Cramer's 'Mad Money' Recap: Get Over Your Pessimism and Buy

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NEW YORK ( TheStreet) -- There's always tons to fret about in the markets, Jim Cramer told "Mad Money" viewers Monday, but when no one believes in the rally that might just be the perfect time to buy.

Cramer said hated rallies don't stay hated for long. Eventually even the most bearish investors are forced to capitulate and come in from the sidelines. It may be tough to stay bullish in times of high pessimism, but sometimes you just need to get over it and start buying.

There are tons of reasons to hate the markets, or so the bears tell us. They're worried about the light volumes, they fret about the "unsteady" banking system, and they've even devised a way to hate great earnings by citing "light revenue" numbers. But whether it's earnings or politics or the market mechanics, none of these are reasons to not embrace this rally, said Cramer.

While it may not seem like it to younger investors, we've been here before, recalled Cramer. Almost 24 years ago to the day, he said, there was palpable pessimism in the markets. Back then, even he was caught up in the hype, Cramer admitted. But after stern words from his soon-to-be wife and trading partner, Cramer said he started buying, taking full advantage of the 1,000-point rally in the Dow Jones industrials that followed.

Cramer said it's easy to sound smart and prudent when you're a bear, but there will always be things about the stock market to make you worry. When everyone is a bear, that's the time to buy -- not the time to sell.

Cramer's Obsession

Cramer said he's become obsessed with Mellanox Technologies ( MLNX), the little-known semiconductor company that's delivered an astonishing 248% gain so far this year. While he featured the company as part of his "Home Run Derby" series back in March, even he couldn't have imagined this company's phenomenal rise.

Cramer said the reason for Mellanox' success is simple: The analysts have been continually underestimating the company. Back in April, when the analysts were looking for paltry revenue growth of just 2.4%, Mellanox delivered an impressive 44% sequential increase in revenue. Afterwards, the analysts dug in their heels, refusing to raise their targets only to get blindsided by the company's next two quarters as well.

Mellanox makes what are known as high-performance interconnects, chips that service the big data industry by allowing faster throughputs and lower lag times. The company's only rival, Intel ( INTC), has chosen not to compete in the interconnect space, allowing Mellanox to control the entire segment.

Cramer said shares of Mellanox still only trade for 30 times earnings, despite the company's impressive 49% growth rate.

Cramer's Fantasy Team

It's almost football season and Cramer treated viewers to the first installment of his "Mad Money Fantasy Stock Portfolio" by debuting his three picks for running back -- the steady, consistent players who are the backbone of every winning team.

Wells Fargo ( WFC) was first to make the list. Cramer said this bank is the largest in the U.S. by its number of branches and the company controls a staggering one-third of the U.S. mortgage market.

Wells Fargo is the most levered to the coming rebound in the housing market, which is why Cramer said he owns it for his charitable trust, Action Alerts PLUS. Shares of Wells Fargo trade at just nine times earnings and 1.3 times the company's book value.

Next on the list was 3M ( MMM), a company that, while just off its stock highs, still continues to innovate and take market share in multiple end-markets. Cramer said this international powerhouse is not suffering from Europe thanks to its diversification, and he's a big fan of the company's 2.5% dividend yield.

For his third running back, Cramer chose Honeywell ( HON), another diversified industrial that has its hands in everything from aerospace to automation to energy efficiency and just about everything in between. Cramer said Honeywell has top-notch management and also sports a 2.5% dividend yield.

Lightning Round

Here's what Cramer had to say about callers' stocks during the "Lightning Round":

SeaDrill Limited ( SDRL): "I've missed this stock but I think it's got more to run."

International Game Technology ( IGT): "No, I'm not going to go there. "

Duke Energy ( DUK): "You should buy Duke. I'm not about office politics, I'm about the company and it's real good."

Bed Bath & Beyond ( BBBY): "This company was overly punished for its last quarter. I like it."

Booz Allen Hamilton ( BAH): "It doesn't seem to get cheap. I reiterate it's a great situation."

American Capital Strategies ( ACAS): "No. I like American Capital Agency ( AGNC) and Annaly Capital ( NLY)."

Fossil ( FOSL): "They lowered the expectation. I'm going to say don't buy."

Hexcel ( HXL): "That's a great aerospace play. Everyone will want to flock to that one."

Harris Corp ( HRS): "Even at a 52-week high, this is undervalued. I like it very much."

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Jeff Gardner, president and CEO of Windstream ( WIN), a rural telecommunications company with a hefty 10.6% yield.

Gardner explained that investors should not look at Windstream on an earnings per share basis, but look at cash flow when evaluating the company's dividend. He said Windstream generated $1.60 per share of cash flow over the past 12 months, which makes him very comfortable with his company's current dividend yield.

When pressed about the company's lackluster performance so far this year, Gardner attributed the 20% decline in Windstream's share price to a broadband promotion that "missed the mark" and TV service pricing that was not as beneficial for the company as expected. He called Windstream a "long-term" story and touted his company's 5,000 contracts for fiber to cell towers and its 18% increase in cloud services.

Cramer told viewers that Windstream is indeed a longer-term story and they should be paying attention to it.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer once again reminded viewers that execution matters. Take the huge miss in earnings at Lowe's ( LOW), compared to the stellar performance of rival Home Depot ( HD). Cramer said he's giving the home improvement giant one quarter to turn its same-store sales around, or Lowe's CEO may find himself on Cramer's "Wall of Shame."

Cramer also touted Aetna's ( AET) acquisition of Coventry Health Care ( CHV) as a symbol of great execution while gadget accessory maker Zagg ( ZAGG) lost its CEO amid tepid sales.

Cramer said these cases are a reminder that it's worth paying top dollar for strong management.

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

To contact the writer of this article, click here: Scott Rutt.

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

At the time of publication, Cramer's Action Alerts PLUS had a position in WFC.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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