Cramer Remix: How to win if oil goes lower
Jim Cramer has been waiting for deals in the oil patch. Stocks are drifting down with attractive assets, yet they still sell for only a fraction of what they once did.
Where the heck are all the opportunistic buyers who were supposed to be waiting in the wings?
"The answer: they aren't waiting. They simply don't care," the "Mad Money" host said.
Cramer spoke with outgoing CEO of Occidental Petroleum Steve Chazen on CNBC's "Squawk on the Street" on Monday, and he felt Chazen described it best.
The first issue is that the asset quality of most companies are poor.
"They have break evens maybe at $80 oil," Chazen said. "Nobody needs to pay for $80 break-even oil properties."
Chazen also said that the down-and-out oil companies have lousy balance sheets, and noted that most management believes that it will be OK in six months if they can just survive. And that just won't happen, Cramer said.
With this in mind, Cramer recommended investors not speculate on broken-down oil stocks, as there will most likely be no buyers. Go for the highest quality names.
"That way you can win even if oil doesn't go higher, and that's the best calculated risk in the entire oil and gas complex," Cramer said.
Investing is difficult; everyone can't just make money easily owning stocks. Why? Jim Cramer points to risk.
"It is the risk that something might change, something fundamental that upsets the apple cart of investing," the "Mad Money" host said.
Tuesday displayed another kind of risk, government risk, which Cramer said is the most painful of all because it can completely obliterate ones capital like no other kind of risk.
"I am focusing on these incalculable hazards because I don't want you — ever — to think that investing is too easy," Cramer said. (Tweet This)
Read More Cramer: Is the government's power worrisome?
Under the leadership of CEO Steve Easterbrook , McDonald's (NYSE: MCD) has been taking share in the fast food industry. Cramer has watched as one competitor stock after another has been hammered — just take one look at Jack in the Box (NASDAQ: JACK).
But one burger chain doesn't seem to be feeling the pain at all — Sonic Corporation (NASDAQ: SONC).
Despite the fact that Sonic sells many of the same core items as McDonald's, Sonic managed to report an extremely impressive quarter last week.
"In an industry where virtually every player seems like a victim of McDonald's, we saw no signs of victimization in Sonic's numbers," the "Mad Money" host said.
Read More Cramer: One player McDonald's hasn't dominated
Looking back at the long-term charts, biotech stocks have had a strong multiyear run. That run came to a sudden halt last summer, and since then the biotechs have been in free fall. This begged the question to Cramer: have these stocks finally been punished enough?
Pharma was in the blast zone on Tuesday, when new tax-inversion rules raised doubts about a deal between Allergan (NYSE: AGN) and Pfizer (NYSE: PFE).
To gain clarity on the future of biotech, Cramer spoke with Carolyn Boroden, a technician and colleague of Cramer's at RealMoney.com. She saw major signs that the vicious correction for biotech has finally come to an end.
She started by looking at the weekly chart of the iShares Nasdaq biotechnology ETF, IBB (NASDAQ: IBB). Boroden found that the downside pattern appears to have terminated, with IBB trading sideways since early February.
Read More Cramer: Hope for biotech in the blast zone
Another stock on Cramer's radar on Tuesday was the polarization of Paypal. Ever since it was spun off by eBay nine months ago, it has become one of the most divisive stocks on Wall Street, with both haters and supporters.
The chief hater out there was Gene Munster, the influential tech analyst at Piper Jaffray. From the beginning, Cramer thinks he judged Paypal through the lens of a tech company, decided he didn't like it, and then slapped a sell on it.
"There is one very loud negative voice who accidentally nailed the stock's trajectory right out of the gate, and he is perhaps taken more seriously on the name than he should be," Cramer said.
Cramer thinks Paypal is one of the most misunderstood stories out there, and at the end of the day, its strong fundamentals will triumph and the stock will head higher.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Starbucks: "I like the fact that they are doing that roastery in New York, although it is far away. I think Starbucks is good, my charitable trust owns it. We want to buy some below $55."
Teleflex: "I like Teleflex, why? Because Teleflex is literally almost around the corner from where I grew up. A medical device company with a lot of good products, single-use. That is the great formula for making money."
Read More Lightning Round: Great formula for making money
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