Jim Cramer's 'Mad Money' Recap: Making Portfolios Washington-Proof

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NEW YORK ( TheStreet) -- Can investors Washington-proof their portfolios? That was the question Jim Cramer asked on "Mad Money" Wednesday as he tried to answer what everyone wants to know, "What should I own going into the looming government shutdown debate?".

Cramer said that investors can count on one thing: just as soon as the markets digest one bit of news, i.e. last week's Federal Reserve announcement, it will immediately move onto the next bit of news, which, unfortunately, involves another lengthy debate over the debt ceiling, health care and a probable government shutdown.

But while some companies blame Washington for their misfortunate quarterly results, others, including Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS , Bed Bath & Beyond ( BBBY) and Amazon.com ( AMZN), all had terrific things to say of late.

Indeed, Washington doesn't seem to have affected sales of home-related items like paint or furniture, nor autos or boats or even homes themselves, according to Lennar ( LEN).

Cramer said the key is to buy international companies such as Agco ( AGCO), which he highlighted last week. General Motors ( GM) would also be a good pick, as would EOG Resources ( EOG), he said, as the oil boom doesn't wait for Washington.

Cramer also said that aerospace remains strong, as are the casino names. Technology stocks including Facebook ( FB), another Action Alerts PLUS name, are also impervious to Washington.

No portfolio can be completely Washington-proof, Cramer concluded, but investors can certainly improve their odds by going global and leave U.S. stocks behind.

Executive Decision: Jim Whitehurst

In the "Executive Decision" segment, Cramer spoke with Jim Whitehurst, president and CEO of Red Hat ( RHT), the open-source software provider that saw its shares fall 11% earlier this week after Wall Street decided the company's 2-cents-a-share earnings beat and maintained guidance weren't enough to justify its valuation.

Whitehurst said there are multiple ways to look at growth, and the Wall Street community decided to look at only one of them -- billings. Unfortunately, billings offers an incomplete picture, he continued. As deal sizes surpass $10 million, many companies are choosing to pay over time rather than all upfront, which makes longer-term cash flows a more important number to look at, Whitehurst explained .

Red Hat continues to have a strong core of Linux products and middleware, said Whitehurst, along with a host of new products that are just at the beginning of their life cycles. Red Hat still only has less than 20% market share in the on-premise data center market, leaving a lot of room for the company to expand.

When asked about Europe, Whitehurst said he's not seeing across-the-board recovery there, but is instead seeing only pockets of growth with other pockets of weakness. Over the long term, however, Red Hat remains poised for growth both in Europe and across the globe.

Cramer told viewers to read the research because the analysts feel there is a big change occurring at Red Hat, while Whitehurst believes otherwise.

A Full House

The results are in and the homebuilders can indeed be bought, Cramer told viewers -- just not right now. That was his conclusion after seeing the Lennar ( LEN) quarterly results and interviewing its CEO on last night's show.

Cramer explained that everyone wants to know if the sudden surge in interest rates would be enough to derail the housing recovery, but Lennar told us that easy credit, along with the fact that we're still not building as many homes as we need, were forces powerful enough to overcome that spike. In fact, Lennar was able to post higher-than-expects gross margins thanks to lower lumber and other costs, even in the face of the surge in rates.

Cramer said Lennar offers an excellent perspective into the homebuilding equation and confirms the spike in rates, while enough to surprise Wall Street, was digestible for home buyers and the mortgage industry.

So why not buy the homebuilders down here? Cramer said investors need to get through the wrangling in Washington first. But as soon as those deadlines pass, the time to buy these stocks may indeed be at hand because the long-term trends for housing in the U.S. remain strong with the Fed continuing its bond buying for the foreseeable future.

Lightning Round

In the Lightning Round, Cramer was bullish on Johnson & Johnson ( JNJ), Baxter International ( BAX), Alcatel Lucent ( ALU), Domino's Pizza ( DPZ) and FireEye ( FEYE).

Cramer was bearish on Peabody Energy ( BTU) and Bank of New York Mellon ( BK).

Executive Decision: Vivek Ranadive

In his second "Executive Decision" segment, Cramer spoke with Vivek Ranadive, chairman and CEO of Tibco Software ( TIBX), a stock that's up 22% since Cramer last checked it in December. Tibco just reported a 6-cents-a-share earnings beat on higher revenue and gross margins. Shares of Tibco trade at 20.6 times earnings with an 11% growth rate.

Ranadive started off by highlighting FedEx ( FDX) as one of Tibco's customers that is taking advantage of his company's 21st century software to analyze big data in real time. He said if your company provides the right products, then they will always be in demand -- which is why Tibco is seeing a pickup in sales across the globe, from the U.S. to Europe and into Asia.

Ranadive also talked about how Tibco software is helping the oil industry, from analyzing data to determine where the best chances of striking oil are, to telling oil tankers which ports will provide them with the best price for their cargo while they're on the high seas.

Cramer noted that after being stalled for a few quarters, this was the breakout result from Tibco that he has been awaiting.

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: Pinnacle Foods ( PF), Radian Group ( RDN), Breitburn Energy ( BBEP), US Airways ( LCC) and Canadian Solar ( CSIQ).

Cramer said "wow," as this portfolio was perfectly diversified.

The second portfolio's top holdings included: Alcoa ( AA), Bank of America ( BAC), EMC ( EMC), Ford ( F) and Ruth's Hospitality ( RUTH).

Cramer said this portfolio "rocked."

The third portfolio had: Novo Nordisk ( NVO), Nokia ( NOK), Berkshire Hathaway ( BRK.B), Citigroup ( C) and Ford as its top five stocks.

Cramer identified two of a kind with Berkshire and Citigroup. He said the portfolio needed a defense stock like Lockheed Martin ( LMT).

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

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, F, FB and JNJ.

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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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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