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Cramer's 'Mad Money' Recap: The Urge to Merge

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NEW YORK ( TheStreet) -- Investors are still fighting the tape, Jim Cramer told "Mad Money" viewers Tuesday, but that's not stopping just about every sector from housing and health care to retail and the rails from rallying and rallying big.

Perhaps more interesting than the market rally is what's going on behind the scenes, he said -- the urge to merge has kicked into high gear.

Cramer said while stocks are up big from their 2008 lows, they are still far cheaper than they were in 2007, which is making them more and more attractive to companies looking to grow on the cheap.

He said news that OfficeMax (OMX) and Office Depot (ODP) are looking to merge shouldn't come as a surprise, as that's exactly what's needed to compete with Staples (SPLS) and Costco (COST).

Then there's Heinz (HNZ), a company that's been increasing earnings and expanding internationally for years. Yet, the analysts remained negative on the stock, said Cramer, which makes it no surprise that Warren Buffett became interested in buying the company.

Dell (DELL) is no different, said Cramer, nor is Virgin Media (VMED), or Copano Energy (CPNO) or Acme Packet (APKT). In all of these cases, companies and their CEOs are betting big that weakness in the present will grow into big profits in the future.

Confidence has returned to the markets, Cramer concluded, so rather than fighting the tide, why not jump in and join them?

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of SPDR Gold Shares (GLD) to see if the precious metal should remain in your portfolio after what has been a difficult few months for gold.

According to Collins, the nearly five-year bullish trend for gold ended in October, when the rally lost its mojo. He noted that investors continue with their "buy the dips" strategy, but since October, every dip has only yielded another leg lower. Gold could see a 3% to 4% bounce in the short term, said Collins, but he would not be a buying of that rally.

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