Cramer's 'Mad Money' Recap: A Resting Bull Market
NEW YORK ( TheStreet) -- Even the strongest of bulls have to rest eventually, Jim Cramer told "Mad Money" viewers Wednesday. He once again urged them not to jump into the markets during what is now the longest consecutive-day rally since November 1996.
Cramer said a lot of things have changed since 1996, back when dial-up Internet and low-cost brokers were democratizing the stock market and making it accessible for everyone. Back then was the golden age of investing, Cramer recounted, with the markets having little to worry about except gridlock in Washington.
But in today's markets, investors have been conditioned to worry, said Cramer, even though stocks are cheaper now than the were back in 1996, while taxes are actually lower now than they were in 1996. Stocks are so cheap, and companies so brimming with cash, that it's easy to see why there have been so many takeovers, mergers, dividend boosts and stock buybacks.
Cramer said there's a reason why today's retail sales number were so strong -- it's because of the wealth effect created by a rising stock market, rising home prices and increased job stability. Add those together and consumers simply spend more.
Cramer concluded by saying investors can still make a lot of money in the markets, but they can't own stocks making all-time highs after a nine day rally. Instead, they should be looking at the laggards in tech and the financials, which are still far from their highs and are cheap by any metric.
Executive Decision: Ben Baldanza
In the "Executive Decision" segment, Cramer spoke with Ben Baldanza, president and CEO of Spirit Airlines (SAVE) , a no-frills airline that trades at a scant 11 times earnings despite being profitable every year since 2007.
Baldanza explained that Spirit caters to price-sensitive customers who have an eye for value. He said the airline views fees more like options when you buy a car in that some customers choose to pay extra for a better experience while others may prefer just the basics. Using that model, he said, some customers can opt to pay more but others will not have to subsidize their neighbors' tickets by paying extra fees.
Baldanza also said Spirit is one of the few airlines that's actually run like a business. He said the company has good margins and is profitable in every city it services.
When asked how industry consolidation affects Spirit's operations, Baldanza said consolidation has stabilized the airline industry by reducing over-capacity and eliminating some of the most cut-throat competition, allowing for all the airlines to run their businesses better and more profitably.
Cramer said that after endorsing airline stocks for the first time in decades last week, Spirit is one of the best picks in this re-emerging industry.