This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Jim Cramer's Best Blogs


Just a Hated Asset Class
Posted at 3:03 p.m. EDT, Wednesday, Aug. 25

I hear it on the show all the time: What's the matter with this stock or that stock? I read it on Twitter, "Jim, what's the deal with ..." and then a name of a stock. The tone of the queries is, "Why did I buy this? What's the problem?"

Of course, the answer should be obvious, but that's only because I follow so many stocks: Everything is going down, which is why you need the conviction to sit through the pain and buy more, or use oversold rallies like today to lighten up if you can't take the pain.

Let's take the case of Cirrus Logic (CRUS), one I am asked about all of the time. Why is it going down? Well, heck, the Nasdaq is going down. Why can't it buck the tide? Nothing can buck the tide unless it has a nice yield with a dividend that can be boosted.

"Why do I own it, then?"

You don't have to own anything. People are selling like mad. The bull case for CRUS is that it is involved with Apple (AAPL) and it has smart grid exposure. Both trends could last for years, and the company is not a large-cap company yet.

The bear case? It is a stock. Stocks are going down.

Now, periodically some stock without a dividend can fight its way through the gloom, as Salesforce.com (CRM) did recently. But think about all of the following things that happened to make that work:

  1. The company had accelerated revenue growth (and I don't know any other tech company that had that).
  2. The company is the dominant cloud play, where every tech company wants to be. They all want to be CRM. They can't be.
  3. The new product rollouts are aggressive, and new products drive second legs of tech stocks. Always have; always will.

That's an awful lot of drivers. So remember, if you have a stock that is going down, make sure you like it enough to buy more. Otherwise, accept your fate: Stocks are going down because they belong to an asset class that is very out of favor -- and getting more out of favor. Not much more to it!

Random musings: Totally impressed by the way retail holds in. Kohl's (KSS) and Costco (COST) are having two of their biggest days in ages. Sears (SHLD) in a big bounceback. Someone must be short this group.

At the time of publication, Cramer was long Apple.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,986.32 +66.73 0.39%
S&P 500 1,987.68 +6.08 0.31%
NASDAQ 4,531.2250 +3.7110 0.08%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs