Kass: The Anti-Cramer Returns
This blog post originally appeared on RealMoney Silver on Aug. 10 at 8:42 a.m. EDT.
It is clear that Jim "El Capitan" Cramer and I are in some disagreement regarding the future of both the economy and the stock market over the near to intermediate term.
Let's try to examine the primary differences so that our future polemic can be more focused.
Neither Jim nor I are econometricians, so neither of us knows exactly what trendline GDP growth will be in 2010 and beyond. We both read everything on the subject of the economy, but, frankly, we both prefer picking stocks to making economic predictions/models.What I am relatively convinced of is that, given the nontraditional headwinds and the great debt unwind, the world's economies face an uncertain outcome, which is far less predictable than in prior recovery cycles. So any discussion of valuation loses some relevance in such uncertain times. Jim is more optimistic, believing that the massive monetary and fiscal stimulus can get the economy back on a classical, reasonable and self-sustaining recovery. Arguably, to me, the S&P 500 at current levels is not now pricing in an uncertain outcome; it is likely pricing in the growing consensus and Jim's expectation of a self-sustaining economic recovery (albeit a shallow one). So, while respectful of the powerful market momentum, I would now prefer being short rather than long. Already, it's different this time, with regard to the several-quarter drop in nominal GDP, in the magnitude of the drop in real GDP and in the unprecedented drop in household net worths.
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 + 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