These are just a few examples of how a well-diversified portfolio can trounce the averages, said Cramer, but only if individuals ignore the pessimists and believe in their own abilities.
Checking Out Merck
Now may be the time to swap out of some of the high-flying big pharma names and into one of the group's biggest laggards, Merck (MRK), which now yields 3.9%.From bad clinical trial data in December to delayed drug applications just last month, Cramer said Merck has received an awful lot of bad news in a very short period of time -- news that explains why the stock has been lagging Pfizer (PFE) and Celgene (CELG). But now that the bad news has past, Cramer said it's time for Merck shares to play catch-up. Merck still has a strong HPV vaccine business as well as a strong animal health division, noted Cramer. The company has a strong pipeline of new drugs, with a total of 16 in late-stage Phase III testing and another 20 in early-stage Phase I and II testing. With the stock trading at just 11.6 times next years' earnings, Cramer said March could see an easy pop of $10 a share or more now that the bad news is behind them. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC
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