Jim Cramer's Mad Money Review

In the current Bull market, natural resources continue to rise. Cramer's BRIC countries have allowed minerals to thrive. These BRIC countries include: Brazil, Russia, India, and China. These countries are industrializing rapidly and taking form in growth and consumption of medals. Cramer likes companies that do business abroad in these countries not native companies. Tonight he listed six companies that could make mad money with the Bull market in minerals. The first three are mining companies and the last three are extraction companies.
Mining Companies:

• BHP Billiton BHP- They are within the top three for producing copper, nickel, coal, and others.
• Freeport McMoran FCX - They are the lowest cost copper producer in the world. They are also one of the largest producers of copper and gold in the world. They yield a 2.4% dividend and are inclined to pay special dividends. This is a good long term play.
• Rio Tinto RTP - They are the mineral supermarket to the world because they have so many minerals in production. They are the 2nd largest producer of iron ore.

Extraction Companies:

• Manitowoc Co. MTW - They are the best crane company in the world and as we all know, cranes are essential for mining minerals. This company should also benefit from the Highway Bill passed by congress and the rebuilding of the Gulf Coast.
• Terex CP TEX - They make hydrolic lifts for mining materials. They should be bought on any weakness.
• Caterpillar CAT - They make the best mining trucks in the world and are the best of breed.

Tonight on Mad Money Cramer expressed that there is always a bull market somewhere and winning in the stock market is not random. You need to make plans and stick to that plan. The key is knowing yourself and what kind of trader that you think you are. He also said that you should never turn a trade into an investment because it becomes possible that emotions will drive your trading habits. If you have $50,000 to invest, Cramer said that you should buy between 5 and 10 stocks, but decide what style of trading you want to conduct and stick with that decision. The first step towards finding the next big investment is finding a financially viable company with little debt and good cash flow. This should be a basis for any investment decision, not just a general recommendation from Cramer.

Today's rally has inspired masses with the Dow closing up 105 points. In this market, being aggressive can be a good thing, but if you snooze you are bound to lose. To start the show off tonight, Cramer expressed his liking of Research in Motion (RIMM). However, his liking is just trading with this stock, not investing. He believes RIMM is bound to spike once their new Blackberry is released. The Blackberry is already used in over 60 countries and is expected to continue growing. The shares are down 27% and Wall Street has no respect for this stock and its upcoming launch of the Blackberry 8500. Expect RIMM to have serious sales on this new phone. At the heart of every good trade is somthing stupid, in this case being Wall Street's hate for this stock. Expect a better than expected quarted and the stock to rise. Bottom Line: Once the hype builds, sell the stock.
Also, the talks of RIMM and AAPL partnering up will not be enough for long term success.
There is pin action in Verizon (VZ) as well as MOT and NOK. Palm ( PALM) is cheap and should shoot up once they report earnings.

Medical Equipment companies have recently bought by big corporations. Already, companies have spent $60 billion in acquisitions in medical equipment companies. There are three companies that Cramer likes as possible takeover targets:

• Viasys Healthcare (VAS), which is big in orthapedics and has one of the most sophisticated lung assistance devices, also has very little debt.
• Vital Signs (VITL), which has a great anaesthesia and respatory business
• Sirona Dental (SIRO), Cramers favorite, makes money off the aging population and is a very strong company

Bottom Line: Big corporations are acquiring medical equipment companies, get in before it's too late.

Ligthtning Round

Bulls:

HP fly high once they report earnings

OPWV double down here

A buy at 32

BAC

C

TLM buy from 15-18

RAD could go to 6

CHK buy at 29 hold untill 34

QCOM

MCHP

CC

TI

HLT

FS

FRO ring register at 40

COP

CVX

Bears:

EXP

USB

F

TSM

SIMG

MHGC

TOL

ARLP

ARII

Final thought: If you have less than $10,000 to invest, forget stocks and jump into mutual funds.

Tonight's show started off with Cramer comparing Boeing (BA) and Airbus. BA is the company to bet on. In 2005, BA beat Airbus' orders by 55%. The key here however is not Boeing (BA) but the companies who supply them. There is a list of three petential companies that could profit: Triumph Group Inc. (TGI); Heico CP (HEI); and Moog Inc. (MOG-A). Also don't be alarmed by the critics of Boeing, the failure to meet demand will not hurt them.

Cramer also dedicated a segment of the show to his favorite hotel chain Hilton Hotels (HLT). Hilton takes pride in their all suite hotels, catering to the upscale demography. They run 2,388 properties making HLT the biggest hotel chain. However, in the past years it lacked the potential to grow because they could not build internationally. Now, since they bought out the other Hilton, it places them on the international map. They have huge growth potential all over the world. This news is not good enough though, homework should still be done before diving in to such a stock. The numbers must be looked at. In this case, the numbers hold true. Competition can't keep up with HLT. They have a 37 % gross margin blowing the other competition out of the water. Hilton uses their exceptional business model to make money. They use their name to make money. Bottom line: buy HLT.

Lightning Round
Bulls:
TE
GS
MATK
SO
VCP
MSFT long term
DEO
TLAB
SGMS
PGR
PRU
MET
HAL
BAC
C
PDC
NKE

Bears:
USNA
SONS
GERN
NTRS
SHOO

Making Sense of the market
Why do the big investment banks trade at 8X earnings and the online discount brokers trade at 16X earnings? The answer is that investors think discount brokers are the thing of the future. Investors think that investment banks and discount brokers are in the same business. THe truth is that they are in very different businesses. Investment banks deal with institutional trading, which is a very expensive and competitive business. Discount brokers deal with your average investor. People need to realize that investment banks are still part of the present and will be part of the future. They are changing from their cyclical roots and becoming secular. The reason investment banks are making so much money is because they are prime brokerages. In layman's terms, investors give the bank custody of their accounts and the bank turns these accounts over and lends money to short sellers. They are leveraged to hedge fund growth. The banks make mad money off the interest from the loans.
Bottom line: Although discount brokers like Ameritrade (AMTD), Charles Schwab (SCHW), etc. are good buys especiallyAMTD, don't think investment banks are a thing of the past. Banks such as: Goldman Sachs (GS), Lehman Bros (LEH), and Bear Stearns (BSC) should be trading at the same earnings per share. Capitalize while Wall Street doesn't is in the dark.

Cramer concluded his show by talking with the CEO of Darden Restaurants (DRI). They are the largest casual dining chain in the world with 1,390 restaurants. These restaurants include: Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, etc. This company has a lot of room for growth since they do not franchise domestically. Their 2005 sales were $5.3 billion, quarter 4 (Q4) net income of $92.3 million or $.60 eps today. Bottom Line: Pull the trigger right hear and pick up some shares.

Cramer breaks investing vow! Investing in an American Airline is no longer a heresy. The company is Continental Airlines (CAL), which is the fourth biggest airline by revenue. Why is Cramer suddenly a fan? For one, it was up today eventhough the market was crummy. Also, and most importantly, the US and Europe have made an "Open Skies" agreement which will increase demand for international flights across seas making the American Airline companies, especially (CAL) prime takeover targets. Hold on until "Open Skies" is launched.

Another note on the airline industry, if you want to make speculative plays on bankrupt airlines, get into bonds. Also, Boeing ( BA ) is the only aeropspace contractor to buy.

Tonight Cramer talked about what made Master Card (MA ) good and Vonage (VG ) bad. Starting with the cons of (VG ):

• They let investors buy up 50% without money down
• Stock opened at $17 and ended at $17.25 then fell to $14 the next day
• Verizon brought a patent infringement suit against them
• They are getting devoured in a competitve business

The pros of (MA):

• They opened strong at $39 and ended strong at $46
• They have a strong, sustainable business
• They have smart celebrity endorsements (World Cup)

Cramer also recommended trying to get a piece of the up and coming J.Crew IPO due to come out in a few weeks.

Lightning Round

Bulls:

SMSI sell at 16

NRB

HAL

NOK

XTO

RIO patience

CNX

TXU ride to 59 and buy more

GW

DIS

Bears:

HERO

TKLC

NKTR sell at 21

TIE

ZZ

To close things up, Cramer talked about how he was wrong about the long term outlook for Urban Outfitters (URBN ). They are a victim of their own succes. The bottome Line: not all stocks that go down, even the one's that Cramer liked, are cheap. Stay away from (URBN ), but stay with Cramer.

Tonight on Mad Money, Cramer exclaimed that you should be buying stocks that have recently come out with good news so there will be no surprises in the near future. And, if a stock gets hit with bad news in a bad market, the stock will drop twice as fast. Companies highlighted were: BSE, and BBY. Although the market is improving, continue to be defensive in your stocks.
Lightning Round:
Bullish: HRS, TGI, AAR, MER, SPLS, HPQ, DGX, GD, CMG, ORI
Bearish: UVN, EMC, SYT, MT

Tonight on Mad Money Cramer downplayed Ethanol stocks and said to sell the positions that you have. He said that this pullback is not a bottom (we disagree). He also stated that you should wait until the margin ratios come back down before you should jump back in the market and you should continue to be defensive and diversified.Lightning round:
Bullish: AAUK, CHK, YHOO, BRCM
Bearish: HMY, HANS, GS, TLAB, GSIC, ENER, CNXT, WMI

"Who knows where this will stop, but there is still money to be made,"says Cramer. He also said that there are plenty of stocks that have hit their bottom and it's time to go bargain hunting. The best place to go bargain hunting is in the natural gas sector because they are trading like value stocks. Natural gas is trading at the lowest ratio to oil since Cramer can remember. He said these stocks are being dumped for no reason and that you should get on the other side of the selling. He highlighted one particular stock which is the biggest player in Barnett Shale (a very important piece of property), Carizo Energy (CRZO).

An additional idea that he gave was to give a look at stocks that have probably hit a bottom. He highlighted Readers Digest (RDA). The downside has been shaken out and the stock can only go so much lower because of the core fundamentals. The company has great management and is the best selling magazine in the world with 19m subscriptions.

We're looking for a, "Big, fat bottom" in the market. The question is how do we spot a bottom? If bad news no longer effects the stock then it has hit a bottom and is due for a run up. Some speculators believe the bottom is in tech, but price to earnings ratio is too high in this sector. The price to earnings ratio is the price per share, divided by earnings per share. Cramer believes WCI Communities (WCI ) will bottom soon.

Another trading tip from Cramer, when a high profile employee such as the CEO or CFO leaves the company with no good reason, get out of that stock. This just happened with Digene Corp. (DIGE ). The CEO left unexpectedly. This raised the red flags.

If risk outweighs reward, get out of the stock. Cramer believes however, that the biotech sector is a good place to be.

Lightning Round
Bulls:
TRMP
QDEL
FNSR
ESRX
MA
EZM
NTGR
COH

Bears:
COGO
GGC

Cramer mentioned Tivo Inc. (TIVO ). He said in order to pick stocks you need to make a list of the pros and cons of the stock. With TIVO, there are only a few good things about it: Analysts are heavily bearish on this stock; great technology; and great CEO. However, TIVO is losing their uniqueness. Every company in this sector has their own form of this technology. Their growth has also been very erratic. He said that this is a dog of an investment however money can still be made off of its volatility. Bottom Line: If you want to be a good investor, seperate the good news from the hype. The news needs to lead to making money, not just publicity.

Finally, he mentioned Crystallex (KRY) again as a speculative play. A valuable lesson was learned, speculation is not for the faint of heart and do careful research before investing in KRY.

Cramer feels your pain. It's been a pretty tough market for everyone. He stressed that you should not wait for a mid day rally because it won't happen. These types of rallies have been very rare lately. In the past year, there have only been 14 times that the market closed 90 points higher once the rally started. He also mentioned that there are three ways to look for a market that is ready for a mid day rally. The first is to look at the osilator. This tool measures the pressure that the buyers and sellers are working against each other. When this indicator becomes negative that means that the market is beginning to become over sold. The second sign is that there are very few bulls when the market is ready for a rally, and the third is timing. A good rally will begin at 2:45 or later. The buyers will overwhelm the sellers to buy before close.

He said there is a way to make money in this very poor market by looking at one sector: the stocks dealing with vanity. These stocks have just started to see the benefits of the baby boomers. The first play he mentioned was PMTI who has a product which makes the lines on your fac fade. The other was AGN. The FDA just approved a product called Juvederm which is supposed to make wrinkles fade. But, wait for PMTI to fade before you buy.
Lightning Round:
Bullish:
AMD
OPWV
CMA
COP
GM
PETS
CMCSA
AKAM
Bearish:
HANS
PBR
CNL

It has been a battle between those predicting hard landings and those predicting soft landings. So far the hard landings have been felt. One thing we must keep in mind however, all earnings are not created equal. Here are a few examples of low quality growth stocks: Lucent (LU); H & R Block (HRB); and Imax (IMAX). Bottom Line: trade out of low quality losers and into high quality winners.

The stocks we are looking for have to have high quality, sustainable earnings. Three things to look for: Stocks that don't have acquisitions in order to look profitable, the organic growth is the major focus here; look at stocks with dividends; and finally, look for stocks that have had recent buybacks. A sign of a stock's health is its ability to generate cash flow.

Here are three winners to like:
Pepsico (PEP)
United Tech (UTX)
3M (MMM)

These stocks have transparent earnings, dividends, buybacks currently in place, and have most importantly, legitimate, organic growth.
Panera Bread (PNRA) and Vornado (VNO) are also good plays. Cramer likes REIT's.

Lightning Round
Bulls:
Dow Chemicals (DOW)
Bunge (BG)
Santarus (SNTS)
Four Seasons (FS)
Peabody Energy (BTU)
Palomar Medical Technologies (PMTI)
Caterpillar (CAT)- buy as it goes to its 52 week low

Bears:
American Oriental (AOB)'
Harley Davidson (HDI)
China Yuchai (CYD)
ON Semiconductor (ONNN)- Doesn't like semiconductors
Ctrip.com (CTRP)
DR Horton (DHI)
All Home Builders
Colonial (CFX)
Intrawest Corp. (IDR)

Gold is the new king in the market eventhough it was down 14 today. Gold is still a risky play, however, where there is risk, there is reward. If you want to take a walk on the wild side and speculate a bit, Crystallex (KRY) would be a great call option. Otherwise, you should get in Yamana Gold inc. (AUY) homegamers. It is the cheapest gold stock and they have property in Brazil and Central America, regions rich with gold. By 2007, they are expected to mine 700,000 ounces of gold. They have a market cap of $1.87 billion, which isn't too shabby. Currently their price ended down .54 at 9.37 but up big in the after hour trading, up .43 to 9.80 after Cramer recommended it.

The market is extremely volatile, however start loving the volatility. You first need to understand the market, then trade off it. Volatility is a result of a supply and demand imbalance. There is no equilibrium between buying and selling. There are three primary reasons for this: There is a lack of positioning due to the raise in interest rates; Exchange Traded Funds (ETF's) are moving; and Hedge Funds are still demanding immediate satisfaction of orders. Bottom Line: understand volatility and it will help make a profit. Side note, you should buy in small increments.

You should be buying stocks that work in a volatile market. These stocks include strong companies that notoriously fluctuate. You need to be in companies are known for their heavy fluctuations during the week or even better each day. Some examples include: Occidental Petroleum (OXY), which gains the most out of any oil stock when oil rises but also loses the most when oil falls; Southern Copper (CPU); Pepsico (PEP); Sears Holdings (SHLD); United Technologies (UTX); Bank of America (BAC); Citigroup (C); Archer-Daniels-Midland (ADM); Nucor Corp (NUE); Alleghany Technologies (ATI); and Baker Hughes (BHI). The way to buy these stocks is to establish a core position of about 300 shares and once the stock rises, sell around 50 shares. Once it falls, buy back some more. You need to trade around your core position. Also, never day trade, it is not a smart way to play the current market.

Lightning Round
Bulls:
MasterCard (MA)
Newmont Mining (NEM)
Schering-Plough (SGP)
Las Vegas Sands (LVS)
Freeport Mcmoran (FCX)

Bears:
Home Solutions (HOM)
Clear Channel Communications (CCU)
Dell (DELL)
Sun Microsystems (SUNW)
Ecolab (ECL)
Forest Labs (FRX)
MGM Mirage (MGM)

Two power companies to watch include: NRG Energy Inc. (NRG), which Mirant (MIR) made an unsolicited bid to buy (NRG) out, and Dynegy Inc. (DYN), which has 12,800 megawatts of baseload.

Another company to watch is Crystallex (KRY). They are in the process of developing a gold deposit in Venezuela, which boasts to have the largest deposits in the world. Cramer thinks the stock has potential but would like them to get the approval on the deposit first.