James J. Cramer admits that he often runs his mouth in the press and on television, but when he is out of the public eye, he finds silent solace in reading history. And what history tells him is that the alleged unprecedented times we are facing now are actually far less severe than times in the not-that-distant past.

“Have you ever thought what the world looked like to Winston Churchill in 1940?” Cramer asked the fourth annual Wharton Investment Management Conference on October 5. He said the terrorists who destroyed the World Trade Center may be a determined enemy, but the Nazis were at least as determined and were launching Luftwaffe attacks nearly daily on England. By the next year, he said, the Nazis had 100 divisions only miles from Moscow and the U.S. Army stood at a mere 200,000 soldiers.

“How many of you would have bought stocks then?” he asked the crowd. “The period around 1939 and 1940 was even worse than 1930. In 1930, we had no enemies. It was just that the government didn’t understand things like deficit spending. But in 1940, there was a world crisis and a rough economy.” Without minimizing the current crisis, both economic and geo-political, Cramer suggested that the situation now may not be “nearly as bad as many perceive it to be.”

Cramer is known primarily as the motor-mouthed voice who appears regularly as an analyst on the CNBC Network’s morning show, “Squawk Box.” He was co-founder of the magazine Smart Money and writes a column for TheStreet.com, which he also helped found.

But in his business life, Cramer was for 13 years the chief trader for his own hedge fund, Cramer & Co. After a stellar 2000 performance – the fund was up 36% versus an 11% decline for the Standard & Poor’s 500 Index – Cramer left the fund and decided to become a journalist and market commentator.

He had, he said, been a long-time bull when the market was roaring and concedes that we have been in the midst of a bear market for the last several months. But, given his read of history, he thinks it is time to be a reconstructed bull – one who is optimistic, but not about everything.

He does draw heart from the performance of major retailers. “Forget about the consumer confidence survey or the ABC-Money Magazine report.” For his part, Cramer has been following three stocks – Home Depot, Wal-Mart and Kohl’s – that he says are better indicators of what the average consumer is actually buying. “The stocks are all flashing bright green. All three are higher than they were before September 11 … It seems the consumer is spending at a greater clip than he was before the terrorist attacks.” Other signs of what seem to be an economic slowdown may well be overblown, he added. The production cuts by the auto industry, for example, are merely a “rebalancing of inventory.”

On the other hand, Cramer said, some alleged stimuli to the economy are overblown as well. The $300 instant tax cut rebates that Americans received this summer, he suggested, are not worth as much as, say, the cut in gasoline prices. “I paid $1.05 for a gallon of gas the other day in central New Jersey. Compare that to the $2.10 I paid in the summer. That’s a tax cut with more resonance than $300 from the federal government.”

He noted that gasoline has not been the only commodity to fall in price. Copper, he said, is at two-year lows. “And aluminum, you can’t give aluminum away.” Only the cereal-makers are pushing prices higher, “and that is a strange case, but that’s about all you can find going up.”

In that environment, he said, it is hard to be anything but optimistic that the bear market is about to end, even though there will continue to be concentrated bear markets in certain areas. He sees little chance that the telecommunications sector will be back any time soon. He estimates that the major telecom companies have $500 billion in debt – which is $100 billion more than the savings and loan companies had a decade ago – and there will be no similar bailout for them. He also sees no real pick-up in demand for personal computers and predicts a shakeout in which some manufacturers will go bankrupt.

Cramer noted that technology was 28% of the Standard & Poor’s 500 Index 18 months ago and is now only about 15% of its capitalization. He is encouraged that the financial sector is the leading one in the S&P Index because he feels that area can most effectively move the market ahead.

While there is a chance that the United States will be stuck in a slow-moving economy for a while, it is unlikely that it will follow Japan’s course, in which the markets are back down to levels last seen nearly two decades ago, Cramer said. “This is a second-chance country. In the United States, we admit defeat, crush the debt and start over on new successes … We love the rags to riches to rags to riches story. Japan hates that part of our culture. But that keeps Japan down, and it is why America seems to always come back.”

Cramer said he is keeping his own money moving, staying mostly out of cash and into certain kinds of stocks. Health care stocks, for example, are his defensive play because people will continue to pay for good health care. He is investing in financial stocks, particularly ones without brokerages, because the brokerage business is overstretched. And he is also investing in stocks that are candidates for rebound from September 11’s severe pullbacks. He highlighted companies like United Technologies and IBM, which have good products and were hit badly in the market after the attacks.

Only half-jokingly, he advised the audience not to watch too much CNBC or read too much of the popular financial press, including his own TheStreet.com. Too many people who appear there, he said, are scripted and don’t give enough information to form a basis for real analysis. “It is ironic that the greatest stock bubble coincided with the greatest amount of information available,” said Cramer, referring to the burgeoning of the financial media and access to data on the Internet. “I always thought this would be a good thing, but maybe it was not so good.

“If you are going to give your money to a manager, then stop paying attention to all this stuff all the time. People don’t have to check their portfolio on the Internet every hour. Before, people were paying too little attention. Now they are paying too much.”

If an investor wants to keep tabs on something, look at where America shops. “If Lowe’s and Wal-Mart and Best Buy are all telling you that people are buying again, then that is information you really want to use,” he said, exhorting the audience to be vigilant about their portfolio, but use real information. “If your stock analyst has had two bad years, maybe it’s time for him to go back to law school.”