This article was originally published March 12.
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"I want you to stay the course. This rally is real," Jim Cramer told the viewers of his "Mad Money" TV show Thursday.
He said this time there's real news behind the market's upward momentum, adding "we're not done yet."
Cramer's said all along that he'd turn positive on stocks only when he saw real signs of improvement. He said ever since Lehman Brothers was put down like a dog, every day seemed to be worse than the one before, until this week.
"This week's been different," said Cramer, who noted seven positive reasons for the rally.
First, the retail sales numbers was better than expected as reflected in the results from
and at casual dining establishments like
. He said the consumer has risen from the dead.
Bank Of America
announced that it's profitable. He said banks are making money and are under less scrutiny from the Fed.
, which he also owns for his
Action Alerts PLUS portfolio, received its long awaited ratings downgrade and the stock rallied. He said this shows that all of the bad news is already baked into the stocks.
Fourth, takeovers are back. Just look at the pharmaceutical sector which is in shotgun wedding mode, he said.
Fifth, there are upside surprises in the tech sector such as in companies like
The sixth positive is the rise in mortgage applications. As rates continue to fall, the housing bottom inches closer, said Cramer.
announced it doesn't need the last $2 billion from the government. It may not be much, but it's something, Cramer said.
These are the seven substantive changes that occurred just this week, Cramer told viewers. And that's why he doesn't feel its over yet.
In this segment, Cramer asked whether
dividend is safe. The answer, he concluded, is a decided "no."
Cramer said he's still a fan of high-dividend paying stocks that also offer growth, but warned that not all dividends are created equal. In Alcoa's case, he said "this is exactly what a company looks like right before it cuts its dividend."
Alcoa is currently yielding over 11%, but Cramer said that number should come crashing down hard. The stock has suffered a 70% decline in value, and the company has more debt than it does cash on hand. In order to just sustain its current dividend, the company would need more than $545 million, and that is more than it will likely be able to earn.
Cramer said another stock to watch out for is
. BB&T borrowed over $3.1 billion in TARP money from the government, but stands alone as the only bank taking TARP money to not cut its dividend.
Outrage of the Day
Cramer sounded off at the regulators who let Bernie Madoff and countless others operate for years without noticing any fraud. He again said that Wall Street needs to be regulated at least as much as gambling is in Las Vegas.
Cramer said Wall Street doesn't need more regulatory agencies, it needs more smart, knowledgeable regulators who can keep up with a complex and evolving world. Cramer said today's crooks can run circles around those who just check off boxes on a list. Today's regulators, he said, need to understand the business and be able to think things through.
Cramer told a viewer that
has a great yield and great management and he'd still be a buyer.
Am I Diversified?
Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included
Cramer said he considers Coca-Cola a food company, like DelMonte, and recommended selling DelMonte for a healthcare company.
The second caller's top holdings included
Cramer called this portfolio "stellar."
The third caller had
as their top five stocks.
Cramer said that this caller knew her diversification.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
United States Steel
Check out the latest edition of
"Cramer's Take onTop-Searched Stocks" on Stockpickr.
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At the time of publication, Cramer was long Wells Fargo, Unilever, Quanta Services, Pepsi, Wal-Mart, General Electric.
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