Oh boy, I hit a nerve. My last two days of donning the bear suit and imitating the bears has brought on a cacophony of critics, all of whom think that I am attacking them personally! That's right, they think I have read them, seen them and heard them and that I am spoofing them or making fun of them.
Moreover, they think that I am wildly bullish and that I am mocking them for not wanting to buy things here.
In reality, what I was simply saying and have been saying is that the spin on news has cost you money. The news backdrop of good car sales, good existing-home sales, good GDP, good retail sales, good industrial earnings and good pro-business political developments (anti-punitive health care reform) just hasn't mattered to some commentators. That's what I am grousing about. And I have been demonstrating, empirically, how that past spin has kept you out of big moves as diverse as those in Kohl's (NYSE: KSS) (Cramer's Take) and Lauren (NYSE: RL) (Cramer's Take) to Apple (NASDAQ: AAPL) (Cramer's Take) and Google (NASDAQ: GOOG) (Cramer's Take) and Caterpillar (NYSE: CAT) (Cramer's Take) and Emerson (NYSE: EMR) (Cramer's Take), Cooper (NYSE: CBE) (Cramer's Take) and Chevron (NYSE: CVX) (Cramer's Take).
Those are pretty much statements of fact.
What I think the critics don't get is that if we get some really awful data, like no new jobs created soon, then I think those stocks won't hold up. More important, I have switched directions away from the three-legged stool of tech, finance and oil, which I believe have stalled out here pending some sign of job growth, in favor of the four-legged chair of Procter (NYSE: PG) (Cramer's Take), WellPoint (NYSE: WLP) (Cramer's Take) (anticipating Pelosi failure), McDonald's (NYSE: MCD) (Cramer's Take) and General Mills (NYSE: GIS) (Cramer's Take). Subsequently, because of either good quarters or change in Washington, I have added Kimberly-Clark (NYSE: KMB) (Cramer's Take), Bristol-Myers (NYSE: BMY) (Cramer's Take) and Pfizer (NYSE: PFE) (Cramer's Take).
Importantly, some of the spin is of value. I criticized Warren Buffett last year for saying he wanted to "Buy America" because I thought we would crash. We did crash. We have crashed. That piece did not make you money. If he had said, "I like America and I am going to buy it when we drop 35% from here," I would have found the statement valuable. Given that my philosophy is to sell high and buy low, I found the piece disagreeable. This time Doug Kass, in a rigorous piece yesterday, disagreed with Buffett's philosophy -- we shouldn't necessarily use it as a mental prop even though it is always bullish when someone plunks down $40 billion to buy the most cyclical of cyclical rails. I don't really understand the purchase that well other than to say that someone smarter and wiser than I who is much richer than I decided that this is not the right level for a key stock in the market and that it should be bought 30 points above where it is. To me, that was enough of a statement in itself to make a difference.
Anyway, the bottom line for me is that I am neither a bull nor a bear here but I do resent the smug and smarmy people who have said that every piece of data will be bad and then when it is good they just prognosticate incorrectly again and never look back at their errors.
You know what I would do if these people worked for me at my hedge fund? I would fire them. They are too costly.
It's OK if they prattle, but they have to expect to be called out somewhere by someone who is at least secure enough in his ability to admit when he is wrong that they too deserve to feel the lash.
It hurts, doesn't it?
Random musings: Once again the futures are set up to ignore Cisco's (CSCO) (Cramer's Take) numbers. Remember the trick of this market -- rolling advances. Just figure out which group bucks today's negative trend and watch it percolate.
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 Cisco, Emerson, Cooper Industries, Chevron, Procter & Gamble and Bristol Myers Squibb.
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Reader Comments (Page 1 of 1)
11-05-2009 @ 12:18PM
ebrandler34 said...
You are mocking genuine reservations from those who feel empirically that you can't "buy" a recovery. Inflation is out there; it is just disguised and offset by lower consumer demand. Take note that everything from soap bars, to "half gallon" OJ, to toilet paper is being re-sized while maintaining the same shelf price (though I digress). This "bull market" is nothing more than a relief rally coupled with "inflation" in stock valuations. Dollars being worth less equals stocks (in per dollar costs) being worth more.
This era reminds me of Germany after World War I. In order to pay their war reparations, they massively printed money and shipped it to the Allies. For a short while, their economy recovered and just when everything seemed better they were suddenly hit with hyper-inflation as all those Marks flooded back into the consumer economy. Everything tanked, and Germany was in shambles, which of course set the stage for the rise of the National Socialist Party.
Yes, it has been a great run...but I don't want to be caught when everyone makes a mad dash for the exit...
11-05-2009 @ 1:24PM
Iridium said...
The problem Jim is that there is no real data to support the current level of US stocks. That isn't being a bear, that is stating facts.
The entire economic recovery, if there really is one, was priced in at DOW 8000.
We know that when the DOW hit 14,000 it was overvalued by at least 4000 points by the true data. We knwo in fact that the entire record run up was financed through BS easy money in the form of a credit bubble.
Nothing has changed, this entire run has been financed through BS easy money. Only this time the consumer hasn't seen dollar one of the new bubble. The bubble has been 100% financed by the federal government. This can only set up a devastating collapse. THAT IS FACT.
The people who made money during this rally have called out the bears for being stupid not to get all in. For missing out in a once in a lifetime opportunity to make a killing.
Sorry but everything about that is worng and unethical. We are willing to bankrupt the future for short term gains. What good is that? This bogus rally from the March bottom paid for by changing accoutnign rules and dolling out trillions of federal dollars has only created a false sense of propserity for a few very wealthy people.
Reality is far different. Average Americans can care less about the DOW breakign 10,000 when they are worried if they will be able to keep thier house next month.
THERE ARE NO FACTS TO BACK UP THE STOCK RALLY!!! That point isn't even arguable. All of the positive data has been manipulated. if you take away the rule changes, the accounting fraud, the cuts, and the government stimulus you end up with a very different picture of the economy.
You know the market is bogus, you have even said so. You just don't care anymore because you can make money in a bogus market as long as it keeps going up. Data that would have sent the market plunging a year ago is now sending it skyward. You have just resolved that if the market can be manipulated higher, it should be becuase that is the only guage of the economy that matters.
How can you justify the levels stocks are trading at? How can you justify 1000% increases in some stocks with a 2% sale increase?
That is why the bears refuse to admit they are wrong. Becuase they are not wrong. The prices can't be justified and they have to come down. Some invisible force is keepign the market trending higher even though every economist worth his salt knows it is wrong for it to do so.