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In This Market, Be Cynical Not Close-Minded

“On a day like today, where the Dow soared 208 points and the S&P rallied 2.2%, it's clearer than ever that we need to move past the pessimism which has kept so many people on the sidelines and out of huge gains,” Cramer said Monday. “Yet all we hear about are the negatives, [and] you never how you could have triumphed over them.”

There is a reason for that seemingly constant bend toward negativity, though, he explained. After both 2008 and 2009—and even part of 2010—we’ve been conditioned to fear the next big disaster.

2008 saw the rapid decline of housing, Bear Stearns’ sale to JPMorgan Chase for a measly $2 a share, a commodities collapse that crushed the related stocks, mortgage lender IndyMac’s placement into an FDIC receivership and the collapse of the some of the biggest bellwether companies of the finance world: Lehman Brothers, Fannie Mae and Freddie Mac, Washington Mutual and Wachovia, to say nothing of the troubles at AIG.

2009? Well, that year wasn’t all the better. Nationalizing banks was a regular topic of conversations in the first quarter, Bank of America needed a bailout, General Motors declared bankruptcy, unemployment hit 10%. Then this year gave us the European debt crisis, the SEC’s fraud charges against Goldman Sachs and BP’s Gulf of Mexico spill.

Given these events, Cramer said, it’s easy to understand the negativity. Still, there were ways to make money in spite of this chain of crises, namely through the high-yielding dividend stocks that Cramer recommended. And don’t forget about the fact that Apple doubled, Salesforce.com more than doubled, Ford’s preferred shares tripled and Cirrus Logic quadrupled.

Not to mention, we survived all of the above catastrophes. So what is called for, even in the face of the past two and a half years we’ve had, is a healthy dose of skepticism, Cramer said, not pessimism.

“Scrutinize the negatives, but don’t dwell on them,” he said. “You can be cynical, but don’t be close-minded. Instead, focus on the fact that in each case these negatives, these crises were resolved to the positive. And you could have profited off them if you owned the right stocks.”

When this story published, Cramer’s charitable trust owned Apple, Bank of America, Goldman Sachs and JPMorgan Chase.

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