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Jim Cramer's Best Blogs


Not Every Data Point Is a Game-Changer
Posted at 1:17 p.m. EDT, Thursday, Aug. 26

No sooner do we get the all-important key jobless claims than we are peppered with questions about what the all-important GDP number will bring. This is right after the all-important durable goods numbers and the impossible-to-top-in-importance new-home and existing-home sales.

Such is the moment of total earnings vacuum -- unless you want to count Guess? (GES) and Heico (HEI) -- and things to trade off of.

Given that it seems the only players still left are those who trade ETFs, we see big macro players lining up on every single data point. And, as I have been saying lately, they are not even lining up on the right side of the ledger -- higher oil prices are now reasons to buy health care, drugs, restaurants, foods and techs.

You know what? I don't care about GDP. It will be awful. We will be reading and hearing a lot of canned chatter on double-dips tomorrow, and I will have to laugh. Here's why: The inputs are all mixed. Some regions are good, others are bad. Some stores are doing well, like Urban Outfitters (URBN), others are doing not so well, like Guess?. Some sectors are terrific, like aerospace, where we got a great upgrade for Rockwell Collins (COL) today and a terrific quarter from Heico, both heavy with aviation. But others, like medical equipment, are plunging because of a weak quarter from Medtronic (MDT). We don't have enough evidence to refute the anti-medical equipment companies because only Medtronic is reporting now. Not enough data. So sell.

Put simply, we do not have enough information to warrant big swings or big moves. We don't know enough. We are trading on every little macro or micro data points and unimportant quarters and pieces of information, or ticks of futures, oil and copper, are being seized upon as life-threateningly important.

Plus there are so many "on the one hand ... on the other" stories out there it is hard to not be completely confused. Are takeovers a good sign for the market because of undervaluation, or are they bad for the market -- postulated by my friend Jim Stewart in a good piece in the Journal the other day -- because when they have heated up in the past it usually is more indicative of a market top, not a bottom? Is money coming out of the market a good sign in that the retail investor has historically pulled out money at the bottom? Or is that ridiculous because the retail investor has simply been pulling out money the whole time and being contrary to it has made you no money? Are price-to-earnings multiples so low that it is tempting? Or do the housing, durable goods and GDP numbers tell us that the estimates we are basing our P/E models on may be way too high?

I come back to it's all mixed. If we make a big judgment here, we'll probably be wrong. But big judgments are being made, even if they shouldn't be.

Not every piece of information matters. Not every tick should be of concern.

But don't tell that to the people who are piling in and out of sectors on no new information. They may be too busy taking action to notice!

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer, co-founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio, Action Alerts PLUS. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.

Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he co-founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.

Mr. Cramer is the author of "Confessions of a Street Addict," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.

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