That was the case when Cramer told investors to sell Walgreen (WAG) last year, after the company got into a tiff with Express Scripts (ESRX) and started making a slew of acquisitions. After falling from $40 to the high $20s, Cramer advised selling Walgreen, a price that later proved to be the bottom; the stock nearly doubled from those levels.
The former Shaw Group was another Cramer pan after the nuclear disaster in Japan. Cramer figured that Shaw, which built nuclear plants, would surely falter. While shares did sink 10% from his sell recommendation, the company was acquired by Chicago Bridge & Iron (CBI) for a 72% premium.
What's the lesson from these examples? That well-run companies with terrific CEOs deserve the benefit of the doubt and skepticism doesn't pay, Cramer concluded.
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.
The first portfolio included Celgene (CELG), 3M (MMM), Salesforce.com (CRM), JPMorgan Chase (JPM) and Valero (VLO).