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Cramer: What to do as Street turns on JPMorgan

On Wednesday, shares of JPMorgan traded lower as Wall Street digested concerns about the health of its renowned CEO Jamie Dimon.

One day earlier, in a note to staff, Dimon revealed that he had been diagnosed with throat cancer which will likely call for about eight weeks of radiation and chemotherapy at Memorial Sloan Kettering in New York City.

"The good news is that the prognosis from my doctors is excellent, the cancer was caught quickly, and my condition is curable," Dimon said.




Ron Antonelli | Bloomberg | Getty Images

Although nobody enjoys making stock decisions based on the diagnosis of such a horrible disease, Jim Cramer always tells investors to watch for an unexpected turn of events and then determine if the thesis for owning the stock has changed.

And Dimon is a big reason for owning JPMorgan stock. "He's a revered banker," Cramer said. This is, unquestionably, an unexpected turn of events. What should you do?

First, looking at the release, Cramer thinks investors can find solace in the language used by JPMorgan. "They're saying it's curable. I don't believe they would make that kind of statement unless the doctors had given a huge amount of assurance that things will turn out well. The stakes are just too high."

Also, Cramer says in the past when other noteworthy CEOs were treated for curable forms of cancer declines were short-lived. "There was the 1995 admission from then-Intel CEO Andy Grove; the 2010 statement from Bob Benmosche, CEO of AIG; and the 2012 announcement from Warren Buffett at Berkshire Hathaway. All three proved to be buying opportunities," Cramer said.

On top of that, Cramer added that even if events take a terrible turn, JPMorgan has a strong bench of executives underneath.

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All told, Cramer does not think events will harm shareholders in the long-run. Therefore, if you had been bullish, you should remain bullish.

"Personally I view JPMorgan as a quality franchise that I think is very cheap versus the overall market," Cramer said. "I also view it as a proxy, not so much for Dimon's management but for the U.S. and world economy, which I think is improving. The circumstances behind the decline are horrible, but I think the stock is a buy on any material weakness including this difficult news."

Call Cramer: 1-800-743-CNBC

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