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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday October 2.

The Bernstein Bears Are Right About Costco's (NASDAQ:COST) Stock. Other stocks mentioned: Marathon Petroleum (NYSE:MPC), HollyFrontier (NYSE:HFC), Mattel (NASDAQ:MAT), Lululemon (NASDAQ:LULU)

Cramer has been bullish on Costco (COST) in the past, but with a 19% rise for the year, it might be time to slow down. A Bank of America analyst sees catalysts, such as store count increases and the upcoming holiday season, moving the stock, but the expected move is only 10.5% higher. A Bernstein Research analyst thinks most of the catalysts are baked into the stock, and believes the valuation is too rich. The reason for the rise in stock price, posited the Bernstein analyst, was that the stock was bought because it is a defensive stock and not because of its fundamentals. While the Bernstein analyst has been bearish on the stock this entire year and missed the 19% run, Cramer thinks the bearish case has validity, at least for the short-term movement of the stock. Costco management is often averse to raising prices, and if the economy is tepid, prices remaining steady might mean lower margins. Costco trades at a multiple of 22 compared to a growth rate of 12%, which is a stretch. Cramer disclosed that his charitable trust got out of the stock in June, and he would not consider buying it until it dips below $90.

Cramer took some calls:

Marathon Petroleum (MPC) is in a terrific situation and has been underestimated. HollyFrontier (HFC) is also good.

Mattel (MAT) is a best-of-breed toy stock with a 3.5% dividend, but Cramer thinks it is a gamble to buy toy stocks on the hope of a strong holiday season. However, if MAT drops so that it yields 4%, it may be a buy.

Lululemon (LULU) moved to its 52 week high, because a certain short seller who is a money manager didn't say anything negative about the stock. LULU is still a long-term growth story.

CEO Interview: Jim Prokopanko, Mosaic (NYSE:MOS)

In the agriculture segment, fertilizer stocks can be wild traders. Mosaic (MOS) has run up from the mid $40s to the $60s, mainly due to the drought, which is expected to increase demand for fertilizer. However, Mosaic missed earnings by 15 cents and reported that revenue fell 18.7% year over year. As a result, the stock fell 3.9%. One issue MOS has is a "quality problem;" it had sufficient orders, but could not deliver on them because of temporary maintenance issues. However, some markets, which were expected to be strong, were slow.

CEO Jim Prokopanko feels confident that orders for new fertilizer will be coming in, given the increasing need for the resource. Weakness in India was due to the fact that Indian farmers are accustomed to subsidies for fertilizer, and the government has cut subsidies. However, Prokopanko thinks that Indian farmers will adjust to this change, and are seeing high yields, and therefore, can afford to order more fertilizer. The issue with China is that inventory has been providing a cushion, but when this inventory runs out, there should be increasing orders from China, expected at the beginning of next year.

Mosaic faced challenges like Hurricane Isaac and the drought, but of course, those are one-time problems. There has been talk about a rise in ammonia prices, which are linked with natural gas prices, but Prokopanko thinks that these prices will remain steady, and if there is an increase, the costs will be passed on to the phosphate producers. MOS has $3.6 billion in cash and may consider a dividend increase.

Beyond the Charts: iShares Dow Jones U.S. Real Estate ETF (NYSEARCA:IYR)

The iShares Dow Jones U.S. Real Estate ETF (IYR) has run up over 12%, but lately, the REIT has seen a dramatic pullback. Cramer went "off the charts" with Tim Collins, technical analyst at RealMoney.com. According to the daily chart, the IYR is heading toward the completion of the dreaded head and shoulders pattern, and the right shoulder may be complete if the stock continues to trade sideways. The stock broke down through a floor of support of $65.50, and the stock has been unable to bounce back. The bulls seem to have capitulated, and the stock is likely to fall to $63 and might not bottom until $61. The weekly chart shows a wedge pattern that signals a decline. Cramer agrees with Tim Collins' analysis and would wait for REITs to come down substantially before buying.

Should we care that Google's (NASDAQ:GOOG) market cap surpassed Microsoft's (NASDAQ:MSFT)?

While Microsoft (MSFT) is unlikely to recapture its former glory, it might see some upside, especially with a new product cycle. While it has amazing gaming software, and if it monetizes Skype, it will be hitting a home run, Cramer thinks there is a major, persistent problem with MSFT, beyond its association with PCs; Microsoft is not cool. He suggested asking teenagers and college kids to find out if any of them are at all excited about MSFT. Google (GOOG), however, is a cool stock and it has the momentum that will propel it higher, thanks in part to its popularity.

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Source: Cramer's Mad Money - The Bernstein Bears Are Right About Costco's Stock (10/2/12)