Jim Cramer's Mad Money In-Depth, 1/18/08: A KISS Before Firing

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Friday January 18. Click on a stock ticker for more analysis:

MBIA (MBI), Ambac (ABK), PMI Group (PMI), MGIC (MTG)

The market is in a state of emergency and the government must rescue mortgage insurers. If MBI, ABK, PMI and MTG fail to pay $500 billion in bank loans, the insurers could go bankrupt, banks will run out of capital and the Dow will plunge 2,000 points. The crisis could be averted if the government takes over the insurers and pays off 50% of the loans. In this scenario, the Dow could rise rather than fall 2,000 points.

Microsoft (MSFT)

Cramer ended his series on neglected tech stocks with a not-so-neglected name, MSFT, which should fare well in an ailing economy because it is the second largest worldwide brand after Coca-Cola. The stock is down four points off its high and Cramer would buy ahead of its earnings call on Thursday. He adds the company has a "beautiful" balance sheet, $21.57 in cash reserves, a strong stock buyback program and was recently upgraded by Goldman Sachs. In addition, its launch of Windows Server 2008 and Service Pad 1 for Vista could "unlock pent up demand." Cramer declared MSFT the best tech stock for the bear market.

Related: Option Dragon gives an earnings preview for Microsoft.

Special Guest: Gene Simmons

Cramer had the unwelcome task of having to fire "one of the greatest merchandizing and sales people on the planet" when he let Gene Simmons go on Celebrity Apprentice. Gene Simmons admitted the firing was not disappointing, especially since he has many projects in the pipeline, including "Gene Simmons Family Jewels" and an upcoming Kiss tour. In addition, Simmons felt a lot of the other contestants lacked the entrepreneurial spirit" and were more interested in the cameras than in winning. "I was the best thing on that show and you know it," he confessed. Gene Simmons has formed a joint marketing team, Simmons-Abramson which promotes Indy Car Racing and he is also the head of Kiss Merchandising.

Special Guest, Chuck Akre of FBR Focus Fund (FBRVX), with stocks Toll Brothers (TOL) and CarMax (KMX)

Cramer advised looking into mutual funds for 401Ks and retirement investing, and discussed FBRVX, which has a five year average return of 20.7% and saw a 32.6% return in 2001 when the markets were down. Akre gave a fresh, optimistic perspective on the market, "We've been waiting for this market for years," he said. Akre likes TOL which he says has the best balance sheet of the builders, a "killer management" and is selling 80% of book value. He also likes CarMax which has a good management and sales plan, and should due well in spite of lackluster auto sales. The current strategy Akre recommends involves finding bargains and buying on scale. "This is the time when you can create value for the next half-dozen years."

Related: Stockerblog calls car dealer stocks like KMX the "ultimate contrarian play."

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