Don't Numbers Matter?

Here's a question I am pondering on an up day that was supposed to be down:

Are we rolling back the whole multiyear move? Did these earnings not happen? Did Caterpillar (CAT - commentary - Cramer's Take) accomplish nothing with all that money it made and all of the shares it bought back over the last three years? Is Terex (TEX - commentary - Cramer's Take) worth much less than it was a few years ago when it had half the earnings power? How about Deere (DE - commentary - Cramer's Take)? Is there no worldwide famine, food inventory shortage, no ethanol plans? How about Texas Instruments (TXN - commentary - Cramer's Take)? All that stock bought back, all that additional earnings power, and it is worth a fraction of what it was worth four years ago, when it has 300 million more shares and half the earnings.

Throughout the market, I am seeing these strange anomalies, where companies are worth far less than they were years ago when they were doing far worse. Were those prices all wrong? Maybe. Either that, or the earnings estimates that I have seen on all of these companies will be 50% too high.

Yes, it does seem like we are repealing every bit of the great run we have had as if the companies created no new net worth and all of those stock buybacks meant nothing. In fact, the only companies holding up at all are the ones that are earning the dividends, and the consensus for the last five years was that dividend boosts were not as good as buybacks.

It sure doesn't seem like that's the case now.

You need to look back at where the stocks you're selling now were three, four and five years ago. You need to realize either

1. how little value was really created, or
2. how the earnings estimates are a complete joke, or
3. that we are all just reacting and panicking, and the moves are just ridiculous.

Obviously, I don't want it to be "a" or "b." Seems dead wrong, but it could be "c" and yet it can still go down, because reaction, panic and redemptions are behind so many of these moves that they have made a mockery of the process.

At the time of publication, Cramer was long Deere.

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