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NEW YORK ( TheStreet) -- "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 BaiduIn the Thursday "Sell Block" segment, Cramer said the time has come to sell Chinese search giant Baidu.com ( BIDU), 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 Yahoo! ( YHOO) 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 Alibaba.com, a huge business to business marketplace in China that's about half the size of eBbay ( EBAY), 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 Google ( GOOG) and a 74% discount to Amazon.com ( AMZN). 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 Apple ( AAPL), JPMorgan Chase ( JPM), Berkshire Hathaway ( BRKB), MacDonald's ( MCD) and Plains All American Pipeline ( PAA). Cramer said this portfolio was perfectly diversified and well-played. The second caller's top holdings included Verizon ( VZ), Altria ( MO), Hot Topic ( HOTT), Energy Transfer Partners ( ETP) and Blackrock ( BLK). 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 Ford ( F), Safeway ( SWY), Verizon ( VZ), Wendy's ( WEN) and Wells Fargo ( WFC) 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 Ford ( F), Panera Bread ( PNRA), Tractor Supply ( TSCO), Entercom Communications ( ETM) and JDS Uniphase ( JDSU). Cramer said this portfolio was also well played.