Two False Themes

Two ideas are propping this market up: the trillions on the sidelines "waiting to come in on the all-clear" and "the explosion upward in the economy when all of the stimulus kicks in."

I am questioning both assumptions.

First, money in this market never waits on the sidelines unless it has no intention of coming in. There are plenty of stocks that fit the depiction of what "works" in this market and should be getting a super premium given their growth rates. I am not just talking Research In Motion (RIMM - commentary - Cramer's Take), which I chronicled last night as selling at half of its growth rate. I know there is great skepticism about that growth rate even though I think it is real. Nor am I talking about the year-over-year growth rates in online education, although, again, they were called into question by some research Doug Kass discovered that made you a quick couple of thousand dollars if you bought near-term puts on the group, even though I think the broad secular trend upward is pretty clear.

No, I am talking about the Pepsi (PEP - commentary - Cramer's Take) / General Mills (GIS - commentary - Cramer's Take) / Kraft (KFT - commentary - Cramer's Take) mob, which is going to do well year over year because of the dramatic decline in raw costs. Corn is way, way down. Transport is plummeting in cost year over year. The paperboard and cellophane costs are based on petrol in one form or another, and they are going to be way down. When you couple the price increases with the lack of trade down -- some, but not nearly as much as one would expect -- you get a great growth story. Yet the mutual funds don't care.

The drug stocks with momentum -- Celgene (CELG - commentary - Cramer's Take), Genzyme (GENZ - commentary - Cramer's Take), Abbott (ABT - commentary - Cramer's Take), Johnson & Johnson (JNJ - commentary - Cramer's Take), Gilead (GILD - commentary - Cramer's Take) -- similarly trade at discounts to their long-term P/Es. Nobody cares either. Given the short- and long-term pricing of Treasuries -- I don't care which discount you use -- we should be at historic PREMIUMS, not discounts. I think that's because no money is around. It's not coming in, it's going OUT. That won't reverse on a dime. It might not reverse for years.

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