Cramer's 'Mad Money' Recap: Caution's Cost
NEW YORK ( TheStreet) -- Just because stocks were expensive five years ago doesn't mean they're expensive today.
Jim Cramer told "Mad Money" viewers Tuesday that bears believe that as the markets approach their all-time highs of five years ago, bad things could happen all over again.
Cramer said it's prudent to be cautious if you're a parent, for example, because there's no downside for warning your kids too many times about drinking and driving or hanging out with the wrong crowd. But investing is different, he said, because being too cautious can cost you a lot money.
Shares of Apple (AAPL) , a stock Cramer owns for his charitable trust, Action Alerts PLUS, were being extra cautious today.
The stock fell by 14 points on fears that a full-fledged correction was taking hold. But those fears turned out to be unwarranted and the stock rallied 12 points off its lows. "Those are 12 points I want for my portfolio," Cramer said.
Inaction has a cost, Cramer reminded viewers. Just because some stocks were expensive five years ago doesn't mean they all were. Besides, he said, it's more important to care about what a stock will be worth three years from now, not where it was five years ago. The prospects for individual businesses are what matters, not where some arbitrary average was in the past.
In the "Executive Decision" segment, Cramer spoke with Gary Rodkin, CEO of ConAgra Foods (CAG) , the food giant that surprised Wall Street with an earnings beat of 9 cents a share on a 6.7% rise in revenue. The company also offered upside guidance and boosted its dividend to 3.6%. Shares on ConAgra are up 60% since Cramer last spoke with Rodkin in July 2009.
Rodkin said that after a tough year for commodity cost inflation, costs have moderated more than expected, allowing ConAgra to deliver such great results. He said his company is now aligned to be proactive, with an emphasis on productivity that's really working for them.
Among the company's strengths is its Healthy Choice brand of frozen products. Rodkin said the Food and Drug Administration regulates what can be called "healthy" on the label, which means that all Healthy Choice products exceed those standards for calories, fat and sodium content. Healthy Choice provides both taste and nutrition, he said, and its new packaging, including steamers and smart trays for baked items, are a big hit with consumers.
Rodkin explained that ConAgra's recipe for success includes building on its core competencies, being the fastest-growing private-label brand and doubling the company's international exposure, three things it is well on its way to achieving.