We'll Know It's Safe When M&A Revives

Lots of times I get asked, "When will we know it is real, when will we know that it isn't just short-squeezes and declines and advances that get wiped out as fast as they came?" The question is rarely more pertinent than on a day like today, when the market's up huge and people are trying to figure out whether to trust it. The answer is that we will know it when acquirers come in and take advantage of the lows.

What kinds of acquirers? OK, consider that there has not been an oil takeover of any consequence since the peak, even though the stocks have repealed huge moves. Consider that the infrastructure stocks have been cut in half, but the businesses are holding up well.

If business is ever going to come back, would you let Joy Global (JOYG - commentary - Cramer's Take) buy in two-fifths and not take a shot at it? How can Bucyrus (BUCY - commentary - Cramer's Take) not call them to merge? How can Foster Wheeler (FWLT - commentary - Cramer's Take) not be bought by a General Electric (GE - commentary - Cramer's Take), or how can McDermott (MDR - commentary - Cramer's Take) stay independent?

Or how about the incredible decline in the mining stocks? If we even get some standards on coal, some, any, these stocks will seem ludicrously cheap. Of course, if Obama wins, it won't matter, but it is enough of a crapshoot that there could be a lot of upside.

A few months ago there was a flurry of cable buying, but I have now seen discovery cut in half, mostly because John Malone strikes again with complexity instead of simplicity and crushed us. But there are more channels and eyeballs there than the stock says there are.

Biotech stocks have come down huge since the time of the takeovers just a few months ago. Where is Pfizer (PFE - commentary - Cramer's Take), Merck (MRK - commentary - Cramer's Take)?

When these prices attract buyers, real corporate buyers, whether they be buyers of Ciena (CIEN - commentary - Cramer's Take) and Motorola (MOT - commentary - Cramer's Take) or Sprint Nextel (S - commentary - Cramer's Take) and Winstream (WIN - commentary - Cramer's Take), we will have a handle on the downside.

Until then, it is all trading. Of course, I would be remiss if I didn't mention that I do want Citigroup (C - commentary - Cramer's Take) to buy Washington Mutual (WM - commentary - Cramer's Take) and want Morgan Stanley (MS - commentary - Cramer's Take) and Wachovia (WB - commentary - Cramer's Take) to merge . But we can't have everything ... yet.

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At the time of publication, Cramer was long Freeport-McMoRan, Foster Wheeler Morgan Stanley. 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. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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