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Apr.03
9:26 PM ET

Jim: I have watched almost every Mad Money episode over the last four years and would like to thank you and your staff for all that you do. I heard your reasoning for Sears Holdings' [SHLD  Loading...      ()   ] recent price action on “Street Signs” the other day, but can you justify its valuation? Earnings have been trending lower for a few years now, there seems to be little potential for growth, and they have increasingly negative free cash flows. I can't get my head around it. Am I missing something, or are all the SHLD longs crazy? --Asif

Cramer says: “First, Asif, there’s a tremendous short position in it, including a lot of naked shorting, which this new SEC’s going to get rid of. Second, remember, despite all those revenues it is only a $6 billion company. So the market cap’s very small. I still believe that Eddie Lampert will pull it off. But because of the housing crisis I chose not to ride it down for people. But I will say this: If you think that housing’s going to come back and come back strong like I do, then owning Sears stock wouldn’t be such a bad idea. And the balance sheet’s not nearly as bad as you think and their credit line is solid.”

          ___

Jim: While the market has been impressive as of late, that leaves a big question for those of us who were burned in the dramatic decline and who haven't participated in this most recent rally. I know you say that we shouldn't chase and we should wait for pullbacks, but at what point do we jump in - especially considering pullbacks are now rarely occurring? Where do we latecomers start? --Lee

Cramer says: “Traditionally in a bull market, Lee, you wait until a 3% to 5% pullback to start, and a 5% to 8% pullback to be all in. I’m using bull market rules because we are in a bull market.”

          ___

Jim: Have you seen the video to MIA's "Paper Planes"? I feel a lot dumber after having experienced it, so maybe you can help me. Will Terex [TEX  Loading...      ()   ] continue to wallow, or is there a chance for some gains? Thank you and keep up the great work! –Mark

Cramer says: “No, I don’t like Terex. I don’t like the balance sheet. I don’t like Manitowoc. I care about balance sheets here, which is also why I said I don’t trust Hartford [Financial Services Group] [HIG  Loading...      ()   ], I don’t trust Lincoln National [LNC  Loading...      ()   ]. When the balance sheet’s in question and when we’re not out of a recession yet, these companies can still go lower. So, no thank you Terex. It’s just too dicey. Why not own Caterpillar [CAT  Loading...      ()   ]? If you want dice, CAT could always cut its dividend. I would buy more.”





Cramer's charitable trust owns Caterpillar.

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