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It’s all about management and its ability to execute, Cramer told viewers during Wednesday’s Mad Money. That’s what separates strong companies from the weak in this market. So forget about sector-based ETFs – investors should be buying CEOs.

So who are these top-performing firms? How about Research in Motion [RIMM  Loading...      ()   ], Apple [AAPL  Loading...      ()   ] and newly resurgent Palm [PALM  Loading...      ()   ]. They’re making the products that people want. Rivals Nokia[NOK  Loading...      ()   ]  and Motorola [MOT  Loading...      ()   ], who missed Q4 expectations Tuesday and suspended its dividend, do not.

Look at Clorox [CLX  Loading...      ()   ] and Colgate-Palmolive [CL  Loading...      ()   ], too. Both companies recently delivered great quarters, thanks to solid execution, and they look set to emerge from this recession stronger than their competitors. Kraft Foods and Sara Lee sell many of the same products, but returned none of the same results. Who’s to blame? Cramer said management.

The same trend is also taking place in the banks. Goldman Sachs [GS  Loading...      ()   ] is ready to pay off its TARP debt, while Citigroup [C  Loading...      ()   ] needs more money. So does Bank of America [BAC  Loading...      ()   ]. Morgan Stanley [MS  Loading...      ()   ] has a new business model – pure brokerage, while UBS [UBS  Loading...      ()   ], Cramer said, has no business model at all. That’s why Goldman and Morgan were up big Wednesday.

Biotech’s no different either. Abbott Labs [ABT  Loading...      ()   ] is returning double-digit growth as a result of innovation. The company released a new heart stent, and an anti-inflammatory franchise, Humira, is doing well. But what does Pfizer [PFE  Loading...      ()   ] do in order to grow? Buy Wyeth [WYE  Loading...      ()   ]. And let’s not forget that J&J cut its dividend in half, back on Jan. 26, in an attempt to raise money for the deal.

The good-versus-bad execution theme can be seen across the market – in oil, personal computers, manufacturing, any of the aforementioned sectors. And these poor performers are the reason we lost 122 Dow points today. So Cramer’s recommendation was to avoid these losers and stick with the winners who can execute. It’s a much better investment strategy than “playing it safe” with a broad-based exchange-trade fund.








Cramer's charitable trust owns Abbott Labs, Goldman Sachs and Morgan Stanley.

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