Cramer's 'Mad Money' Recap: Getting Beyond Pessimism (Final)

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NEW YORK ( TheStreet) -- "A healthy dose of skepticism makes sense, but not pessimism," were Jim Cramer's words to the viewers of his "Mad Money" TV show Monday.

He said it's become clearer than ever that after two years of horrific events, it's time to move beyond the pessimism.

Cramer said it's understandable how the markets have become so negative after the last two years. He said the negativity began with the real estate collapse in 2008 that was quickly followed by the failure of Bear Sterns. Towards the end of the year, the crisis expanded to Lehman Brothers before the entire financial system came to a halt.

In 2009, things did not get much better, said Cramer, as Bernie Madoff took center stage, followed by bank failures, General Motors' financial crisis and finally double-digit unemployment.

Then in 2010, when things were beginning to look up, Europe's troubles took over, accented by the investigation of Goldman Sachs ( GS), the "flash crash," and of course, the BP ( BP) oil spill.

Cramer said with this long list of negatives, investors might think the markets were hopeless during this period, but they'd be wrong. He said stocks like Apple ( AAPL), a stock which he owns for his charitable trust, Action Alerts PLUS , along with ( CRM), Ford ( F), Cirrus Logic ( CRUS) and others all flourished.

Cramer reiterated that a diversified portfolio of high-yielding dividend stocks is the best way to play times of crises. But now that these events have all been resolved for the better, it's time to begin the next chapter.

Power Management

In the "Executive Decision" segment, Cramer spoke with Sandy Cutler, chairman and CEO of Eaton ( ETN), a company leading the way in power management solutions. The stock has doubled since Cramer first recommended Eaton on Oct. 22, 2008.

Cutler called power management one of the bankable mega trends for the coming years as the price of energy gets more and more expensive. He said Eaton has terrific leverage in helping its customers use less energy and use it more safely. That's why the company was able to deliver sales growth of 16% and was able to boost its dividend by 16%.

When asked about sales Europe, Cutler said the old metaphor of comparing eastern Europe to western Europe no longer applies. Instead, he said, it's more accurate to compare northern Europe, which is stronger with its ability to export more thanks to a weaker euro, to southern Europe, where the countries are considerably weaker. But no matter how to divide the continent, he said, there is still growth to be found.

Cutler said two other bright spots for the company are its datacenter business, where Eaton helps prevent energy waste, and trucking, which will be a strong propellant for growth.

While Cutler conceded that this recovery is a lot slower than any other since World War II, he said there are still hot segments out there, and Eaton has found them. Cramer agreed, calling the company's quarterly results "the greatest industrial quarter I've ever seen."

King of Virtualization Software

Investors looking for the company with the best earnings for the quarter need look no further than virtualization software maker VMware ( VMW), Cramer said.

He said VMware posted the best earnings of any company he follows, which is why its stock is flirting with its 52-week high.

Cramer said VMware is the leader in virtualization software, which can save businesses 50% to 70% on their IT budgets. He said the company posted blowout numbers, with revenues up 48%, net income up 125% and better-than-expected margins.

What's more, Cramer said VMware did what all high growth stocks must do, they beat the "street high" estimate from the analyst with the highest expectations for the company.

Cramer said VMware even scored high on his proprietary "congrats index," a measure of how many analysts offer management congratulations on their outstanding quarter. For those interested, VMware scored five "congrats" out of 13 analysts for a score of 38%.

Cramer said VMware still has plenty of room to grow, with only 42% of all servers running virtualization software. The company is expanding from large businesses, into medium and smaller businesses, as well as expanding deals with giants ( CRM) and Google ( GOOG).

Cramer said another way to play VMware is with EMC ( EMC), an Action Alerts PLUS stock, which does not get nearly enough credit for its $26 billion stake in VMware. "This stock is a buy," said Cramer.

Mad Mail

Cramer told a viewer that Citrix ( CTXS) is not as good as VMware or and he's not a buyer.

Cramer told another viewer that Boeing ( BA) is just beginning a seven- year bull cycle, and that means great things for Precision Castparts ( PCP), along with all of Boeing's suppliers.

Lightning Round

Cramer was bullish on JPMorgan Chase ( JPM), Marathon Oil ( MRO), Universal American ( UAM), iRobot ( IRBT), Deere & Co ( DE), United Parcel Service ( UPS) and Fedex ( FDX).

He was bearish on Exxon Mobil ( XOM).

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

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Apple.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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