Mad Money

Cramer Remix: The reason why the market rallied

Cramer: Why the market rallied

Jim Cramer saw investors reaching to growth where ever they could find it on Thursday. And sometimes when the market gets desperate for growth, stocks that one would least expect to make a comeback will rally.

However, based on the action happening around the globe recently, Cramer wasn't surprised that investors reached for growth. First the Fed decided not to raise rates, then China produced weak numbers, major industrials confirmed slowing business, housing weakened and job creation in energy came to a stop.

The coup de grace came on Wednesday when Wal-Mart, the world's largest retailer, announced disappointing sales and earnings forecast.

"You put all these together and you get something that we have seen happen time and again in periods of economic softness: buyers cut loose from the industrials and they go for the gusto; they return to growth," the "Mad Money" host said.

Considering that Cramer thinks the market is overbought currently, he speculated that buyers simply reversed to the most ridiculously oversold groups in the market — high growth and banks.

In Cramer's point of view, these stock rotations tend to be short lived. So, he said to enjoy it while it lasts.

Read More Cramer: Enjoy the rally. It's only temporary

Damien Meyer | AFP | Getty Images

When Trian Partners, the activist hedge fund run by Nelson Peltz, disclosed that it had taken a giant position in General Electric, Cramer was intrigued. In fact, when Cramer was doing research for his last book he found that Peltz was the only activist investor that consistently beat the market if investors piggybacked after he had disclosed that he had taken a position.

Many activist money managers can beat the market, but they are only required to disclose holdings once a quarter. That means investors will almost always end up paying a higher price for the same stock, because the stocks will tend to spike once the news breaks.

"But Nelson Peltz is so talented at convincing companies to unlock value that it is often worth buying his favorite holdings, even if you have to buy into the spike that almost always comes with his announcement of a hefty new position," the "Mad Money" host said.

So, Cramer was excited a week and a half ago, when Trian Partners announced it had become one of the 10 largest shareholders in General Electric and said the stock was undervalued and underappreciated and predicted it could travel as high as $45 in 2017.

However, Peltz is invested in this company for the long term. So, between GE's oil business and its exposure to China, Cramer expects a good but not a blowout quarter.

"Given that the stock has rallied 20 percent since bottoming in late August, any kind of sub-par performance will likely cause it to sell-off," Cramer said.

Read More Cramer: What to expect when GE reports

Cramer also heard some surprisingly positive stories from the big national banks earlier this week, so he was interested in hearing what the regional banks had to say on Thursday.

BB&T is a regional bank that is heavily concentrated in the southeast and has a 2.95 percent yield. It has been making a series of acquisitions, as back in August investors learned that it would buy National Penn Bank for $1.8 billion in cash and stock, right after it had closed on its purchases of Susquehanna and Bank of Kentucky.

With interest rates still low and the economy getting better and the stock only a few points above its 52-week lows, Cramer thinks it could have more room to run.

To learn more, he spoke with BB&T CEO Kelly King.

"I think there was kind of a general lackluster view, and while all of our earnings are not fantastic, they are a lot better than I think people thought. And so you are getting a positive kick appropriately in the market," King said.

Elizabeth Holmes, founder and CEO of Theranos.
David Orrell | CNBC

One of the most exciting privately held companies in Silicon Valley came under fire on Thursday. Theranos has been viewed by some as a revolutionary company and has been valued at as much at $9 billion in its most recent round of fundraising.

Theranos is a diagnostics company with fast finger-prick blood testing technology that aims to upend the traditional health care establishments by making it easier, less expensive and more comfortable to get tested for various conditions.

Howeverm the company also has critics. The Wall Street Journal ran an article about Theranos Thursday, alleging that the company's proprietary testing devices may be inaccurate. The Journal cited a former employee who claimed that of the 240 tests offered by Theranos, only 15 are actually performed on the company's proprietary Edison diagnostic machine, with the vast majority done on traditional lab equipment.

A WSJ representative earlier told CNBC the newspaper "fully stands by [author] John Carreyrou's article about Theranos, which was richly sourced and thoroughly researched."

With that in mind, Cramer always likes to make sure both sides of a story are represented. That is why he spoke with Elizabeth Holmes, the founder and CEO of Theranos, to give her a chance to provide her perspective.

The CEO speculated the reason why Theranos has garnered so much attention and scrutiny, stating, "This is what happens when you work to change things, and first they think you're crazy, then they fight you and then all of a sudden you change the world." (Tweet this)

Read More Theranos CEO fires back at WSJ: I was shocked

In the Lightning Round, Cramer gave his take on a few caller favorite stocks:

Laredo Petroleum: "When they are all real down, you go for high quality. That's the way it works. I like Occidental; it's got that good yield. I know it's controversial. If you don't like that go with ETP for a little yield."

The Carlyle Group: "My feeling is that while the Carlyle Group is certainly well respected, I'm not going to disagree with that, I have been partial on this show to the Blackstone Group...I think it's got a better profile. I like those guys."

Read MoreLightning Round: My controversial petroleum play