Jim Cramer's 'Mad Money' Recap: The Market's Wild Ride

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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), 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.

eBay (EBAY) posted in-line earnings today with miserable guidance, but all turned sunny when Icahn made a comment that he may get involved with the company and advocate a breakup.

Another company that turned on a dime was Netflix (NFLX), which saw shares surge 17% on huge earnings and subscriber growth. Meanwhile, IBM (IBM) 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), 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.

Lightning Round

In the Lightning Round, Cramer was bullish on Boston Private (BPFH), Tesla Motors (TSLA), LinkedIn (LNKD) and Apollo Group (APOL).

Cramer was bearish on Comstock Resources (CRK) and Caterpillar (CAT).

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) saw its shares spike when it reported. Earlier in the week, the expectations were that Norfolk would follow its rival CSX (CSX) lower.

In the case of Intel (INTC), an Action Alerts PLUS name, Cramer said expectations had simply gotten so high, there was no way the company could ever meet them.

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 first portfolio included Royal Bank of Canada (RY), Suncor (SU), Coca-Cola (KO), Altria (MO) and McDonald's (MCD).

Cramer said this portfolio had too much food and beverage and needed to sell Coke and add a drug stock like Bristol-Myers Squibb (BMY).

The second portfolio's top holdings included International Game Technology (IGT), Wisdom Tree (WETF), U.S. Ecology (ECOL), Precision Castparts (PCP) and Estee Lauder (EL).

Cramer said this portfolio was properly diversified.

The third portfolio had Google (GOOG), Gilead Sciences (GILD), JPMorgan Chase (JPM), Honeywell (HON) and Walt Disney (DIS) 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), Biomarin (BMRN), American Railcar (RAIL) and International Game Technology (IGT).

Cramer also blessed this portfolio as properly diversified.

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, GOOG, HON, INTC, JPM and XLNX.

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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