Cramer: What the Big Money's Buying

How soon the market forgets?

That’s what Cramer was wondering during Monday’s Mad Money. It seems like just days ago we got a rather disappointing jobs number, signaling a still-troubled economy. In fact, it was just days ago – Friday – but the Dow soared 112 points today regardless. Apparently stocks are still attractive to at least one key group of investors.

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Yet again, big money was the force at work here, Cramer said. These fund managers aren’t paid to sit on their cash, they’re job is to put it to work. And they’ll do so by using the best asset class available at anytime – stocks, Treasurys, private equity, gold and real estate. Right now stocks have the most to offer.

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With so little inflation and a heckuva lot of uncertainty, Treasurys have become too expensive. Investors who want a cash payout are better off buying Kinder Morgan Energy Partners for its 7.8% dividend yield, Cramer said, or AT&T , Boeing and Procter & Gamble , which carry yields of 6.1%, 3.2% and 3.1%, respectively. And these stocks have the potential to appreciate in value, whether through share price or a boosted dividend, while Treasurys just don’t, at least not in this environment.

If Treasurys are expensive, then corporate bonds are “astronomically expensive,” Cramer said, pointing to Diamond Offshore’s recent sale of 30-year notes at 5.7%. At the same time, private equity isn’t working. Neither is gold without an inflation problem. And we all know the situation that real estate’s in right now.

So what’s left? Just stocks. That’s why mutual funds and hedge funds are eyeing good dividend-paying stocks with the possibility of a dividend increase and consistent earnings.

“The big institutional money managers have to buy something,” Cramer said, “and there is simply nothing else that makes sense for them to buy. Stocks are really the only game in town.”

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