Cramer on BloggingStocks: Sticking to my guns

Posted Apr 3rd 2009 10:00AM by Jim Cramer
Filed under: Market Matters, Gilead Sciences (GILD), Cramer on BloggingStocks, Financial Crisis

From TheStreet.com Network

TheStreet.com's Jim Cramer says it'd be easy to follow the herd and doubt the staying power of this rally, but that's not his style.

People think I am nuts . . . even more than usual. All they can talk about at the cocktail parties and the lunches and on the Street is how bad things are. They want to hide in gold. They want to hide under the bed. They think that every move is false and every rally must be sold. The negativity is so thick that even my closest friends think that I am being wishful about the turn. Oh, and heaven forbid there would be one positive article in The Wall Street Journal about this market. Just one!

Here's what I have to say. Sadly, I am not a young guy anymore. I am a middle-aged 54-year-old who has been trading since 1979, and while that may mean I have been trading wrong and getting everything wrong for 30 years, it is entirely possible -- and my bank account empirically demonstrates -- that maybe I know what the heck I am talking about.

As someone who was way out on a limb telling people to get out at 11,000 and 10,000 and saw minimal downside at Dow 6300 and just said to wade back in -- it's on tape, don't dispute it -- I feel that I have earned some credibility on this rally. I also love the fact that my good friend Doug Kass called this one, and I freely admit I rode and continue to ride his coattails. There's no pride in making money; the money is what matters.

Think about it. Never in my life have I heard an "all clear" for trading. It's never been easy and obvious. The moments of the biggest turns are called when things are darkest, not when they are brightest, and things were pretty darned dark back in September and then in March, when it seemed that the president didn't believe in the stock market or think it was significant. He got the message fast.

I am proud that my tirade about the president's lack of understanding of the 401(k)/IRA decimation -- even though it created a firestorm of criticism from the Oval Office and its media acolytes -- helped change Obama's view of the importance of what we write about here, according to my friends close to the White House.

Much has happened in the last month. I could go into all the details of the programs and the proposals, but what matters is this: We are not repeating the errors of Herbert Hoover and the Great Depression. It isn't happening. I was extremely critical of Ben Bernanke for not buying huge amounts of mortgage paper and cutting rates as low as possible. I was front and center on this. It took him from the spring of 2007 until the fall of 2008 to realize that he was off the mark, but he has roared in and saved the day. It is possible for people to change.

Tim Geithner was an unsure-of-himself former Fed boss who was inconsistent and made some big blunders during the nutty period that was 2003 to 2008 (and it is truly a shame that he has never owned up to them, as President Obama boldly did yesterday), but he has come up with a decent plan to get assets moving again. The rate reductions coupled with the mortgage bond buys of Bernanke have brought rates down to unprecedented levels, fueling applications for new home purchases and refinances in record numbers. That's how you get a housing bottom.

And it is true that the mark-to-market rules were not what I wanted. I wanted more liberalization. But what we got was just enough to dovetail with the just-enough public-private plan and the just-enough TALF plan. You see, none of these is a silver bullet. They are brass bullets that just keep being shot until some of them get through. You have to consider this battle as if it were like the movie Predator. Think how much those soldiers had to throw at that bad boy until he went down. That's what they are doing now.

Yet relatively few people believe. I have received a tremendous amount of not-so-agreeable mail (I avoided the term "hate" because that rises to the embarrassing level that a Jon Stewart feels toward me) about my stance. That, because I am stubborn, just makes me dig my heels in further.

I think this is the real deal. My gut says it, my head says it, gold says it and the bull/bear index says it. My friends, unfortunately, just don't buy it, but I am not backing down. I just want the market down.

I have some cash on the sidelines for Action Alerts PLUS and I want to get that back in before everything gets away from me.

Random musings: I own Gilead (NASDAQ: GILD) (Cramer's Take) for Action Alerts PLUS, but I think that this anti-hypertension drug will be the biggest drug they have ever had...

At the time of publication, Cramer was long Gilead. Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO.

Tags: Action Alerts PLUS, ActionAlertsPlus, Ben Bernanke, BenBernanke, Cramer, featured, gild, Jim Cramer, JimCramer, mark-to-market rules, Mark-to-marketRules, Tim Geithner, TimGeithner

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Reader Comments (Page 1 of 1)

4-04-2009 @ 4:17PM

beachpaul said...

Cramer, we going back to 9,000? Obama wants to know.

4-03-2009 @ 11:14AM

Beltway Greg said...

Yeah, but you called an all clear back in Aug. of 08 but I forgive and forget because I realize that stock/earnings projections have the half-life of a turtle on the Jersey Turnpike before a Springsteen concert at Giants Stadium. Take RIMM this morning an
easy $1.00 dollar short. I announced on the RIMM board and followed through this morning and now RIMM pays for lunch. You've been trading for a long-time but this market is unlike any other and the rate of speed that money moves today is astounding. I passed the Series 7 exam in 1989 and knew absolutely nothing about trading stocks. Investing is like being married: everyone knows how to make it succeed but many people lack the discipline to succeed and will forever play the market they wish they had not the market they have. They need to realize they are mice dancing with elephants. Look at the triple short garbage. I called this crap out in Oct. of 08 long before anyone else dumped on their bandwagon. But now that they've fallen so far, especially with FAZ, they're a great episodic day trade. "Charley doesn't surf and Obama doesn't trade" and that is a good thing and I sincerely hope what he reads on-line doesn't change his long-term views on the market. We're still in between a rock and hard place. Interest rates have got to go up and the dollar has to go down. Where will the jobs come from? Will we all work for Facebook in the future? Hard to say.

Look at it this way. The line in the sand is drawn at 8000. On one side we have Dr. Doom, Krugman and Rush. On the other side we have the Obama administration. They have words, he has the power to change policy. From what I've heard Krugman is a little miffed that he didn't get considered for a post in the administration and Dr. Doom just want to have fun if you believe Vanity Fair. I wonder if Obama will ever challenge Rush to a shirts vs. skins basketball game?

4-03-2009 @ 12:12PM

Doug T said...

Perhaps Cramer should get a little closer to the herd and stay away from frivilous cocktail parties and find out what really is going on in the world of finance.

Doug T....The mutual fund guy

4-03-2009 @ 1:53PM

ij70 said...

"Buy low, sell high."

The question is: Do you have enough money to buy all kinds of low stocks? I do not.

4-03-2009 @ 2:54PM

Iridium said...

The problem is that the stock market does not play in reality. It is true that it oversold down to the 6000 level, but now is has overbought to the 8000 level. There is nothing in the real data to support a 20% run in three weeks.

The market is a chicken with its head cut off. It runs around wildly and then drops dead at close. Every day it is the same thing.

The stock marekt was supposed to pride long term profit on investment. Over the past few years it has been run as an hourly profit machine. The long term was thrown out the window. Those who don't play are screwed by those who do and make a quick fortune. Then those who don't play are screwed when the bubble bursts and we are thrown into recession.

The stock market relies on bubbles to create fake wealth. Without the bubbles the economy would expand at a slow and leisurly pace. To the I want it now crowd the rate of return was too slow. They wanted massive returns up front to live extravegant lifestyles. All balance in the economy was lost.

SO yes you should probably get back in the market right now. If you do you will probably make a fortune. One in 5-10 years time you will lose it all again. That much is for sure. The economy can't function under the current system because there is not enough real money out there. The trillions made over the past few years was all based on debt, not the generation of income and profit. It was personal debt and corporate debt. Nobody actually made real money.

The Dow never should have gone up to 14,000. After tyhe collapse of the Dotcom era it should have been the end of the rampant speculation. Wall Street should have learned its lesson. The call of unethical greed was just too much.

4-03-2009 @ 3:22PM

Steve said...

Jon Stewart doesn't hate you, Jim. He reserves those kinds of feelings for people like Cheney and Madoff.

At the most, he probably felt (and perhaps still does feel) that you are a bit of a fraud. You need to get back on his show and prove him wrong.

4-03-2009 @ 7:46PM

winslow said...

The market today is being manipulated by various hedge funds and short term players (was oil really worth $140/barrell? Is is worth $40? No one really knows anymore....there are no fundamentals).

In order for the public to achieve equilibrium and maybe attain any modicum of growth, mortgage rates have to be offered at 3% for everyone.

4-03-2009 @ 6:00PM

rpgpa said...

"To the I want it now crowd the rate of return was too slow." Yup Iridium. if i hear one more moron complain about what effect this spewing/spending of fake money means to little johnnys education im gonna spew. This problem was born of the American "i want it now,me me me, im gonna git mine today" mentality. Do you really think Wallstreet gives a flyin F**k? Beltway... dude. lots a great stuff. You posters are soo much better than booyaa but man that was like a Seinfeld episode. Come back to me johnny...over

4-03-2009 @ 5:59PM

PandaBear said...

Cramer you got to earn your credit better than being a clock that is right twice a day.

4-04-2009 @ 4:20AM

ian_tomlin said...

"Steve said...

Jon Stewart doesn't hate you"

Of course he doesnt, he was just a bit angry.

Given "I am a middle-aged 54-year-old who has been trading since 1979" JC

Bear Stearns was a call Jim should have called right, or at least been a bit concerned over.

But has now been punished with the public hounding enough. Its time to move on every body gets things wrong - onward and upward (hopefully loi).