Cramer's 'Mad Money' Recap: The Bright Side of Market Pessimism (Final)

Cramer points out how pessimism and skepticism can open the door to profits in the markets.
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) -- "Pessimism and skepticism are going to the the engines of wealth, not the purveyors of poverty," a philosophical Jim Cramer told the viewers of his "Mad Money" TV show Thursday.

He explained that runaway greed in the markets means that a top is approaching, but a healthy dose of skepticism helps keeps greed in check so that the markets can run higher.

Cramer said that skepticism keeps people from getting carried away, and pessimism gives the markets the fuel it needs to run higher. He listed off six ways the perpetual stream of naysayers is actually helping the market.

First, last week's bogus 1,000 point decline got rid of most of the froth in the market, bringing the highest flying stocks back into line. Second, the decline scared off most of the weak players, leaving only the true believers behind.

Third, that skepticism is cooling off the IPO market. He said a hot IPO market is always a bad thing, as it means investors are ready to buy just about anything. Fourth, the skeptics are worried about lower oil prices, but in fact, cheaper gasoline gives the consumer renewed purchasing power.

Fifth, the pessimism surrounding the International Monetary Fund's ability to fix Europe is trashing the euro. But, he said people fail to realize that the intervention is working, and the IMF will ultimately be successful. In the meantime, there will be opportunities.

Finally, the skepticism surrounding housing is creating fabulous opportunities as well, especially since the data is now showing foreclosures declining for the first time in five years.

Cramer said greed is only good for one thing, and that's ringing the register. But pessimism and skepticism are just what the doctor ordered for a healthy market.

Sell Baidu

In the Thursday "Sell Block" segment, Cramer said the time has come to sell Chinese search giant

(BIDU) - Get Report

, which is up 227% in the last year, and 27% since Cramer last recommended it on March 23. Cramer explained that Baidu has simply gotten too hot for most investors to handle, but another Chinese search giant is ready to take its place.

Cramer said that



has a fabulous, yet often overlooked, Chinese ecommerce business that now makes the entire company worth a second look.

Yahoo! owns a 44% stake in the Alibaba Group, which makes it a 70% stakeholder in, a huge business to business marketplace in China that's about half the size of


(EBAY) - Get Report

, yet is sporting 100% growth year over year.

Yahoo's stake in Alibaba also gives it a stake in Alipay, the Paypal of China, which processes $176 million in payments every day, representing 50% of all online payments in the country.

Cramer said that all told, Yahoo's Chinese assets are worth about $2.4 billion to the company and could be worth as much as $10 to $20 billion if taken public as a separate company.

Cramer also said that the company's U.S. assets are nothing to sneeze at. Taking out China and Japan, along with the company's cash on hand, he said Yahoo's U.S. businesses are valued at just $6 billion, a 60% discount to


(GOOG) - Get Report

and a 74% discount to

(AMZN) - Get Report


Cramer said Yahoo's core businesses are worth twice that amount and thinks the stock could reach $20 to $25 a share.

Am I Diversified?

Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included


(AAPL) - Get Report


JPMorgan Chase

(JPM) - Get Report


Berkshire Hathaway




(MCD) - Get Report


Plains All American Pipeline

(PAA) - Get Report


Cramer said this portfolio was perfectly diversified and well-played.

The second caller's top holdings included


(VZ) - Get Report



(MO) - Get Report


Hot Topic



Energy Transfer Partners




(BLK) - Get Report


Cramer said this was a great bedrock portfolio, but one that could use a little more spice given the caller's age was only 20 years old.

The third caller had


(F) - Get Report






(VZ) - Get Report



(WEN) - Get Report


Wells Fargo

(WFC) - Get Report

as their top five stocks.

Cramer said this portfolio was fantastic and exactly what he was looking for.

The fourth caller's top stocks were


(F) - Get Report


Panera Bread



Tractor Supply

(TSCO) - Get Report


Entercom Communications

(ETM) - Get Report


JDS Uniphase



Cramer said this portfolio was also well played.

Mad Mail

Cramer told viewers that

Nordic American Tanker

(NAT) - Get Report

remains his favorite bulk shipper, while

Plum Creek Timber


is his favorite lumber play with its 7% yield.

Cramer told a viewer that he's not worried about


(T) - Get Report

losing exclusivity of the iPhone. He said those fears are already baked into the price of the stock.

Cramer told other viewers that he'd ring the register on


(ECL) - Get Report

because the stock has run too high, but he'd continue buying


(C) - Get Report

on the dips and would stick with it.

Lightning Round

Cramer was bullish on

Varian Semiconductor



Westport Innovations

(WPRT) - Get Report



(CMI) - Get Report


General Mills

(GIS) - Get Report


Nordic American Tanker

(NAT) - Get Report


Standard Pacific



He was bearish on

SandRidge Energy

(SD) - Get Report


Anadarko Petroleum

(APC) - Get Report


Hovnanian Enterprises

(HOV) - Get Report


-- Written by Scott Rutt in Washington D.C.

To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC


Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by

clicking here.

For more of Cramer's insights during the Lightning Round, clickhere


At the time of publication, Cramer was long Apple, MacDonald's, Altria

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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