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NEW YORK ( TheStreet) -- Forget about bottom fishing for bargains, Jim Cramer announced to his Mad Money viewers Tuesday. If investors want to find winners in this market, they need to fish from the 52-week high list.
Bottom fishing in this market has been a disaster, Cramer told viewers, which he knows first-hand thanks to Vale (VALE) , a stock Cramer, regrettably, owns for his charitable trust, Action Alerts PLUS and the company that rang the opening bell today on the New York Stock Exchange. Shares of Vale are down 40% in 2014, yet they keep hitting new lows with no signs of stopping. Without growth in China, Vale has no chance of rallying, Cramer conceded.
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What about high-yielding stocks? Cramer said even a double-digit dividend yield won't shield investors from a 40% to 50% decline in a company's stock price. Just ask investors in Seadrill (SDRL) , which today suspended its dividend; shares have fallen 67% so far in 2014. Cramer said he'd stay far away from other drillers like Transocean (RIG) and Ensco (ESV) , another sore spot in Action Alerts PLUS.
Cramer said investors are getting burned big with automakers like General Motors (GM) , yet another Action Alerts PLUS laggard, and in retail with J.C. Penney (JCP) , two more examples of down stocks going even lower.
But then there are the winners that only seem to keep going higher. Cramer said that's certainly the case with biotechs like Regeneron (REGN) , BioMarin (BMRN) and Isis Pharmaceuticals (ISIS) . It's also the case with the airlines, he added. Why buy American Airlines (AAL) , which is up big, when you can buy Southwest Airlines (LUV) , which is up even more?
Yes, the market is unfair sometimes, forcing investors to buy high only to sell higher. But in this market, Cramer said, to the victors go all the buyers.
T. Boone Pickens on Oil Prices
In a special interview, Cramer welcomed oil tycoon T. Boone Pickens to the show to get the real story on what's happening with oil prices.
Pickens said OPEC members will eventually have to cut their production to meet the lower demand for oil worldwide. He said while Saudi Arabia has the cash reserves to endure lower prices, many other countries, especially Russia, cannot handle cheap oil for long.
How did things get this bad so quickly? Pickens said 2014 oil growth projections just never materialized and we're ending the year with about half as much growth as we thought. However, he expects oil prices to return to $100 a barrel over the next 12 to 18 months.
As for drilling here in the U.S., Pickens said after growing production by one million barrels a day every year for the past three years, production will likely stay where it is for 2015 before going higher. He said the well-capitalized independent drillers are good buys at these depressed levels.
Cramer agreed, saying the time to buy good oil stocks like EOG Resources (EOG) may soon be at hand.