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Cramer on how 3 major deals made him check his discipline

  • "Mad Money" host Jim Cramer says deal talks on Wall Street have made him more comfortable being bullish.
  • In a red-hot market, sometimes skepticism can hurt you, Cramer says.
  • With deals between T-Mobile and Sprint, Post Holdings and Bob Evans Farms and Northrop Grumman and Orbital ATK on the table, Cramer could see another leg to this rally.

CNBC's Jim Cramer always wants investors to be skeptical, not complacent, and question when the market seems like it's running too far too fast. But he's having a high-quality problem.

"Every time I feel like saying, 'Thank goodness Larry David's coming back, because you need to curb your enthusiasm for this market,' something good happens and makes me like it all over again," the "Mad Money" host said.

The first market-mover that made Cramer feel this way was "Squawk on the Street" host David Faber's scoop on Tuesday that telecom giants T-Mobile and Sprint were having merger talks.

Both stocks popped on the news, with T-Mobile shares gaining 5 percent and Sprint jumping nearly 7 percent.

But ever since T-Mobile's stock sold off on a solid earnings report, all of the big four telecom stocks — T-Mobile, Sprint, Verizon and AT&T — had been struggling.

"Then you get this news and boom, it's like a whole new world of possibilities for shareholders of both companies," Cramer said.

Several years ago, the market wouldn't have budged, writing the potential merger off as anti-competitive and anti-consumer, Cramer said.

But under a new, pro-business administration, Wall Street seems to have embraced the idea of a merger of this scope occurring under President Donald Trump.

"Look, I want to be as skeptical as all get out after this run that we've had, after this tape, after these miserable numbers that came out after the close. But then we get these kinds of takeovers and they make it hard for me to be as critical, as corroded, as sardonic as I'd like to be," the "Mad Money" host said. "More important, these deals are anything but isolated."

Cramer pointed to Post Holdings' $1.5 billion deal to buy Bob Evans Farms, an acquisition that would add an assortment of frozen breakfast foods to Post Holdings' largely cereal-based brand portfolio.

Shares of Bob Evans surged 6 percent on news of the deal even as the stock is up 55 percent for the year, confirming the market's appetite for deals.

Finally, Cramer turned to defense contractor Northrop Grumman's $7.8 billion bid to buy Orbital ATK. Both stocks went up on the news, a sign of the market's bullishness on the deal.

"Throughout the discussion of the takeover, ... one thing that wasn't even mentioned as a possibility [was] that maybe it would be blocked by the Justice Department's antitrust division," Cramer said. "This administration is demonstrating a real love of laissez-faire economics and massive deregulation, which is why all of these deals could pass muster."

In other words, concerns that these deals would limit competition and give fewer companies price control over their products have thus far gone unvoiced despite threats to consumers like higher phone bills.

That being said, Cramer acknowledged that these massive deals are fabulous for investors if the Justice Department lets them slide.

"Again, I want to be skeptical of this rally. We've had a much-too-much big move than I ever thought could happen. Some of these valuations are difficult to defend. Profit-taking would be natural to happen here. I think it's worth taking some," Cramer said. "But when you see these kinds of deals, the bottom line is that it's awfully hard to be as disciplined as you might like. When discipline constantly costs you money, you have to start worrying if your discipline's misplaced, which is why many will need the fortitude to stay in the market rather than run from it after some negative news this evening. After all, to be in has been the smart call. If the Justice Department really decides to look the other way, then this wave of mergers is still early and it will last for as long as the market keeps greeting each deal with tremendous love for the acquirer."

WATCH: Cramer rides the merger wave

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