Jim Cramer's 'Mad Money' Recap: Take Profits and Go Home

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NEW YORK (TheStreet) -- Portfolio managers are locking in their gains and heading to the movies, Jim Cramer said on "Mad Money" Thursday as he attempted to explain the real reasons behind the late-day selloffs the markets have been seeing.

Cramer recalled when, as a hedge fund manager back in 1993, he found himself beating the S&P 500 by almost double for the year. By the time December rolled around, the only prudent thing to do was sell everything and go home, he explained. Continuing to trade would only risk losing those spectacular gains.

That's what many professional money managers are doing today, just biding their time, day trading on the momentum names and selling everything by the close, said Cramer -- locking in their gains, tweaking their positions and making sure their profits look just right for Jan 1.

Cramer said there's only one potentially big bad event between now and the end of the year and that's the Federal Reserve meeting next week. But with a looming budget deal in Washington, even the Fed news may be met with a yawn. Investors can still buy some of the long-term winners, such as Home Depot (HD), which he featured on last night's show. but outside of those, there might not be too many exciting events over the next few weeks.

Adoration Runs Deep

Investors betting against the stocks the markets love are losing fortunes, Cramer told his viewers. Shares of Twitter (TWTR), Tesla Motors (TSLA), Netflix (NFLX) and Amazon.com (AMZN) just won't quit heading higher.

Cramer said the love that investors feel for these stocks is unconditional and the adoration runs very deep. Tesla may sell as many cars in a quarter as Ford (F) does in a day, but that doesn't seem to matter. Amazon may not ever turn a profit, but that's OK, too, as long as it keeps showing off its aerial drones.

Netflix may pay a ton for new content and investors don't even bet an eye -- in the end, Netflix will be the one with the hot new content everyone wants to watch. Then there's Twitter. People love to tweet, said Cramer, and that makes them love to buy Twitter and then tweet about buying Twitter.

Cramer said when it comes to these "cult" stocks, investors should never bet against the love.

Executive Decision: Terry Lundgren

For his "Executive Decision" segment, Cramer sat down on location with Terry Lundgren, chairman, president and CEO of Macy's (M), at the company's flagship store in New York City. Shares of Macy's, a holding in Cramer's charitable portfolio, Action Alerts PLUS, are up 32% in 2013 and the company last delivered an eight-cent-a-share earnings beat on a 3.5% rise in same-store sales.

Lundgren credited Macy's success to having the most talented team in retail. He said the company's "MyMacy's" initiative, which allows local buyers to stock stores with the items that sell best in their regions, has been a huge win, as has the company's omni-channel staff training efforts.

Overall, Lundgren said, he feels good about this holiday season, even with the compressed calendar. He said the retail business is always promotional but Macy's remains in control of its promotions. He said the consumer is feeling a little bit better this year, which is translating into strong sales in many different categories.

Lundgren said that with the cold weather, outerwear has been strong, as have handbags and beauty items. Housewares is also an important category for Macy's, he noted, and there are plenty of hot new items this year. Even big-ticket items like furniture are doing well as the housing market recovers.

When asked why brand names appear to be selling so well, Lundgren said customers know brand names and trust brand names. He said when you buy a brand, you know what you're getting, you know the materials, you know the quality and you know the sizes, all of which are important to a customer.

Finally, when asked about the company's balance sheet, Lundgren said the company is always looking to have a good stock buyback program but Macy's is not opposed to a strategic acquisition if a good one comes along.

With so many retailers complaining this holiday season, Cramer said that Macy's remains a standout.

Lightning Round

In the Lightning Round, Cramer was bullish on BP (BP), Kohlberg Kravis Roberts (KKR), Abbott Laboratories (ABT), Apollo Global Management (APO) and Blackstone Group (BX).

Cramer was bearish on Timken (TKR).

Executive Decision: Patti Hart

For his second "Executive Decision" segment, Cramer sat down with Patti Hart, CEO of International Game Technology (IGT), a stock that's trading down at 12.2 times earnings with a 14.5% growth rate after the company missed earnings last quarter. Shares of IGT also sport a 2.5% dividend yield.

Hart said she was very excited to once again be in New Jersey, the third state to allow online gambling but the first to limit it to state residents. She said it's always difficult to be the first, but New Jersey took a bold step and is now reaping the rewards.

By Hart's estimates, some 30,000 to 70,000 new online players have already given online gambling a try, a number which is increasing as awareness builds for the category. So far there is no cannibalization at any of the land-based casinos, Hart noted, and if trends follow that of Europe, land-based gambling will see a pickup as players get a taste online.

That said, Hart made it clear that IGT's land-based business will continue to drive the company's earnings for the foreseeable future. She said her company enjoys a 45% market share in that business and it will take a lot of states adopting online gambling before the Internet will move the needle for IGT.

IGT is also making lots of progress with its share repurchase program, Hart said. The company has already bought back nearly 15% of the company's shares outstanding. Cramer called IGT a pioneer in its sector and a stock to watch, especially given its new, lower valuation.

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 Facebook (FB), Seagate (STX), Priceline.com (PCLN), Amazon.com and Google (GOOG).

Cramer said this portfolio was not diversified and had far too many tech stocks.

The second portfolio's top holdings included Hershey (HSY), JPMorgan Chase (JPM), Coca-Cola (KO), Verizon (VZ) and Kimco Realty Trust (KIM).

Cramer said this portfolio cannot have both Hershey and Coca-Cola, so he advised selling Coke in favor of Bristol-Myers Squibb (BMY).

The third portfolio had Dorman Products (DORM), Dunkin Brands (DNKN), Amazon.com, Johnson & Johnson (JNJ) and Home Depot as its top five stocks.

Cramer once again identified two of a kind with Dorman and Home Depot. He suggested selling Dorman and adding an industrial like United Technologies (UTX)

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 JNJ, JPM and M.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

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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