Mad Money

Taper talk can’t derail this trend: Cramer

What propels the bull?

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

Jim Cramer sees bullish developments in the market that he thinks can withstand current headwinds, including taper fears and higher interest rates.

Specifically, Cramer thinks there's a stock shortage in the market – that is, for some stocks there's far more demand than supply.

And when that happens prices go higher. "I've got three different examples of stock shortages that can put it all in perspective," Cramer said.

Andrew Harrer | Bloomberg | Getty Images

1. First, in support of his thesis, Cramer cited gains in Exxon, which he believes has become very desirable and should remain desirable even if headwinds begin the blow.

Part of the increased demand for Exxon stems from improved production growth as well as better refining spreads. "But the real impetus for the buying is Warren Buffett's decision to make Exxon one of his biggest buys ever," Cramer added. The anointing of a stock by Warren Buffett is still one of the single biggest spurs to buying that there is. Right or wrong, Buffett's buying causes a change in mindset."

Given the fundamentals, the Buffett seal of approval and "how cheap it is, my take is the run's not over," Cramer said. And as a Dow component, a demand for Exxon could translate into a higher market broadly.

2. Cramer also noted a similar kind of trend in new technology stocks such as Amazon, Google, Netflix, Facebook and Twitter. Again he thinks there's more demand than supply.

That's due to the promise of growth offered by all these companies. And few things are more sacrosanct in this market than growth.

Therefore Cramer sees demand enduring.

"I just don't think we have enough of these kinds of companies to satisfy the market," Cramer said. "This isn't like 1999 when a new digital company came onto the scene almost every day. In fact, it's just the opposite."

3. Cramer also highlighted a lack of supply in the M&A world. That is, Cramer believes as the market marches higher, there's a growing shortage of takeover targets simply because market caps are higher.

Therefore he thinks companies looking to make a strategic acquisition will move aggressively before the object of their affection gets yet more expensive.

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"Taken individually, these stock shortages seem like isolated cases," Cramer admitted, "But taken together they seem like secular trends to me. I think it makes all the sense in the world and I think they're playing an important role in propelling the market higher."

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