is not perfect, but it is less opaque than it was and many of the systemic issues that almost brought down most of the Western world have been fixed.

There is no more "too big to fail," Cramer concluded, and that's why it's time to stop looking backward and focus on what's ahead.

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

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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 no position in stocks mentioned.

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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