×

Cramer Remix: Avoid these stocks after a rate hike

With the Federal Reserve making a monumental move to raise interest rates for the first time in nine years, Jim Cramer breathed a sigh of relief as the market rallied in response.

So, that was it?

Yes. The Fed basically said that it would raise rates very slowly, perhaps only four times next year and it could be less than that if the economy weakens. So, instead of the old days when the Fed would sequentially raise rates in lockstep, the Fed has decided to use common sense and see if the hikes do any damage first.

Cramer interpreted this action as the Fed acknowledging that things aren't perfect right now, and pretty much never are, but they look a heck of a lot better than they did when rates were knocked so low in the first place. It was a sign of confidence in the economy, rather than a "we have to do this, sorry."

"In other words, the economy more than deserves to get out of intensive care, and it might go to a regular hospital bed for a while and then go into rehab until it is totally healthy. Rehab being rate hikes spaced out over time, with some pain if we get too much gain," the "Mad Money" host said.

First, almost 15 percent of companies in the S&P 500 will earn more with higher rates, namely the banks. They make more money off of customer deposits, and the move will allow banks to charge more on loans, too. The winners in this group are Wells Fargo, JPMorgan andBank of America because of their large deposit bases.

Another chunk of the stock market will go back to feeling the pain of lower oil prices, which will mean more stress in the system and more oil companies defaulting.

Read MoreCramer: That was it, Fed? Juicy stocks to watch

U.S. Federal Reserve Chairman Janet Yellen
Jonathan Ernst | Reuters

In the wake of Chipotle's recent outbreaks of both E.coli and norovirus, Cramer wanted to know how worried customers and investors should be.

At least 52 people were sickened after a multi-state E.coli outbreak was discovered to be linked to Chipotle. While health officials have not yet determined which ingredient caused the outbreak, the company has taken several measures to make Chipotle safer.

"We want to show all of our customers that the industry standards that we had been employing before — which are considered great standards — were not good enough. They were not good enough because something like this could happen," said founder and co-CEO Steve Ells.

"I will say though, that we can assure you today that there is no E. coli in Chipotle," Ells said. "We have thoroughly tested our food, we have thoroughly tested our surfaces and we are confident that Chipotle is a safe place to eat." He also confirmed that the company's new safety measures will put Chipotle well ahead of industry standards.

Read MoreChipotle CEO: There is no E coli in Chipotle today

Last week Cramer received a question from a caller that wanted to know if high-flying growth stock Salesforce.com or old school value tech stock Microsoft would be better for her son.

Cramer thought this was a great inquiry because it highlighted the importance that one has to know themselves before picking stocks. A 20-year-old millennial will have a very different portfolio than their 50-year-old parents.

"Younger investors are in a much better position to take risks with their money, whereas older investors need to be more careful about preserving their capital," Cramer said.

That is why he thought Salesforce.com would be the ideal stock for millennials, but Microsoft would be better for parents.


A person walks past a Chipotle Mexican Grill store location in downtown Portland on November 3, 2015 in Portland, Oregon.
Steve Dykes | Getty Images
A person walks past a Chipotle Mexican Grill store location in downtown Portland on November 3, 2015 in Portland, Oregon.

With all the chatter about junk bonds lately, Cramer has a hard time believing that investors would really consider them cheap. In fact, he's throwing that conventional wisdom out the window — especially now that the Fed has just raised interest rates for the first time in nine years.

"Having been knee-deep in researching the funds that own this kind of paper, I come back and say that the classes of junk bonds are so bifurcated that the notion of 'cheapness' is ludicrous," the "Mad Money" host said.

In Cramer's perspective, the same pundits who are chattering about junk bonds being cheap are the same ones who thought emerging market debt was cheap.

"All I can say is that these people who claim it is cheap tend to have one thing in common — they have some junk to sell you," Cramer said.(Tweet This)

Ultimately, Cramer warned investors to beware of the debt merchants that bear gifts. Those are also the same companies that will not want to show the true prices of their junk paper at the end of the year.

Read More Cramer: Beware of debt merchants bearing gifts

With holiday season in full swing, Cramer decided to turn his attention to one of the hottest categories out there — video games. The fourth quarter is when game developers make the most money, and Cramer considers Take-Two Interactive Software the best in the group.

Take-Two is the company that is behind well-known games such as "Grand Theft Auto", "Red Dead", "Max Payne" and "MLB 2K."

Last month Take-Two reported a fantastic quarter and management raised its full-year guidance, with strength driven by the success of its "NBA 2K16." With the stock rallying 28 percent this year, does it have more room to run? Cramer spoke with the company's chairman and CEO Strauss Zelnick to learn more.

"40 percent of our revenue in the last quarter was digitally delivered. Half of that was recurrent consumer spending, and that is basically a brand new business," Zelnick said.

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

Ziopharm Oncology: "I think that they've got good partners, but you have to understand that this is one of those companies that when you have a Celgene, you have a Biogen, when you have an Amgen still well off their highs, you want to go with the higher, bigger guy! That's my suggestion."

ConocoPhillips: "They say the dividend is safe, the problem is that it is often out of control as we learned with Kinder Morgan. I know that the rating agencies want to downgrade these guys repeatedly. I am not a fan of ConocoPhillips."

Read MoreLightning Round: Go for the big guys in this group