the 2013 lexus gs, with a dynamically tuned suspension and adjustable drive modes. because the ultimate expression of power is control. this is the pursuit of perfection. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now! hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm trying to save you money. my job is not just to teach but to entertain and coach you. call 1-800-743-cnbc. all right. sometimes this market, you know

what it's a lot like? it's a lot like baseball. say you have a man on, if you have a big lead off the bat. you would love to take 2nd base. you take your eye off the ball, the pitcher nails you. that was what was happening today until the dow rebounded at noon. of course, we are investing in stocks. we're not playing a game. but the analogy works because the people who lost money today were the ones who thought they were safe in stocks with good yields. they're in a similar position to a runner on first who just hit a single and didn't expect the pitcher, in this case the pitcher is the bond market, to be able to whirl around and nail them. you are complacent and confident one minute. then you are plain out the next. head down, walking to the dugout, kicking yourself, furious at yourself because you

thought you weren't vulnerable since you just arrived safely at first and didn't think you were exposed nearly as much as you turned out to be. that's what happened today and yesterday afternoon. for the last longest time i have been talking about saver's austerity. that's the process by which the federal reserve lowered interest rates down long enough to give borrowers unprecedented access to cheap money. we know, of course, only the most qualified borrowers were able to get loans from banks. we know you need a fico score of 750 to qualify for a bigger mortgage. we know that housing prices are coming back. a staggering figure that combined with the rising stock market has made people feel much wealthier, even though we are down from the 2006 high for homes, not stocks. hence, why we just saw these statistics yesterday showing

that americans are more confident about the future than any other time in the last five years. that's good news, too. it's all good news for the economy. it means people are spending more money on their homes, the price lessens the mortgage, we know from home depot owners are three times to spend money and improve their house than those underwater. given the average person spends $1,000 at home depot, you can see how bountiful is the when the mortgage rates come back to life, more are coming back to life every day. it means banks are more willing to lend to home buyers, because they know the collateral, the home itself, is increasing in value. at the same time, people have started opening their 401k statements, they're not afraid to look. they like what they see. it means they can be less tight fisted. less worried they will never be able to retire, in large part, because so much money has been forced into the market by

lowered returns on fixed income, bonds kept down specifically by ben bernanke in order to get this exact wealth effect i just described going. he predicted correctly, i might add, the shadow inventory on homes will be worked off. they're almost gone now. he knew we built so few homes vs. the demand that we ought to have a housing shortage, which is accident happened when the combined homes built in 2009, 2010, 2011, barely equals half the ones we had in 1960. we are an pace to have 200,000 homes this year. i would say we need two million, another goal of bernanke, his goal is to promote job growth. a lot of people benefit when housing roars back, including the people who build those homes. but all this good news comes at a cost. not one i've emphasized in this show. i like a buoyant stock market.

cost is on the ones, the ones who bear it are the savers. typically, have not worried because as ben bernanke said over and over again, it's great to save. if you don't have a job, what does it matter? the savers, people who have nothing to show for their investments, if they chose to stay in fixed income assets, which have historically have been the prudent places to be. they're the ones hurting. it is not prudent to earn nothing on your money. i will tell you about those who can't survive on a 1.5% certificate of deposit. that is the going rate for a cd or .81% if you want to go daring. they are the ones penalized for staying cautious. that is saver austerity i'm talking about. that's what i'm trying to get in your mind. because there are so many austerity savers who need the reach for income. it was only natural they gravitated toward higher risk bonds or bond funds that gave you even bigger pickup or ultimately, the stock market. particularly, the part of the

stock market that offers the highest yields for what is perceived, not actually, but perceived to be the least risk. the utility, investment trust. some ventured to higher yielding common stocks with much more risk like the drugs or the food names that used to yield 3-4% before they skyrocket. we consider these bond market equivalents. they also had more risk because the stock market gave us no guarantees you'd get your money back. as these rallied and rallied, their yields shrank, they became the equivalent of something too risky. most of these picked off savers, they weren't trying to hit home runs. they weren't going for the fences, far from it. they didn't expect to be called out as they have been here. they just thought, hey, listen, we can bunt, get on, run, get a single. that's all they were trying to do is get on base with income instead of striking out with cds or sitting in the dugout with bonds, getting almost no return

at all. oh, it was a terrific strategy as long as the bond market competition, consider him the pitcher on the pound, didn't attempt to pick you off with a sudden jolt up in rates. consider that pickoff move. it's been so great and the federal reserve has been so adamant that it wasn't going to let the pitcher fool you that an amazing complacency set in. no one can blame you. that complacency ended yesterday with a sudden, almost violent move in bonds that seemed as unexpected to the base runner as i have ever seen. those who thought thai they were playing safe found themselves shamefully headed back to the dugout. yes, the pickoffs continued today, with the drugs, the foods the consumer stocks, as hard hit as the electric utilities and reits and master partnerships. perhaps worst hit are those savers buying bonds, like recently issued apple bonds, they're paying a couple percent. those fell a quick 8 points from 192. just like a stock. it's brutal.

so, what do do you now? first, we don't know if the pickoffs are done. will rates continue to rise, thereby nailing anyone still on first base, are they going to be steady and therefore they have fallen enough to give you a safer return. the next move depends on whether the economy is getting stronger. if we get lower unemployment claims, then no yielding seeking base runners will be safe. i don't want to bet against it. the economy is producing more good data. we can't afford to stay complacent, even as i don't expect all the macro-data to be as strong as housing. you are not paid enough to take a risk of taking a lead off first base. we certainly aren't in shape to steal second. you the take your single and go home for now until interest rates and stock yields have gone so high that it's, once again, safe to hang out on first. think about it like this, if you are in a stock solely for the

yield, that stock is a candidate for sale on any bounce tomorrow. if there is more to it, then hold on. you'll be fine. here's the bottom line, it is not worth being picked off here by a bond market that's got you leaning the wrong way. take some profits on those once higher yielding stocks. it isn't so good anymore. you can get in lower. sure, you want income. it just isn't worth the reach given the stretch valuations and yields, much smaller than they were that can be quickly wiped out by a couple of percentage points declines in the stock market prices. stay in the dugout. your return to hit singles will come around much sooner than you think. bill in virginia. bill! >> caller: hello, jim. it's good to speak to you. >> same, bill. >> caller: i would like to give you and katy a virginia tech boo-yah. >> bob: hey, listen, brian

sullivan actually had the mayor of smithfield, the town on his show. that guy makes a lot of calls. what's up? >> caller: okay. my question is, in light of the recent good economic as well as good auto sales news, ford is having a great run. but at what price could you consider ford to be overvalued? >> i recommended $4 to $18 in january, 2011. europe fell apart and the stock got cut in half. i think when it gets to 18 again we will relook. right now, my charitable trust is buying for it. why? because if europe is bottoming, the amazing f-150 is selling like mad, that means higher margins, higher dividends, higher stock prices. tom in florida, tom! >> caller: a warm florida booyah to you, jim, from the gator nation. >> love the gators. let's not slight the noles.

>> caller: of course not. my question is about smithfield foods. with the buyout announcement made and the subsequent move in the price of the stock today, is there any money left to be made in this trade or is there another name that you like? >> this is a great question. david faber and i spoke on my morning show "squawk on the street," i directly questioned them and said, don't you think there will be a higher bid? he did indicate there may be other bidders. when i hear that, i think a higher bid will come, but we're not greedy, sell half tomorrow morning. for the love of the game, you know we are at one of those moments you can stay on the bag, go back to the dugout, until the rick is on your side. it's just not worth it being picked off right now by that bond market. i know, i know a lot of people are saying, don't worry. you know what, i said, don't worry for the last 8,000 dow points. me, i'm a little concerned. let's just see what the bond market does. stay with cramer. coming up, strong as steel?

industry is beginning to heat up in the u.s. and tonight cramer has an exclusive look inside. from questions on our aging infrastructure to how natural gas is changing our manufacturing future. don't miss this interview with an industry veteran. and later, finding cover. the market isn't the only thing under attack. the sequester threatened to force a retreat in the defense sector. but some of the industry continues to march past the market. can they soldiering coming on? don't miss what's on cramer's radar. just ahead. all coming up on mad money. don't miss a second of "mad money," follow, @jimcramer on twitter. have a question, tweet cramer, hashtag madtweets. send jim an e-mail on "mad money"@cnbc.com of give us a call at 1-800-743-cnbc.

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all year i have been talking about the north american energy revolution. the natural gas the last three years can transform our economy and transform it for the better. when i saw the chairman of nucor the big steel-maker wrote last month how his company is using cheap domestic gas for the kind of iron used in steel production in america. nucor has a partnership with encana to drill their own natural gas well to insure supply of the stuff of the supply for decades to come. i have been telling you it will make the united states a more attractive place to operate for all sorts of industrial companies. it now includes $100 billion worth of new industrial projects and planned projects that can be thwarted if the company allows more facilities for liquifying and exporting our natural gas to other countries. he thinks it makes sense to keep prices low domestically like every part of the country. rather than exporting this stuff at a higher price.

regular viewers know we made transport stocks. i still think it's a shame that we aren't making more use of this cheaper, cleaner fuel here at home. so let's check in with the executive chairman of nucor to hear more about this natural gas resurgence and renaissance. >> hey, my friend. >> it's been too long. you are doing amazing things. i want to talk about new technology, why it works here versus building elsewhere. >> well, you know, there is nothing better than new technologies, game changing technologies come along. what's happened with fracking and horizontal drilling is nothing short of a game changing event for this country, our energy situation and domestic manufacturing and a resurgence in it. what we are building in louisiana is a direct reduced iron plant. we have one in trinidad. we moved it from louisiana back

in 2000 because we can get $2 natural gas down there and we're happy as can be that we are building our next one here in the united states, but to insure that that direct reduced iron will give us the cost benefits we are looking for, somewhere around $80 to $100 a ton over our competition. we needed to make sure we had a long-term stable low cost natural gas supply. that's where the partnership with encana comes in. the beauty of this partnership is that we are not putting $3 billion up front to buy the rights. what we do have a is a pay as you go capital investment joint venture with them where we will be investing somewhere between $250 and $350 million a year at peak production around 2017, be producing somewhere in excess of 125 billion cubic feet per year of natural gas, of which we will

use all of that if we build four dri plants. we are currently building one with accommodations for a second. this truly is a major event because you are looking at 100 billion dollars of expansions and existing operations to take advantage of this low cost natural gas supply. this is big stuff. >> but, dan, i know it's big stuff but let's take the other side for a second. what happens if we have so much natural gas in this country that a few plants that export wouldn't necessarily hurt the supply/demand situation? >> well, listen, we're not against exports. we're against extreme exports. i mean, there is 20 projects that people have applied for. we haven't even started to reap the benefits ourselves yet. people want to export 40% of our production. that's what we're against. we're not against exporting 10%, 15% of our production. but here's the facts, charles

river associates just completed a study where if you take natural gas and use it to create manufacturing jobs, which is what that 100 plus billion dollars is going for, you create twice the direct economic value to our economy as does liquified natural gas exports of an equivalent amount. not only that, but you create eight times the number of jobs. this is a no-brainer, okay. this is where we should be using this for comparative advantage, not exporting that advantage around the world. we're not against exporting. exports are going to take place. but we are against excessive exports and undermining the renaissance of manufacturing that it's going to drive. >> fair enough. we are big supporters of cheniere. they are first movers. they deserve that advantage. yes, i agree with you.

mr. suki is talking 2 to 3 of export. i think you can live with that. not a problem. now, what i need to understand from you is whether we will ever use natural gas for anything other than industrial purposes. the way you are describing it, we should be able to harness surface fuel for vehicles at $2 and natural gas we would take over the world with that. >> well, natural gas will probably be a little more expensive than $2, but it's not going to be the excessive numbers we've seen in the past and the wide swings up into the teens. you will probably see natural gas somewhere between $3 and $5 for some time to come. that will allow us to do a lot of great things. there are still some skeptics out there. i sit on the board of duke energy. the utilities in this country have been burned before by jumping into natural gas and then having prices go through the roof because supplies dwindled. that's not the case today.

today we have a permanent, i.e. 100-plus year supply of low-cost abundant natural gas that's going to drive power generation to natural gas, manufacturing and chemicals and fertilizer and steel-making and other energy intensive industries, and it will start to have an impact on transportation. you know that the burlington northern and other railroads are looking at using natural gas to fire their locomotives instead of diesel. the trucking industry, t. boone has been a big proponent of that. he's right. for some time, infrastructure build will take place that will support its use in other forms of transportation and it will be a big, big positive for our energy independence, and keep in mind the best way to achieve energy independence is not to have a net export/import of zero.

the best thing is not to import anything and have all of our energy needs being supplied from home. that's not going to happen. but we can get pretty darn close with only the exports coming in from our friends in mexico and canada. >> in the meantime people are saying the economy is coming back. i go through your utilization and steel and the commercial business, real estate investment business. it ain't happening. if anyone thinks the interest rates should sky high, i am seeing from you and your company there is still not enough business. >> all right. there is a serious disconnect between what we see and wall street as an example and in some manufacturing sectors and nonresidential, even residential construction. very slow recovery from a very deep downturn. it's taking place, but much, much too slowly. i mean, if you have gdp growing at 2% or less, you are not going to get a lot of construction going on. you know, our government has missed the boat. five years ago, we should have

started a massive spend on infrastructure, which is a major investment that would have paid itself back as opposed to being wasted like some of it has been. i'm talking about real infrastructure, not talking points, electioneering. you know, we've got a $2.5 to $3 trillion hole to fill, not a $50 billion hole. let's get real in washington. let's find ways to pay for it. don't increase our debt. there is a lot of interest on the private sector to support funding, but the economy has not provided the kind of growth in the construction sector that we would normally see at this point. it probably won't. we probably won't see a strong market for another year or two. >> yeah, thank you, dan. dan, you have always come on the show and told the truth. you have done it again. chairman of nucor. thank you for coming on. >> thank you. >> industrial renaissance, incredible opportunities. one of the reasons i remain bullish on america. dan knows.

i got to tell you, his comments about steel, wow, we still got a lot more work to do in this country. stay with cramer. coming up, finding cover. the market isn't the only thing under attack. the sequester threatened to force a retreat in the defense sector, but some of the industry continues to march past the market. can they keep soldiering on? don't miss what's on cramer's radar just ahead. plus, dirty laundry? there is a battle brewing in the aisles you frequent. some of these brands may succeed. cramer has his eye on one company that may begin to struggle. stick around and make sure this company is not in your cart.

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♪ it's a day where stocks got slammed. it is worth taking a moment to remember that is market is doing much better than anyone expected six months ago. some groups are doing so well it's almost unbelievable including sectors that just about everybody believed were going to get pulverized not that long ago. take the miraculous rally in the defense contractors. i say miraculous because these stocks were supposed to keel over and die once the sequester went into effect with its allegedly huge cuts to military spending.

rather than going down the defense names are going higher. lockheed martin, boeing with substantial defense biz. 31% since the beginning of 2013. out of that 787 thing. what the heck is going on here? these companies are all highly dependent on spending from the u.s. government. [ music playing ] pretty much everybody in the world of politics, both democrats and republicans told us the sequestration would mean huge cuts in the defense budget. am i missing something? when the sequester became a reality, it mandated $487 billion in cuts, that's an 8% deduction from previous budgets. that's over a ten-year period. we're talking nearly a half a trillion with a t, dollars taken away from the pentagon. that's why so many sold the defense stocks in november when the elections began to say the fiscal cliff was a serious issue. they were terrified the politicians would allow the cuts and sequester to happen, unbelievable.

it turns out, their fears came true. sequestration went into effect four months ago. the worst happened, yet the defense stocks have been roaring. this is a fabulous bull market. so we need to ask ourselves, how is that possible. more important, can it continue? first of all, as time goes on, it looks like our sequester worries were blown out of proportion. this is a case where the analysts got way too negative. they got spooked by congress and spooked investors exactly at what turned out to be the wrong time. thee sequestration cuts supposed to happen are the law of the land on paper, but in reality the government has been slow to cut the defense spending and pushed the decisions to the end of the year. lockheed martin told us, this is a good company, that the government has not yet informed them, not yet informed them of specific decisions taken in response to sequestration except

in very limited circumstances. in other words, the pentagon is dragging its heels delaying spending cuts until 2014. so what? even if the government is kicking the can down the road, doesn't that mean they are doomed to get pounded? not so fast. the longer these defense cuts are pushed down, the better the chance they'll never happen. you have to understand the way this process works, and i learned about it doing this piece. very few people in washington want these defense cuts to go into effect. democrats and republicans. the president and congress can pass a budget for 2014 or a supplemental defense budget. that trumps the sequester. the budget president obama proposed for next year reverses the sequester. even though that budget is a starting point for negotiations and washington is proven to be incredible dysfunctional lately, the fact is there is a good chance they outlie the sequester may never come to pass. plus, we got this quadrennial defense review coming up this summer.

hey, that's this big analysis the government does every four years. it's like having a major impact on where the pentagon's money actually goes for years to come, again, minimizing the sequester. but even if you are bearish on but even if you are bearish on the whole situation, even if you believe the defense cuts have only been postponed, not prevented, it's still not the end of the world for the larger defense contractors like lockheed martin, boeing and raytheon. in boeing's case they have a terrific commercial business that is just roaring in year two of its cycle. the big one, northrup grumman, last month, they announced an 11% dividend boost, along with a massive buyback that will allow the company to retire a quarter of its outstanding shares through 2015. i did not believe this when i first saw it. i said a quarter, i had to read it over again, that's extraordinary. i cannot recall any buyback that

big in such a short period of time. this is a company that gets the majority of its sales from the u.s. government, mainly the defense department. it's exactly the kind of business people were scared will be cut by the sequestration, which is why they sold it and shorted it. now, citigroup upgraded this morning, pointing to the titanic buyback and the fact that the company is shifting its business towards more international orders and more procurement contracts, which typically bring in higher margins. predicting what the government can go next is tricky. whatever happens, it's not too bad to buy northrop grumman. they have the cash. the buyback is staggering to me. listen, i like lockheed martin, too. they posted a 29 cents earnings beat on a report five weeks ago. what a quarter. while i am concerned about higher yielding stocks in general, one that's cheap like lockheed martin, it doesn't

bother me, northrop grumman is better. i like boeing. it has a big offset. >> the house of pain. >> no. >> house of pleasure. >> especially with the orders for the 787s taking off here. the ceo is a great man. the war in afghanistan is winding down. i'd be more cautious about the smaller players, the textrons. they are less diversified, more important, they have less political clout than the big boys do. the bottom line is this. this run in the defense stocks as improbable as it seems, the sequester cuts are supposed to cause a lot of pain, haven't happened yet. might not happen at all. i think northrop grumman with its gigantic buyback are worth

owning right here even if washington can't get its act together and pass a budget that trumps the sequester. it's incredible. this is the kind of power that i come to expect from this stock market. chris in arizona. chris. >> caller: yes, boo-yah, jim, honeywell, current run in price. do you think there is any possibility for a stock split? >> when we think of honeywell the ceo, we think of dave cote. that stock goes to 75, 76. i never close my eyes and buy anything but, buy, buy, buy, regardless of a split. jim in virginia. jim! >> caller: boo-yah, jim from the great state of northern virginia. i am calling you about a stock i provided my granddaughter so she can learn about the markets and this firm. company is the largest independent denier and manufacturer of aero structures in the world supplying boeing and airbus, a real sweet spot. what do you think of spirit aero

systems? >> i like it. i remember when it spun off from wichita. it's a terrific company. i will tell you if you want both airbus and boeing, i'm going to send you back to what a previous caller said you didn't hear is honeywell. i think it represents better value. spirit i would never tell you to sell. go to greg in missouri. greg. >> caller: yes, yes. >> hit me. go ahead, greg, you are up. >> caller: yeah, i'm here. >> okay. good, why don't we talk stocks? >> caller: okay. jim, i want to thank you for your market expertise. it's a great help. >> thank you. >> caller: my stock is erickson air crane, ticker symbol eac. any price below $25 means i lose out of pocket capital. unfortunately, i have all my eggs in one basket. jim, should i sell or hold? >> well, it doesn't matter how good it is, we could be talking about the greatest stocks since stroehman's sliced bread.

you cannot put your eggs in one basket. i do like ericson, it's down too much since it came on the show. no more than 25% on this one stock. we are too old. you and i are too old to play that game. cut it back. if you find yourself thinking what the heck, we got to dig deeper. this rally and defense contractors in the face of the sequester, well, let's just say it makes a ton of sense because it hasn't even kicked in. northrop grumman is the best of the group. stay with cramer.

it is time! it's time for the lightning round. i tell you whether to buy, buy, buy, or sell, sell, sell. when you hear this sound, then the lightning round is over. are you ready, skeedaddy? let's start with brad in new york. brad. >> caller: hey, how are you doing, jimmy?

>> couldn't be better. >> caller: i have a question about nq mobile and your thoughts on it. >> you are way too speculative. i have problems with verizon, i say, don't buy. let's go to robbie in hawaii. >> caller: aloha from hawaii. my holding from federal realty. >> i love tom wood, there were stocks that used to give me a good yield. you go to the wait for higher yield, 3.5% and you can pull the trigger. chuck in florida. chuck! >> caller: boo-yah, jim. >> boo-yah. >> caller: from south florida. neurocine biosciences. >> it's a spec, it's really a dice roll spec. gerard in south carolina. >> caller: hey, from hilton head, south carolina.

>> i played golf there, ruined the whole course, what's up? >> caller: nly traded today. >> we can't own these stocks. we don't know what they own. we know the whole bond market is being convulsed and the kinds of and agnc. they're too hard. they can be poorly positioned. let's not reach for a yield. albert in arkansas, razorback. come on. yo-yo. >> caller: hey, jim. >> speak to me. you are up. >> caller: hey, jim. >> yeah. >> caller: all right. albert in arkansas. >> i had a feeling. what's up? >> caller: pretty good. i'm trying to figure out what's going on with cvr partners, should i buy, sell or hold? >> it's a fertilizer company where a lot of people are worried about the agricultural market. i, myself, feel that it's at the right level. i am going to say that you can buy. i'm taking one more. arlene in california.

>> caller: hi, jim, how are you? >> how about you, arlene? >> caller: about the pending merger of sprint/nextel and softbank. do i stay and buy? >> i like sprint. dan hesse, he'd be the man. that, ladies and gentlemen, is the conclusion of the lightning round!

a down day. only one day after an all time high for the dow and another up tuesday. home prices are rebounding. despite the good news, we were in the red today. it goes to show you that now is not the time to be lazy. you need to dig in your heels preparing for days like this. let's put your picks to the test on tonight's round of

am i diversified? if you owned those good stocks so good so long, you got crushed. that was not being diversified, call me or tweet me @jimcramer. i didn't tweet that much, i was with my kids. maybe you need to mix it up a little. why don't we start with a tweet from heinric_thuren who tweets am i diversified? boo-yah to you right back at you sunshine. here we go. northern tier, that dividend has got to be way too large. oil, sysco provides restaurants with food, waste management, verizon, a high-yielder, got to get higher, ben doing a good job. aig, restaurant, oil, you know what, thuren's got it going. okay. now let's go to brian in

connecticut. brian. >> caller: boo-yah, mr. cramer. i've got a portfolio. i have two concerns about this. the first stock is gld, jcp, j.c. penney, nordic american tanker, markwest and seagate stx. my first concern is jcp and nordic american tanker. >> i will go over those. do a little qualitative here. what you got here is high yielders in nordic american tanker, that yield is high because the stock has dropped. markwest high yield, it's gone up too far. you have oil, tanker, gold, you got tech and you got retail. j.c. penney's has enough money to last this year, so i'm not that worried. markwest, mr. semple seems like a strong story.

nordic american i am worried about. i know, holy cow, gold i prefer gold coins. diversified with tech retail, oil, shipping and the gold shares. gas, oil, a pipeline company, i'm going to say that's different enough from nordic american. lawrence in st. thomas, lawrence. >> caller: yeah, hi, how are you? i'm a big fan of your program. i appreciate all you do. i have read getting back to even so many times i've worn the pages out. >> holy cow, that deep in the money options, many thought that was too hard. >> caller: i really appreciate all you do. i have several stocks i wanted to mention. i have nation star mortgage. gilead, gild, sbux, starbucks. tol, toll, tjx for t.j. maxx. >> let's see, interesting, interesting names. okay. we got, this is a banking play.

i was thinking national semiconductor. it's a mortgage, toll brothers, housing play, a problem there. gilead the great biotech. tjx. starbucks, we got to get a health care company. we have health care. let's get an industrial in here and let's sell nation star mortgage, ring the register there. we'll bring in, let me see, what do i want there? why don't we bring in a technology company? i'm going to say, you know what, homage to david faber, i'm going to recommend hewlett packard. can you believe it? hewlett packard. i just said it. that's because of the dell deal. the dell deal will make it so hp is king again. that's a nod to david faber. thank you all for playing am i diversified?

you want a good, long short pairs trade like the hedge funds are talking about? a combination of something you want to sell short, a stock bet against something you should buy, another stock. how about selling the stock of procter & gamble. now that the company let ceo bob mcdonald go and replaced him with his predecessor, and then buying a similar package player to hedge the short out. this is all about execution.

you are making a bet one company will perform better than the other regardless of the overall sector. that's the hedge. when it comes to execution, i was initially no fan of bob mcdonald when he came to the job. i thought even though mcdonald had a terrific reputation as a brand manager, particularly in china, he was failing to take the tough action needed to insure his company has a place in the global world. in fact, at the beginning of last year, i put mcdonald on the "mad money" wall of shame because of his failure to deliver growth and the open rebellion of the analyst calls, they were an excruciating affair. last summer, he had some reorganizations that allowed proctor to take out $10 billion in costs. much of these savings came from trimming the fat that mcdonald's predecessor, a.g. laffly allowed to develop. in the mid-60s it appeared mcdonald hasn't been dealt the treasured hand that wall street

thought laply had given him. there were many leaders and divisions to fall behind. the lag was followed by a worldwide boom. i wasn't dismissive in the not taking the actions that proctor needed. i didn't dismiss him. he didn't do it himself. he convinced me i should take him off the wall of shame before everyone else realized he revitalized p and g, particularly hair care which had become a lagging care and deter gent, i got behind mcdonald big, recommending proctor at 65. next thing it went to 68. it was true if the last quarter was not off to snuff, however, the stock was roaring at the time. i thought mcdonald earned the benefit of the doubt for at least nother year. last thursday, we find out mcdonald is out and laffly is back in.

i don't want you to short procter & gamble outright in case the packaged goods take off if rates go back down. kimberly clark plummeted five points. that's a candidate to the hedge for certain. i like colgate more than proctor. another hedge, i recommend laffly, the three point jump would have only made sense if he had been relieved before the tough restructuring kicked in, in the 60s. after, it make no sense at all to me. even though that move has been repealed, i would us the misplaced euphoria, because despite mcdonald's herculean efforts, they weren't able to catch up to colgate and unilever, although it would have in months. the market wants to rotate out of the consumer package goods into more industrial financials

that do better with real world growth coming back. that kind of rotation has been a time honored investment strategy. i embrace it. why not exit or short proctor again unilever or colgate or kimberly even if you think the world of laffly. there are better fish to fry and better toothpaste and soaps and diapers to own. stay with cramer. you hurt my feelings, todd. i did? when visa signature asked everybody what upgraded experiences really mattered... you suggested luxury car service instead of "strength training with patrick willis." come on todd! flap them chicken wings. [ grunts ] well, i travel a lot and umm... [ male announcer ] at visa signature, every upgraded experience comes from listening to our cardholders. visa signature.

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only at hotels.com >> with the big utility deal after the close, i like to say i like bull markets. i'm jim cramer on "mad money," i will see you tomorrow! richard marin scrushy, the visionary behind "healthsouth." >> richard is-- uh, at once the american dream and the american nightmare. he's horatio alger gone mad. >> he's a superstar ceo. >> we had a lot of energy. we had a lot of spirit. we had a lot of desire, a lot of vision, a lot of hope. >> a nashville wannabe. and when federal prosecutors accuse him of masterminding a $ 2.7 billion fraud, the singing ceo becomes a tv preacher. >> the only way we're going to stand perfect before god is being washed in the blood of the perfect lamb. >> it's a tale of rags, riches,