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People are getting back to even. In the last 72 hours I have spoken to about 500 investors -- or at least 500 book buyers! -- many of whom have told me they recently either got back to even, having dodged the big decline or gotten in near the bottom, or are actually up nicely because they saw the opportunity in March and rode it back up.
I always figure when you meet people it is strictly anecdotal. But when you meet 500 of them it crosses over into empirical. Here's what I saw of this particular cross-section.
1. No greed whatsoever. Almost to a person everyone who is up nicely this year has taken a lot of off the table, certainly enough to be considered prudent, if not outright cautious. Those who are getting back to even are taking money out gradually and putting it in safer, less volatile places.
2. People are speculating in the banks, mostly Bank of America (NYSE: BAC) (Cramer's Take) and Citigroup (NYSE: C) (Cramer's Take), but also have healthy positions in companies like McDonald's (NYSE: MCD) (Cramer's Take), Procter & Gamble (NYSE: PG) (Cramer's Take) and AT&T Inc. (NYSE: T) (Cramer's Take) -- hardly gunners.
3. Tech is still relatively unloved. I always ask who owns Intel (NASDAQ: INTC) (Cramer's Take), Cisco (NASDAQ: CSCO) (Cramer's Take), Microsoft (NASDAQ: MSFT) (Cramer's Take), Oracle (NASDAQ: ORCL) (Cramer's Take), knowing that those used to riddle the account bases, and I haven't found any owners. Apple (NASDAQ: AAPL) (Cramer's Take) is a widely owned name for people though and most say they got in it much lower.
4. These people are far less skeptical and far more positive than the average investor/manager who writes for this site. They are intrigued by new ideas and have no ideology of loss or bias to defeat and negativity.
5. They are not BULLS. They are people who sense the opportunity of the moment but fear that we could revisit the lows.
In short, they were reasonable people who believe the market is a reasonable place to make money who are being drawn back in slowly because of price appreciation.
Now, it can all be self-selective. When you go to a signing of my new book, "Getting Back to Even" you are going to be somewhat in synch with my views -- some would say totally in synch.
However, I think the real takeaway is that the perception that those who are buying are uninformed or Bambis in the woods would not hold up under the scrutiny of this sample.
Just something to think about as the overwhelming number of people who write for this site seem to think that this one's on its last legs or already overstayed its welcome.
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. At the time of publication, Cramer was long Bank of America, Procter & Gamble and Cisco.
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Reader Comments (Page 1 of 1)
10-15-2009 @ 12:26PM
ebrandler34 said...
Interesting point #3, especially with regard to AAPL. Despite all the "street cred" and accolades, Apple has only doubled off the bottom. Heck NYT (New York Times) did just as well, and they're a dog...
I think the case could be made that most everything you could pick up in March has doubled, and there's a longer list of stocks that have all outperformed AAPL over the past six months.
AAPL is a stock everyone likes to say they're "in", because who can hate AAPL?
But, don't forget most "gambler's" don't brag about their losing bets, so take what you hear from your adoring fans with a healthy grain of salt.
10-15-2009 @ 2:16PM
Iridium said...
Still I would like to see a market fundamental that validates the move back to even on the year. Like the financial crisis and the recession never happened. That the economy is now at the same level it was before last October. The goal for March 2010 has to be DOW 15,000.
Please, just one real fundamental. There was a great article posted by NBC proclaiming that 76 metro areas are out of recession. What was funny is that there was not one area with positive employment growth, positive housing starts, or positive industrial output. Yet they were put into the recovery category because the results were less worse than the previous month.
WELCOME TO THE WORLD OF THE LESS WORSE RECOVERY!!!
Well two months ago you lost $100 but last month you only lost $80, YOU ACTUALLY RECOVERED AND MADE $20!!!
That is Wall Street math. HELLO MORONS, LESS WORSE IS STILL WORSE. YOU DIDN'T MAKE $20, YOU LOST $180.
IF INDUSTRIAL OUTPUT STILL DECLINED, INVENTORIES STILL DECLINED, SALES STILL DECLINED, HOUSING STARTS STILL DECLINED, EMPLOYMENT STILL DECLINED, FORECLOSURES STILL ROSE, HOW IS IT A RECOVERY???
WHEN WE LOSE 435,000 JOBS INSTEAD OF 475,000 WE DIDN'T CREATE 40,000 NET JOBS. WE LOST 920,000 JOBS.
Really that is the way that Wall Street and the US government sees things. If last year they spent $200 million on a budget item and wanted to spend $300 million during the current year, but only spent $250 million. THEY CALL IT A $50 MILLION SPENDING CUT!!!
Sure we had a tiny increase in different aspects from month to month but the overall net numbers are still all down. BUT OUT OF SOME MAGICAL SPELL OF GOVERNMENT MATH WE WILL PROBABLY HAVE A GDP INCREASE!!! WHOOPEE FOR PHANTOM GROWTH!!! WHOOPEE FOR WALL STREET MANIPULATION!!! WHOOPEE FOR FRAUD!!!
Still it must be nice to forget that last year ever happened. Those 500 guys are back to where they were and can now start the unstoppable march higher all over again, until the next time they bankrupt the system through greed. Since Obama has proclaimed that all of the Tier 1 institutions are too big to fail, they can speculate even more and fall harder knowing the US government has their back.