Buyouts Are Worth Staying For

Query: What do the takeovers that are driving this market positively and counteracting the financial uncertainty on days like today have in common?

The answer: nothing.

Or, if you are a bull, everything.

Hospitals, real estate, oil drilling, minerals, services, autos, banks, technology, tobacco, retail, health care services, pharmaceuticals -- there are no common strains. They only have one thing in common: They are common stocks.

That means, to me, that common stocks of all sorts are undervalued as enterprises even as we believe they are overvalued on an EPS basis because the bias of the market is saying that earnings are slowing, so sell stocks.

Some of the undervaluation comes from the lack of alternatives to equities. This allows money to be so cheap that you can lever up many balance sheets and still be in a position to make money.

I point all of this out because you simply can't ignore all of the buyout activity and the disparate sectors affected, something that should tell you not to leave the game so fast, as so many people seem inclined to do.

Random musings: Dollar/yen and an unwinding of the carry trade would, per se, be a buying opportunity when you think about it. That's because there is no impact on the earnings per share for our companies -- except a positive one for those in competition with commodity Japanese manufacturers. It's never presented that way, typically because the people talking about it don't even understand it. ... Nortel (NT - commentary - Cramer's Take) and Alcatel-Lucent (ALU - commentary - Cramer's Take) are pathetic parodies of companies, but that makes Cisco (CSCO - commentary - Cramer's Take) even more powerful. ... Wasn't China supposed to kill us today? ... Did the Accredited (LEND - commentary - Cramer's Take) deal create a template for the way out of the mess?

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Please note that due to factors including low market capitalization and/or insufficient public float, we consider Accredited Home Lenders to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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