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NEW YORK (TheStreet) -- The market's weakness has nothing to do with the companies you're buying. The weakness is caused by hedge funds, initial public offerings and foreign money, Jim Cramer said Tuesday on Mad Money.
Cramer said he's had a hard time figuring out why two of his favorite stocks, Time Warner (TWX) and CBS (CBS), have been ravaged by sellers. Time Warner has a terrific dividend, it's buying back stock and it's pumping out hit programs one after another. Meanwhile, CBS is a hit machine, churning out series after series that are huge hits around the globe.
But then the news came out Tuesday of a major hedge fund returning nearly $2 billion to shareholders after huge redemptions. Two of that fund's major holdings were, you guessed it, Time Warner and CBS.
Then there's the selling pressure coming from too much supply. Cramer said that stocks are, after all, supply and demand driven. With so many new IPOs hitting the street and the lockup period for older IPOs now expiring, the flood of stocks for sale is simply too much for the market to handle.
Finally, Cramer said he's seeing huge money flows out of Russia and into U.S. bonds, something that's driving bond prices higher, making money managers think things are weaker than they really are.
Add all these market moving forces together and the traditional relationship between stock prices and earnings has become distorted, which is why things are so confusing, Cramer concluded.
An Impressive Oracle
There always a lot of armchair quarterbacking surrounding famed billionaire Warren Buffett and the holdings in his Berkshire Hathaway (BRK.B) conglomerate. But while many are critical of Buffet's holdings, Cramer said that overall he's impressed.
Among Berkshire's top holdings are some stocks Cramer owns for his charitable trust, Action Alerts PLUS. They include IBM (IBM), Procter & Gamble (PG) and US Bancorp (USB). Cramer said all three of these companies are solid performers.
Other Buffett holdings include Wells Fargo (WFC), a leader in returning capital to shareholders; American Express (AXP), another financial that survived the downturn fairly unscathed; Exxon Mobil (XOM), an oil giant with a great buyback program, and DirecTV (DTV), which is up a nice 13% for the year.
Among Berkshire's top 10 holdings, Cramer only found two, Coca-Cola (KO) and Wal-Mart (WMT), of which he's not a fan. That said, Coke is still a growth name overseas and Wal-Mart seems to have stabilized its decline, so even they may have an pretty good 2014.
Cramer said he's a buyer, not a seller, of Buffett and his eye for value.
In the next installment of his "Best For Your Buck" series, Cramer offered his favorite stock priced between $100 and $500 a share. That stock was high-end audio purveyor Harman International (HAR).
Cramer explained that Harman makes everything from high-end headphones to speakers for your home and even infotainment systems for luxury cars. The company has a portfolio of 5,350 patents, making its technology difficult to duplicate.
But Harman is a lot more than just great hardware. Nearly 70% of what the company does is now software such as the safety, navigation and connectivity systems that flow through today's auto infotainment systems. As these systems move down from luxury to "regular" cars, Harman's market share and dominance will only expand.
Cramer noted that even Apple's (AAPL) recently introduced CarPlay technology will require an in-car infotainment system like what Harman provides.
Shares of Harman are up 189% since Cramer last spoke with Harman's CEO back in June 2012, but they're still selling at an inexpensive 19 times earnings with a 24% long-term growth rate. Cramer said he'd be a buyer before the company reports later this month, but would not chase shares higher.
Executive Decision: Klaus Kleinfeld
For his "Executive Decision" segment, Cramer spoke with Klaus Kleinfeld, chairman and CEO of Alcoa (AA), a stock that's up 17% since Cramer last last spoke with Kleinfeld in early January. Cramer said Alcoa provides a wealth of knowledge on the global economy as it has a hand in everything from aerospace and autos to industrial machinery and consumer packaging.
Kleinfeld said Alcoa had a terrific quarter, with its downstream businesses reporting record profits, a tripling of profits in its midstream businesses and even improvements in upstream aluminum production. He said Alcoa's vertically integrated structure allows it to run all three of these segments better than anyone else.
One of the bright spots for the quarter was Alcoa's automative business. Kleinfeld said the trend toward "light weighting," or making autos lighter, is just getting started. The new 2015 Ford (F) F-150 pickup, for example, will feature a body that's 97% aluminum, he noted, and with new wheel technology and other components, it's an exciting time to be in the aluminum business, Kleinfeld continued.
Cramer said that Alcoa has reinvented itself and deserves to be much higher.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Ed Ponsi over the charts of Amazon.com (AMZN) and IBM.
Looking at a daily chart of Amazon, Ponsi noted a trend of lower highs and lower lows as well as the stock falling below its 200-day moving average. Making matters worse, it appears Amazon's 50-day average is about to cross below the 200-day, which would be even more bearish. Ponsi felt that $280 a share could be possible before the stock stabilized.
Meanwhile, IBM's daily chart showed the opposite patterns, with a 50-day moving average crossing above the 200-day as well as a bullish "rounded bottom" formation. Ponsi felt if IBM could cross $195 a share it would be smooth sailing to new all-time highs.
Cramer said from what he knows of rotations, investors are indeed likely to keep buying into the inexpensive IBM, but Amazon stock has nine lives and he's not ready to count the company out just yet.
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-- Written by Scott Rutt in Washington, D.C.
To email Scott about this article, click here: Scott Rutt