Cramer's 'Mad Money' Recap: Market Rotation On (Final)
(Story updated to add Cramer's Lightning Round picks, his interview with the head of First Horizon National and his concluding remarks.)
He explained that when bad news hits one sector, the money simply rotates into another, as the bulls simply cannot be stopped. Cramer said this rotation action is a fairly new phenomenon. Last year when the market received bad news, investors headed for the hills. But so far this year, bad news has been sending investors into different sectors instead of heading for the exits.
Case in point, today's continued worries over a slowdown in China. Cramer said once again, any stock levered to China got hit and hit hard. Whether it was machinery companies like Caterpillar (CAT) or the rails or the mining stocks, if a company had even an inkling of Chinese exposure, its shares traded lower.
But at the same time investors were hitting the sell button on China, they were also buying tech stocks, noted Cramer. He said stocks like IBM (IBM) and Intel (INTC) traded higher and some like Western Digitial (WDC) were even near their 52-week highs.
Cramer said while hedge fund managers fret over China and the falling price of oil, he would be a buyer of oil stocks, since the world still cannot find enough of the precious commodity and there' no way America will wean itself from foreign oil without embracing its own domestic natural gas.
"This rotation is not over," Cramer concluded, as he told viewers to take advantage of the opportunities the markets are creating.
Brighter Oil Outlook
In the "Executive Decision" segment, Cramer sat down with Chip Johnson, president and CEO of Carrizo Oil & Gas (CRZO) , whose stock was hammered down 5% today, despite a increase by the company in its oil production by 300% over the past year.
Johnson responded to a recent report that valued the Carizzo's assets in the Eagle Ford shale region of the country higher than the current value of the entire company by saying that it will soon become obvious to investors that Carrizo is becoming a very lucrative oil company.
He said that Carrizo has discovered that putting its wells closer together is not diminishing output and is effectively doubling the company's assets. Johnson said by the end of 2012, nearly 80% of Carrizo's revenues will be coming from oil instead of natural gas.