Mad Money

Cramer: Smart money making 5 dumb mistakes

Smart money is angry: Cramer

(Click for video linked to a searchable transcript of this Mad Money segment)

The Street often calls hedge funds smart money. But Jim Cramer doesn't think the moniker is all that well deserved.

Right now they're getting 5 stocks very wrong. And he adds "it's just infuriating them because the dumb money (aka individual investors) is spot on."

Following are five examples:

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Amazon: Cramer says pros despise Amazon because it trades at such a high valuation. "Also, the intelligentsia refuses to recognize the stock's incredible run because the company's profits are still hypothetical."

But the vitriol has resulted in a missed opportunity. Shares of Amazon are up more than 50% ytd and Cramer sees a concrete reason for further gains.

"There are big storms all over the nation, so big that they might even impact Black Friday. What have we learned every time we're shut in because of bad weather? We shop on Amazon," Cramer said.

Netflix: Again, pros balk at the valuation. However sitting out Netflix, resulted in missed gains of more than 250% ytd.

"Netflix is loved," Cramer reminded. The company has an emotional connection with its audience. If anything that emotional connection is more likely to drive buying, not selling..

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VF Corp / Decker: "The intelligentsia is apoplectic about the rallies in VF Corp and Deckers," Cramer revealed. They argue the stocks are caught in a predictable pattern and will fall just as quickly as they rose. But so far the advances have been somewhat of a straight line higher with VF Corp more than 50% high ytd and Deckers up over 100% ytd.

Cramer thinks the smart money is missing something critical. "Deckers and VF Corp aren't expensive. It's entirely possible that these stocks might actually be attractively priced," he said.

Workday: Cramer says smart money is skeptical of Workday, because it competes with goliaths such as Oracle. "The one is an absolute anathema to the wise men."

That anathema has cost smart money 50% ytd.

If Oracle is a goliath then Cramer says Workday is a kind of David in this fight. That is, it's a company that's small and therefore nimble in an area where nimble is a serious asset – the cloud.

Hain Celestial. With a 31 multiple, smart money argues that Hain has advanced too far too fast with buyers becoming overly euphoric about the company's ability to leverage the trend of natural eating. They believe a recent article in Barron's confirms their wisdom.

But that wisdom comes with a price - a missed opportunity that currently comes in around 50% ytd.

Cramer doesn't shares their wisdom. He believes the advance is a sign that healthy eating is becoming a widespread phenomenon. Cramer believes conventional supermarkets are buying more Hain products in an attempt to compete with their specialty counterparts and therefore the advance and the multiple are well warranted.

Call Cramer: 1-800-743-CNBC

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