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Cramer Remix: If you want the economy to do better, these stocks have to do worse

  • "Mad Money" host Jim Cramer reveals why all stock moves aren't created equal.
  • Cramer also explains how Nike and Micron are polar market opposites.
  • In the lightning round, Cramer issues a warning on a fast-growing e-commerce name.

Knowing when rallies are sustainable is critical to any investor's portfolio, so CNBC's Jim Cramer looked back on his decades of experience to pinpoint exactly what makes a rally trustworthy.

"There are such things as bad rallies," the "Mad Money" host warned. But Wednesday's jump on President Donald Trump's announcement on tax reform was not one of them, he said.

And while a rally in financial, technology and transportation stocks can often signal a good rally, investors should never want to see certain stocks leading the charts, Cramer contended.

"I'm thinking about really good companies [like] the stock[s] of Clorox, Procter & Gamble, Coca-Cola, Kraft Heinz. We want those to go down because the economy's strengthening. Who wants to be in those stocks if things are really getting better? Not me and not you," Cramer said. "Look, a diversified portfolio is never a bad thing. [It's] fine to have one or two of them, but not if you expect the economy to roar, which is what the bank stock rally says."

Palo Alto Networks CEO on Equifax Breach

Mark McLaughlin, president and CEO of Palo Alto Networks.
Mary Catherine Wellons | CNBC
Mark McLaughlin, president and CEO of Palo Alto Networks.

After a hack at Equifax potentially put the information of 143 million U.S. consumers at risk, Palo Alto Networks Chairman and CEO Mark McLaughlin shed light on measures the firm could have taken to ensure it was protected.

"Companies have been running very siloed, disparate capabilities for a very long time, and that's what we invented, was the whole idea to say, 'That's not the way to do it. You need this stuff to be automated and orchestrated and take the humans out of the process so somebody doesn't have to get alerted and go fix something somewhere,'" McLaughlin told Cramer in an exclusive Wednesday interview.

One of Palo Alto's top preventative recommendations is for companies to use "highly automated prevention," which automatically updates and fixes vulnerabilities or problems across their networks, the CEO said.

Driving Uber in the Right Direction?

Dara Khosrowshahi
David Ryder | Bloomberg | Getty Images
Dara Khosrowshahi

After months of hearing about scandals at Uber and the privately-held company's very public search for a new CEO, Cramer finally found something to be pleased with.

"I spend a lot of time criticizing boards of directors for failing to fire chief executives who've so obviously done a poor job of creating value for their shareholders. That's why, when a company does something really right, I think they deserve praise," the "Mad Money" host said. "So let me break down why exactly I believe Uber made the right call when they hired Dara Khosrowshahi."

The ride-hailing company hired Khosrowshahi, the former CEO of Expedia, after its co-founder and former CEO, Travis Kalanick, stepped down due to pressure from shareholders.

Uber's search for Kalanick's replacement involved high-profile candidates such as HP's Meg Whitman and Facebook's Sheryl Sandberg, but looking back at Khosrowshahi's history at Expedia, Cramer insisted he was the right choice for the job.

Finding Balance at Lululemon?

Laurent Potdevin, CEO, Lululemon
Scott Mlyn | CNBC
Laurent Potdevin, CEO, Lululemon

As Lululemon Athletica outperforms its struggling rivals, CEO Laurent Potdevin told CNBC that brick-and-mortar retail won't fade into obscurity anytime soon for one simple reason.

"If you think about the evolution of how people lead their life and the evolution of athletic, mindful lifestyle[s], we know for a fact that people continue to crave human connections," Potdevin told Cramer in an exclusive interview on Wednesday. "And they might not go to the mall as much and it's not about the food court or the movie theater, but we know that, ultimately, people don't want to be stuck to their phone and they crave human connections, and that's what our communities do so well."

The CEO said that his company's 2,500 brand ambassadors help Lululemon have its "finger on the pulse" in various communities around the globe and foster human engagement at its 421 physical locations, all of which Lululemon directly controls.

And while Potdevin acknowledged the weakness in other athletic retailers like Nike, he said his brand is different.

Sneakers and Chips

Finally, Cramer drew a comparison between two seemingly disconnected companies: sneaker giant Nike and semiconductor manufacturer Micron.

The "Mad Money" host said they both rely on supply and demand, or, in more basic terms, inventory, to succeed in their respective sectors. Micron is currently seeing low supply and a surge of demand, which contributed to the chipmaker's blowout fourth-quarter results.

But Nike's demand was flat year over year, putting pressure on shares after the retailer's mixed earnings results.

"Now, not everyone is sold on either of these companies. Nike's going to keep hurting because of oversupply. Micron's going to keep going higher as long as there's undersupply. But the simple fact is Nike's sales have hit a wall because of brick and mortar and mall disruption, while Micron's demand is accelerating and exploding, which is good for all of technology," Cramer said. "So chips and sneakers? They're both all about supply and demand. And in that context, Micron wins by a mile."

Lightning Round: Shop SHOP When It Drops

In Cramer's lightning round, he shared his take on some callers' favorite stocks:

Shopify Inc.: "We like Shopify, as long as everyone understands it's really expensive. We've been behind this thing for a long time. It is in nosebleed territory, I will admit that, but it is a very fast-growing, good company."

Hawaiian Holdings: "You know what, I think it's fine, but my favorite is Southwest Air [and CEO] Gary Kelly because they've never lost money. So that's my recommendation."

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