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Cramer: If This Isn’t Brilliant, What Is?

(Click for video linked to a searchable transcript of this Mad Money topic)

Jim Cramer always scours the market looking for noteworthy developments. He's just identified something that he says is downright brilliant.

"I know, I know, I shouldn't be shocked that Warren Buffett has done something brilliant again, but his purchase of NV Energy for $5.6 billion is staggeringly smart," said the Mad Money host.

In fact, Cramer sees 5 reasons that suggest Buffett may not only have made a very strategic acquisition, but that he's far more interested in long term themes than short term moves in the market.

Justin Lewis | Iconica | Getty Images

Following are Cramer's takeaways

#1 If a company has strong fundamentals, Warren Buffett isn't worried about the impact of rising rates, even if a stock is a dividend yielder.

"He knows that in the end companies are companies not stocks, and the rotational weakness that drove NV Energy down is an opportunity, not a hazard," Cramer said.

#2 Warren Buffett has great confidence in the housing renaissance and derivative investments.

"Nevada was hit hard by the housing crisis a few years ago," Cramer explained. But the downturn was temporary. "As people again buy new homes, condos and apartments, power use should soar.

#3 Buffett may have identified new opportunities to leverage.

"Nevada adjoins California, which is often short of power," Cramer said. "The location of NV Energy's plants allows it to wheel excess power to California and generate all sorts of new fees and revenues."

#4 NV Energy benefits from becoming part of the Berkshire Hathaway family.

"NV Energy has a BBB- balance sheet. It's paying 6% for borrowed money. That rate can potentially be cut in half as it becomes part of Berkshire and enjoys Berkshire's credit rating," Cramer said.

#5 The purchase reasserts Warren Buffett's belief in alternative energy.

"NV Energy has made a real commitment to renewables; its goal is to have 25% of its power coming from renewables in 2025. Berkshire can accelerate that dramatically, especially given that Nevada's the ideal state for both solar and wind farm development," Cramer said.

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All told, Cramer said there's a lot to learn from this purchase. That is, Buffett does his homework then he takes that information and forms a long-term investable thesis.

And he stands by that thesis. Therefore, unless a major catalyst suggests otherwise, Cramer thinks it's safe to say Buffett views sell-offs as opportunities. When a stock falls to a price he finds attractive, he doesn't hesitate to pounce.

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