A Time to Sell

If you haven't sold some stuff and are worried that you haven't, you should not let the down futures market stop you from selling something. I have spent the whole weekend working on what can go right in this market and if we get it (a rate cut), the response should be to sell a lot. If we don't get it, you have to sell some anyway and be as defensive as you can be.

It is imperative that we have substantial worldwide rate cuts beginning tomorrow morning to stabilize things. I am presuming we will get them, but they will produce nothing more than a great opportunity to sell or a better one than we deserve. Without cuts, though, selling must be done too. Even into the vortex.

High-yielding stocks, stocks selling near their cash and recession-proof stocks of the Procter & Gamble(PG Quote - Cramer on PG - Stock Picks) ilk (and I know they can have earnings weakness, too, but it is irrelevant) can be held. But industrial exposure of any sort that does not fit the yield/cash prism can't be held. It has to be liquidated into strength if possible, until you have raised enough money to ride out what could be a prolonged decline.

There's no two ways around it. While I believe the Troubled Asset Recovery Program has taken the Great Depression Two off the table for now, I just don't see how we are not going to be rocked by the astounding lack of confidence and fear that faces everyday Americans and, for that matter, consumers around the world.

Is this a "sell everything piece"? I only ask it like that because I said that high-yielding stocks, stocks selling near cash and recession-proof stocks can be held, but a very large cash position is now a necessity, and should be by far the largest holding in your portfolio. If you don't want to own the kind of stock I just mentioned, then you shouldn't be in any stocks.

It is that rough out there right now. Our goal is to get through this. There's no other course. I am not saying anything different from what I said all last week. I am just trying to make it very clear that this market is going lower and it is only taking a handful of prisoners. When it gets lower we can re-examine it for some buys. But cash is the best asset here.

I am not allowed to short. Obviously what I am saying is that having a sizable short position would be a darned good thing at this moment, and that's not going to change any time soon, except when we get so oversold that we get a killer squeeze where you can start selling all over again.  

At the time of publication, Cramer was long PG.