If you want to participate in the rally that went on Tuesday I have a very specific suggestion: Don't do any homework. And don't listen to any conference calls. And don't pay any attention to the Q&As about credit and where it is going to come from and how quickly stretched balance sheets became because of all of the huge buybacks that were going on for so long.
Make sure you only follow Apple (NASDAQ: AAPL) (Cramer's Take), Google (NASDAQ: GOOG) (Cramer's Take) and Verizon (NYSE: VZ) (Cramer's Take) as they had great quarters. Don't listen to Occidental (NYSE: OXY) (Cramer's Take), where the always honest CFO Steve Chazen lays it all out, lays out how so many oil and gas operators will be broken by this decline and the lack of financing available. Don't listen to Whirlpool (NYSE: WHR) (Cramer's Take) where you would learn that the worst recession in appliances in three decades is now morphing into the worst ever, and GE (NYSE: GE) (Cramer's Take) is still trying to sell its appliance division.
Don't listen to the cliff-like falloff in orders from an industrial outfit like Crane (NYSE: CR) (Cramer's Take). Certainly don't contemplate what Caterpillar's (NYSE: CAT) (Cramer's Take) order book looks like or Masco's (NYSE: MAS) (Cramer's Take) for that matter.
If I didn't do any homework here is what I would be thinking: 1. We are down way too much and things aren't that bad; 2. The governments everywhere are coming to the rescue; 3. Things have to be better three to six months from now, so buy 'em.
That's really the rationale for buying, and I respect it. It is compelling given that we are so oversold and people are so negative.
But then when I take the stuff home and listen to the calls, I get the sense that we, we the stock market people, are totally irrelevant and completely wrong about most things involving business right now. There's the right perspective of OXY's Chazen, which is that if you owe money you could be dead. Just dead. If you don't, you just might make it. Way too sobering for this guy.
When I see the futures down this morning I regret that I did the homework. I want to buy 'em!
Now with the homework, it's the other side of the equation that I want to play in.
Drats!
It's so easy to be a bull when the market's spirits kick up like that.
Maybe the secret is to do no homework? It never worked before, but maybe this time it is real different because everyone tells me that after Tuesday's rally it is a whole new ballgame.
If only that were the case.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long General Electric.
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Reader Comments (Page 1 of 1)
10-29-2008 @ 9:19AM
nick said...
Bought those Wachovia stocks like you said now I'm in the bag. With your expert advice when do I dump GE stock?
10-29-2008 @ 4:22PM
beachpaul said...
Jim, you need to go to the stock detox, Hedge Hill, for thirty days and dry out.