Cramer's 'Mad Money' Recap: Buy the Dips (Final)

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NEW YORK (TheStreet) -- "Investors have paid a high price for being too negative," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday. He said that while the markets have had a remarkable run in 2009, those who were too negative were left in the dust.

Cramer recounted the three times this year when being too negative proved to be a costly mistake. He said the first inflection point was when the markets hit their lows in March. Back then, Cramer said even he was afraid to turn positive on the markets. But after a bottoms-up analysis of the Dow, he determined the lowest the markets could go was Dow 6,500, and the downside was just too limited not to be a bull.

The second inflection point came in May, when a flood of secondary offerings from the banks stopped the financial sector in its tracks. So many investors felt the markets couldn't rally without this key group and sold off in droves, Cramer said. But that too was wrong, as the industrials and the health care sectors picked up where the financials left off, and the markets again rallied.

Finally, there was late October, right after the market hit Dow 10,000. After a sharp pullback to Dow 9,600, investors again sold in droves, opting for the illusion of safety in U.S. Treasuries or bond funds. Once again, this move was costly, said Cramer, as the markets rallied once more.