On Tuesday, Jim Cramer, the host of Mad Money, emphasized yet again how much diversification can help an investor.
“The AI horse race consumes us. We know that there’s a lot on the line for NVIDIA or AMD every day, but how about if your portfolio is diversified? What if you’re in a five-stock portfolio plus an S&P 500 index fund with those five stocks being diversified into separate growth silos, as I suggest in How to Make Money in Any Market? The answer, you’d feel the AI horse race in one of your stocks for certain, but not all of them… Anything in tech could be hit, which is why you diversify your holdings across five different sectors, meaning only one tech. What to do with the rest?”
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Cramer then walked through what the remaining four holdings should look like. He said they must still represent growth, and he pointed to areas like healthcare, aerospace, restaurants, and retail as examples. He explained that growth names tend to hold up across different market environments and can get an extra lift when interest rates fall. He added that the Federal Reserve is now widely expected to continue cutting rates at the December meeting. He said it is a view that became stronger after a soft batch of economic data was released that morning.
“After this… set of numbers that I saw this morning, I think we’re pretty darn close to the scenario where Fed Chief Jay Powell has no choice but to recommend a rate cut. In other words, it won’t even be an issue… Now, there are… all sorts of growth areas out there that are working, including travel and leisure, life sciences, or aerospace. There are plenty of opportunities. You heard Agilent earlier. So stop wallowing in just tech. Pick four stocks that aren’t tech and have a very good day.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on November 25. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the second quarter of 2025, which was taken from Insider Monkey’s database of over 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Jim Cramer Discussed 7 Stocks and the Need for Diversification
7. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Holders: 39
Texas Roadhouse, Inc. (NASDAQ:TXRH) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer highlighted tariff cuts on Brazilian beef and their impact on the stock, as he said:
“Restaurants intrigued me now that we’re seeing commodity prices getting hit. I’m particularly partial to any chain that’s been willing to sacrifice margins to keep customers coming. You know what that means? It means Brinker, symbol EAT, parent of Chili’s, and investing club holding Texas Roadhouse. Wow. The latter’s more levered to steak than any other chain, and its sales have held up because of its refusal to take price hikes lest it alienate its core customer. So now that steak prices are coming down because the president has cut the tariffs on Brazilian beef, Texas Roadhouse should see its gross margins explode. And I don’t care that it’s up about 10 straight points.”
Texas Roadhouse, Inc. (NASDAQ:TXRH) runs and franchises casual dining restaurants under the Texas Roadhouse, Bubba’s 33, and Jaggers brands.
6. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Fund Holders: 44
Best Buy Co., Inc. (NYSE:BBY) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer mentioned the stock during the episode and said, “I hope you enjoyed Best Buy as much as I did. That one’s suddenly pretty interesting.”
Best Buy Co., Inc. (NYSE:BBY) sells technology products, electronics, appliances, and entertainment items, along with related services like delivery, installation, and technical support. Cramer mentioned the stock during the November 21 episode and commented:
“We have a slew of important earnings on Tuesday from a host of industries. In the morning, for example, we get results from Kohl’s, Best Buy, and DICK’S Sporting Goods. What am I hearing?… Best Buy will be okay. Probably hurt by higher interest rates and tariffs, although that should be offset by a PC refresh cycle.”
Additionally, Cramer talked about Best Buy Co., Inc. (NYSE:BBY) in detail during the September 30 episode and said:
“Now, I wrote How to Make Money in Any Market over a period of two years. In the chapter on dividend stocks, I initially included Stanley Black & Decker and Best Buy as interesting prospects. Now, I think both of these are well-run companies, and they yield 4.5 and 5%, respectively. I took them out, though in the next pass, because unlike the food stocks, which really don’t even need a strong economy to make big money, Best Buy and Stanley Black & Decker actually need strong consumer growth and tariff relief.
That’s just too much of a lift for me. Now, I wouldn’t be surprised if one of these stocks I just mentioned ends up making me look bad and becomes a good stock. I know this because you see, we bought both Stanley and Best Buy for my Charitable Trust, and we were shocked to see them shoot higher immediately on word of rate cuts. We sold a big chunk of those positions up higher, but then subsequently got rid of the rest at just okay prices because we were worried. In retrospect, we got lucky, I think, on the higher prices because I believe that those rallies were simply short squeezes. We definitely aren’t going back into either of those two anytime soon.”
