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Market delivered big messages, including a good buy

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

If you dig down into Thursday's market, Jim Cramer says you'll find some powerful messages. That includes an opportunity to buy Rite Aid.

Starting with the broader message, Cramer says too many investors believe Thursday's gains in the S&P 500, as well as the triple digit rally in the Dow Jones industrial average, were all about the ECB rate cut or the intensified chatter about Sprint merging with T-Mobile as soon as this summer.

Of course, both developments influenced gains, however, Cramer says they pale when compared to new comments from widely followed hedge fund manager David Tepper, who effectively said the concerns he voiced about a month ago had been alleviated.

In other words, "it is no longer 'nervous' time and the market must no longer be kind of dangerous in a way,'" Cramer said referring to comments made by Tepper in May.

NYSE EuroNext flag hangs outside the NYSE.
Adam Jeffery | CNBC
NYSE EuroNext flag hangs outside the NYSE.

Cramer found the message very powerful, but not in ways you might otherwise expect.

Although Tepper's positive commentary certainly provided another reason to feel bullish, moreover, Cramer saw it as a referendum on a stock strategy he's advocated for quite some time. "It reminded me how important it is to be your own guru," Cramer said.

That is, if you do thorough homework and identify a company with good management, a strong competitive position, solid financials and significant opportunity, you should follow your heart and scale into a position, strategically.

Don't let others make the decisions for you. "Know how you feel about stocks. Know why you like them," Cramer said.

If you had entered positions due to conviction, "you had a chance to buy more of your stocks on the Tepper inspired weakness. In just one month you probably would have had remarkable returns," Cramer said.

Taking the thesis one step further, Cramer believes it can be applied right now to shares of Rite Aid, that is, if you believe in the drug store stock as a long-term turnaround story.

Shares declined on Thursday after Rite Aid lowered its earnings expectations for fiscal 2015 due to higher-than-expected drug costs and reimbursement rate reductions in its recently concluded quarter.

However, just like David Tepper one month ago, Cramer thinks commentary from Rite Aid is generating a similar 'buy the weakness' opportunity.

"Here's the skinny. Rite Aid's gotten into a relationship with a drug wholesaler that caused the hit to earnings. But when you dig down into the story you realize that this issue is an anomaly. In the meantime the company reported fabulous May same store sales numbers, thereby convincing me that the turn is very much on track and then some."

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Therefore Cramer thinks the decline is a big opportunity, " In fact, this may be the best single buying opportunity in Rite Aid you are going to get," he said.

"Again, be your own guru," Cramer said. "If you believe in Rite Aid, this is an opportunity. Trust yourself. If you verify your outlook with homework you will do just fine."




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