Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (TheStreet) -- The markets are moving at lightning speed, Jim Cramer said on "Mad Money" Wednesday. That means in order to be successful, investors need to be able to navigate the crosscurrents in real time.
That was the case with Apple (AAPL - Get Report), a stock Cramer owns for his charitable trust, Action Alerts PLUS. Apple had been trading for weeks on expectations of sales in China. Today, activist investor Carl Icahn called the company "disgraceful" for not returning more capital to shareholders -- instantly, the markets forgot about China and started trading on Icahn.
Another company that turned on a dime was Netflix (NFLX - Get Report), which saw shares surge 17% on huge earnings and subscriber growth. Meanwhile, IBM (IBM - Get Report) shares fells as its lofty goals and five-year plans appear to be faltering badly.
In other sectors, from oil and natural gas to telco equipment, the trading has been fast and furious, Cramer concluded. That's why investors need to hold onto their hats and prepare for what could be a wild ride.
Executive Decision: Moshe Gavrielov
For his "Executive Decision" segment, Cramer spoke with Moshe Gavrielov, president and CEO of Xilinx (XLNX - Get Report), an Action Alerts PLUS holding that's proven Cramer's rule of never trading the headline. After shares plummeted on a penny-a-share earnings beat with weaker guidance, they quickly rebounded 2.2% as savvy investors looked at the key metric, Xilinx' new 28-nanometer chip sales, which were up 79% year over year.
Gavrielov said that while Xilinx was only able to deliver at the low end of its revenue range for the quarter, its other metrics came out just fine. He said the company is still on track for 2% to 6% growth for 2014 and the company is still in the early stages of the new 28 nanometer rollout.
When asked why 28 nanometers is so important, Gavrielov explained these new, smaller chips are necessary to bring features like video to cellphones. Video is very demanding on both phones and infrastructure, he noted, which is why we're seeing a surge in spending to keep wireless customers happy around the globe.
Turning to the topic of gross margins, Gavrielov said that while margins came in lighter this quarter, he fully expects Xilinx' other, higher margin businesses to catch up later in 2014, returning margins to traditional levels.
Cramer said pointedly that shares of Xilinx are headed higher.
Diageo vs. Brown-Forman
With the news that Beam (BEAM) is getting taken over at a 25% premium, there's no denying the spirits business is on fire, Cramer told viewers. But of the two remaining pure plays, Diageo (DEO) and Brown-Forman (BFB), which one is the better investment? Cramer said while he likes both companies and both stocks he's giving the edge to Brown-Forman.
Cramer said Diageo remains a terrific long-term investment, but in the near term the company derives 42% of its sales from the emerging markets, which have been spotty of late. The company does sport a 3% yield, but it also trades at 19 times earnings with an 11% growth rate. Given that shares are at their 52-week highs, Cramer said he needs to see a meaningful pullback before he'll find Diageo compelling.
Brown-Forman, on the other hand, is the smaller of the two companies and has more room to grow. The company is levered to whiskey with its Jack Daniels brand and whiskey is outperforming the industry as a whole. Forman currently gets 45% of sales from the U.S., with far less stemming from emerging markets. The company's prospects in areas like Russia and Poland are sizable.
Cramer said he'd also like to see a pullback in Brown-Forman as well, but even at current levels the stock is attractive.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer reminded viewers that when it comes to trading around earnings season, it's all about expectations. Expectations determine whether a stock trades up or down and by how much.
That's why a stock like Coach (COH) saw its shares crushed after it reported. The stock was well off its lows and investors were blindsided by same-store sales that were twice as bad as expected.
That's also how a stock like Norfolk Southern (NSC - Get Report) saw its shares spike when it reported. Earlier in the week, the expectations were that Norfolk would follow its rival CSX (CSX - Get Report) lower.
Those were just three examples of why expectations are everything when it comes to earnings.
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 second portfolio's top holdings included International Game Technology (IGT - Get Report), Wisdom Tree (WETF - Get Report), U.S. Ecology (ECOL - Get Report), Precision Castparts (PCP) and Estee Lauder (EL - Get Report).
Cramer said this portfolio was properly diversified.
The third portfolio had Google (GOOG - Get Report), Gilead Sciences (GILD - Get Report), JPMorgan Chase (JPM - Get Report), Honeywell (HON - Get Report) and Walt Disney (DIS - Get Report) as its top five stocks.
Cramer said he seas a big fan of this portfolio and its diversification.
The fourth portfolio's top stocks were Seadrill (SDRL), NXP Semiconductor (NXPI - Get Report), Biomarin (BMRN - Get Report), American Railcar (RAIL - Get Report) and International Game Technology (IGT - Get Report).
Cramer also blessed this portfolio as properly diversified.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here: Scott Rutt