Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (TheStreet) -- The bears may be proclaiming the sky is falling, but if you examine when the sky actually did fall you'll find that we're nowhere near those dangerous levels, Jim Cramer said on "Mad Money" Thursday.
Cramer said the markets have seen parabolic moves in the past, such as the period between 1999 and early 2000. Back then, the Nasdaq rallied nearly 500 points per month. But in recent months, the Nasdaq has only rallied 200 points per month.
Back in 2000, the market leaders were trading at huge valuations, he added, but in today's markets, Google (GOOG), Microsoft (MSFT) and Cisco (CSCO) trade at 19, 12 and 11 times earnings, respectively -- hardly reckless valuations given that both Microsoft and Cisco sport 2.8% yields.In another market panic, that of 1987, Cramer noted the S&P 500 traded at an average valuation of 29 times earnings. Today, that number is only 16 times earnings. These are not ludicrous valuations, he continued. The semiconductor stocks are nowhere near their 2007 peak and even the best-performing financial stock, Citigroup (C), is still $450 a share from its all-time highs. Those stocks that do seem frothy, such as Tesla Motors (TSLA), are victims of a short squeeze, which illustrates that stock never should have been so low in the first place. Meanwhile, others, such as Netflix (NFLX), are also nowhere near their 2011 highs. So are stocks overvalued and poised for a huge decline? Cramer said he thinks not.
Follow the PipelineLooking for the antidote to a frothy stock market? Cramer told viewers to stick with the big themes that are working such as the North American energy revolution. He said one of the best ways to play this revolution is with the pipeline master limited partnerships, or MLPs, such as Kinder Morgan Energy Partners (KMP) and Enterprise Product Partners (EPD). Cramer said both of these pipeline players can be viewed as toll road operators for the ever-increasing amounts of crude being pumped out of our oil shale fields including the Bakken, Eagle Ford and Marcellus. Currently, there is little to no infrastructure in these areas, which has forced operators to use any means necessary, including trains, trucks and barges, to get their oil where it needs to go. That leaves huge opportunities for pipeline operators like Kinder and Enterprise to expand their operations.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV