Editor's Note: This article was originally published at 3 p.m. EDT on Real Money on Aug. 2. To see Tim Melvin's latest commentary as it's published, sign up for a free trial of Real Money.
NEW YORK ( Real Money) -- I have often heard that the best way to hear from old friends and relatives is to hit the lottery. I have found another way to spark conversations from folks you haven't heard from in a while: Writing a column expressing a negative or cautious opinion on the stock market. It brings people out of the woodwork.
Some just wanted to let me know how foolish I was for not being fully and aggressively invested in a zero-interest-rate world and lots wanted to know what few stocks I was buying. I think I've covered the second question over the past two days, and while I appreciate the intentions of the first group, I will stick with my concerns.
Staying cautious and holding lots of cash just seems to make more sense to me than dancing with the margin clerk or being exposed to a permanent loss of capital.The third group's question was simply what about small banks. Is the trade of the decade still one? Are you cutting back on these stocks? The simple answer here is that no, I am not cutting back and the trade of the decade is still very much a go. I have lost a few bank stocks to M&A activity over the past few years, but I have not actually sold a single small bank share for fundamental reasons. If I ever do sell a bank stock that I have suggested on Real Money, it will be stated in either Columnist Conversation or a column. Older portfolios of bank stocks are currently carrying about a 20% to 25% cash level. Most of the small banks that I want to buy are flirting with the upper end of the buy range, and I am trying to exercise some patience about getting fully invested. If we get a severe market pullback that creates additional values, I will be fully invested and would even consider using a small amount of leverage to increase my stake in small banks. I have a very high degree of conviction on this group for the next five years and beyond, and I am confident that it will eventually fund my beach house.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV