Shares of Netflix (NFLX) started Tuesday on a high note, with the shares gaining more than 1% out of the gate. Traders appear to be responding to new comments from Jim Cramer, after the host of CNBC's Mad Money offered an upbeat opinion on the stock Monday.

Specifically, Cramer is enthusiastic about Netflix's push into streaming content, and he has high expectations for future subscriber growth. The analyst also argued that the stock's valuation is actually quite reasonable, when measured against the company's long-term growth rate. For traders looking to take part in continued gains by NFLX, Cramer suggested in-the-money call options.

Despite a lackluster day for the broader equities market, MGM Resorts International (MGM) has racked up a healthy gain of about 4% so far. Scanning the headlines, it seems that traders are responding to a bullish endorsement for the gaming guru from CNBC analyst Jim Cramer.

"Las Vegas is coming back," declared Jim Cramer on Friday's episode of Mad Money. He went on to add, "MGM's the best way to speculate on the turn, especially considering that they helped get Senate majority leader Harry Reid re-elected."

Shares of MEMC Electronic Materials (WFR) turned higher right out of the gate Thursday morning, surging roughly 4% with the sound of the opening bell. For the catalyst behind this bullish gap, we need look no further than peripatetic CNBC analyst Jim Cramer.

On Wednesday, the Mad Money host cited MEMC as his top pick within the solar sector. To back up his bullish opinion, Cramer cited three key factors: the recent $380 million sale of subsidiary SunEdison's Italian property, lowball earnings estimates from analysts, and heavy insider buying by company execs in recent months.

I didn't find this recap of Jim Cramer's CNBC show interesting because of his recommendations. I found it interesting because he talks of an overall "bearishness of the market." Cramer noted that this bearishness began in the tech sector, spread to retail, and is now creeping into the food sector.

He notes that it is "remarkable to see how little enthusiasm there is ... even for companies that are doing well." An example of this lack of enthusiasm for good performers is that analysts will cut price targets on a stock, but will raise the company's earnings estimate at the same time.

Back in August of 2007, Barron's Bill Alpert slammed Jim Cramer's stock-picking abilities in a cover story (subscription required). At the time, Alpert reported that "Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star's Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher."

Now Alpert is back for more. In the latest issue of Barron's, he writes (subscription required) that "Cramer's recommendations underperform the market by most measures. From May to December of last year, for example, the market lost about 30%. Heeding Cramer's Buys and Sells would have added another five percentage points to that loss, according to our latest tally."

With gasoline prices plummeting, I see that every major state has enacted some form of an emergency gas tax to help fill the diminishing coffers and patch up gaping holes in budgets. It may be one of those rare bits of good news stemming from the radical deflation of commodities. I am surprised that California doesn't have one, and I figure that New Jersey, one of the states with horrible finances (perhaps among the worst, although not rivaling California or Michigan), will put one in place shortly.

I think we continually underestimate the impact of still lower gasoline prices on a host of industries. Ford (NYSE: F) (Cramer's Take) could get a windfall because it still has a big line of heavy duty gas guzzlers that are immensely popular. General Motors (NYSE: GM) (Cramer's Take) is a hard call because of its ownership structure, although I am sure it will pop with the GMAC deal. I'd sell it.

If United Parcel Service (NYSE:UPS) (Cramer's Take) had any traffic, it has a huge fuel surcharge that it can slowly diminish to help the margins. YRC Worldwide (NASDAQ: YRCW) (Cramer's Take) had a great one, but I think that company is now a goner. Obviously, I have already discussed the retail benefit, but it looks like that didn't matter much.

TheStreet.com's Jim Cramer says that it should have been obvious to many more hedge fund managers that things were going totally awry.

Something better go up besides job losses and Treasuries. The central theme of everything post the Lehman Brothers imbroglio is that everything goes down: corporate and municipal debt, M&A, stocks, commodities (particularly oil and copper), industrial production, retail sales, car sales, home sales, you name it.

In that world, no one can make money, except people who are short everything, and, judging from most hedge fund returns, that ain't working either. I mean, where is it written that hedge funds should be taking losses in this environment and gating themselves? I would suspect that cautious or negative hedge funds should be up huge in this environment. That's what they are paid to do.

If they aren't up huge, maybe the managers should come up with another calling.

I look at this because when I examine the newspapers and web sites this morning, I realize that there are instruments to short pretty much everything that's out there, from bank debt and commercial mortgages to residential mortgages and commodities. Yet, day after day, I read about these hedge funds that have to gate people, and I wonder why they all had such a long-side bias.

TheStreet.com's Jim Cramer says that CIT's approval as a bank holding company means anyone with a lending business can make it.

CIT Group (NYSE:CIT) made it to the finish line. They became a bank. After a sickening and seemingly endless slide for this lender, to $4 from $30, the whole way down with nothing but rosy projections, the company made it to bank holding company status and now it will be able to survive. Who knows, the company might even thrive, which makes that last stock offering seem pretty delectable.

The issue for me now is you are nothing if you are not a bank. You can see the ramifications of making this reckless lender -- it can say otherwise, but aren't we tired of all the say "otherwises" at this point; it's just better to admit it -- a bank. It means that anyone, no matter how profligate, no matter how wasted, can make it, if it has some sort of lending business.

I ask, why? What is the government's interest in saving Citigroup (NYSE: C)? Why bother? Should we look for other companies that lend and give them protection?

How about Las Vegas Sands (NYSE: LVS) )? When you go there you can borrow money. Prime candidate for it, I believe.

I know I was thrilled when all of those life insurers got around the law by buying little banks. That was good judgment in action.

The real worry, of course, is that without bank status, like the status of the utilities, how can you finance your way through this period? Can we make troubled retailers banks? If someone has a retail charge card, like Macy's (NYSE: M) ), isn't that the same as American Express (NYSE:AXP). Tons of retailers have charge cards and they are all candidates for bank status as they get in trouble. Neiman Marcus should have bank status.

How will we know when things have thawed? Everyone's looking at LIBOR and I can't blame them as that indicator of lending from one bank to another bank is crucial for the way the system is supposed to work. It's a good thermometer for certain, but I don't want it to overstay its welcome, because there are other "true" indicators out there besides just LIBOR.

I am looking at something else: takeovers. On Monday, we saw Waste Management (NYSE:WMI) pull its bid for Republic Services (NYSE:RSG) , a smart idea as WMI had dropped so precipitously despite reporting better-than-expected earnings that one had to question if it was worth doing it. More important, though, getting the money was proving to be possible, but difficult. This situation also prevailed in Altria's (NYSE: MO) buy of UST (NYSE: UST) where Goldman Sachs said, "Don't bother, wait," even though the integration of the two is crucial for Altria's growth.

Now I expect deals to be done if the banks are for real about lending.

Further, the endless margin selling has created tremendous bargains for well-capitalized companies to buy other companies that have brimming order books but are being kept down because of hedge fund redemptions. How can some company not want to buy a Trinity (NYSE:TRN), for example, which has been virtually cut in half even though both presidential candidates are pro-wind? Or how about a Foster Wheeler (NASDAQ: FWLT) or a Joy Global (NASDAQ:JOYG) or a Terex (NYSE: TEX) betting that if there is credit there will eventually be a revival?

David Swensen has led Yale's endowment to phenomenal results since taking charge in 1988. According to the New York Times, his advice for individual investors is simple: "use index funds, exchange-traded funds and other low-cost instruments, and stick to your long-term asset allocation -- even when the markets are in tumult."

What's interesting about the Times interview is that Mr. Swensen decided to use it as an opportunity to take some shots at Mad Money host Jim Cramer: "There is nothing that Cramer says that can help people make intelligent decisions. He takes something that is very serious and turns it into a game. If you want to have fun, go to Disney World."

Mr. Swensen sure did manage to come across as an aristocratic snob. But I'm actually inclined to agree with him to a certain extent: I would never follow Cramer's stock picks. I think he gives way, way too many tips. But I do watch Mad Money regularly because Jim Cramer is a really smart guy and has been down in the trenches of money management. Some of his broader ideas are useful, and let's face it: his is one of the few really entertaining shows on CNBC.

On yesterday's Mad Money, Jim Cramer offered his "Mad Money Manual" -- a guide to how to watch the show inspired by the criticism of his stock-picking track record leveled by the press.

The show is actually a recap of an episode from May, but I missed that one so I'll opine on it now. According to TheStreet.com's recap of the show:

In a given week Cramer said he might recommend a dozen stocks, excluding the ones in the "Lightning Round." But just because Cramer says he likes a stock, doesn't mean that viewers should go out and buy it.

Nor does it mean that if people buy that stock they will absolutely, positively make lots of money, Cramer said. "That's not how this game works."

Cramer stresses the importance of doing your own homework, but here's the problem with that advice: Can the Average Joe with a 10-inch TV and Yahoo! Finance really expect to uncover something that hedge fund legend Jim Cramer has missed?

On last night's MAD MONEY on CNBC, Jim Cramer made a review of "alternative energy stocks" he recommended earlier this year since his coverage of the green-tech picks back in April based upon a Massachusetts court ruling that was going to be a homerun for the sector. He gave a pretty large list that was in reality just a review of many stocks that benefit either directly or indirectly from "greener" movements. Here is the "full list" of his eight stocks he reviewed tonight, and there are several more from call-ins.

His Top Pick in the group is MEMC Electronic Materials, Inc. (NYSE: WFR) as it has an arms merchant business model for the solar market. It makes wafers for solar panels and is too good to pass up. He said it's cheap and he thinks out of all green stocks that this one is still bargain.

You might want to know that MEMC already has a $16 billion market cap, but the forward growth rates in this part of its business are hard to argue against. This movement in "green" strategy has just recently helped the stock get back above levels seen in the late 1990's. Keep in mind that this one also produces wafers for the global semiconductor industry, so it isn't a pure-play in the sector. This one closed up big with the sector today at $74.74, but shares traded up 3% in after-hours after-hours trading to what will be a new high.

A couple of 24/7 Wall St. comments in the alternative energy area:

• An even more interesting analyst call in alternative energy today was where Lazard Capital called Capstone Turbine Corporation (NASDAQ: CPST) as a potential double to $2.50 per share. This one has been around forever and used to be considerably higher.
  
• If you want a more diversified play, you can always look at the best ETF in the sector: PowerShares WilderHill Clean Energy (AMEX: PBW).

Jon Ogg produces the Special Situation Investing Newsletter; he does not own individual stocks he covers.

Two UC Santa Barbara Grad students analyzed Jim Cramer's picks on his show Mad Money and reached an unsurprising conclusion. From the Economics Blog on Portfolio.com: "Mid- and large-cap post-pick excess returns are generally of the correct sign, though the magnitude of these returns is relatively small. Where Cramer displays the most ability is with small-cap stocks, in both his caller and non-caller picks"

This is consistent with the overall trend of money managers being most able to create alpha when investing in small-caps. Given Cramer's limited time for researching any one stock, and the vast quantity of research already done on almost every large-cap, how can anyone expect him to identify ideas that aren't already conventional wisdom and priced into the stock? Markets are just too efficient at that level for superficial analysis to yield much in the way of results.

But in small-caps, research is much more likely to yield an edge.

Perhaps most interesting, the students found that Cramer's picks generated the most excess returns when he made small-cap sell calls.

So perhaps the strategy for people looking to profit from watching Mad Money is to short small-caps where Cramer's pounding the "Don't buy it!" button.

Barron's cover story on Jim Cramer this week is a perfect August cover: beach reading about whether Cramer is a good stock picker.

Cramer and I went to college together and I was a board member at TheStreet.com (NASDAQ: TSCM), so I am not unfamiliar with Jim's career.

The Barron's piece starts out by saying the viewer of Cramer's show Mad Money would only have made 12% on Cramer's picks over the last two years. The magazine uses a firm called YourMoneyWatch to determine that. It tracks Cramer's stocks from when he tells viewers to buy them up until he says that they are "sells." In a chart, Barron's shows Cramer's performance against the two year advances of the Dow at 22% and the S&P at 16%.

Cramer has a wide following. His Mad Money show has 138,000 viewing homes according to Nielsen. Several hundred thousand more people read him through products at TheStreet. He is written about in the press several times a month, so Cramer is almost certainly the most widely followed stock guru in the country.

The cover story on this week's Barron's is likely to get attention for a long time, and may even serve to drive down the price of TheStreet.com (NASDAQ: TSCM), Jim Cramer's company. Journalist Bill Alpert takes a look at the track record for Cramer's picks on his show Mad Money.

According to Alpert, "a comprehensive and careful review of his stock picks by Barron's finds that his picks haven't beaten the market. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star's Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher."

I would never dream of buying any stock based on Cramer's recommendation, and here's why: Warren Buffett, one of the greatest investors in the world ever, has often said that he can only find a few good investment ideas per year. All you need is a few in your life to do well. How about Jim Cramer? He gives a few stock picks per show, five days a week, and then gives dozens more buy and sell calls on the Lightning Round each week.

This flies in the face of what most people understand about the markets. We can argue about the extent of their efficiency (Burton Malkiel would argue that nearly every stock is perfectly priced all the time) but the idea that anyone, even a guy who bites heads off of bears, could find so many market inefficiencies each day is absurd. If Cramer can do that, how come almost no one can beat the market? Cramer makes it too easy -- except, according to the Barron's report, he doesn't really. He just pretends to on TV.