Jim Cramer's Best Blogs
Oct 27, 2012 | 01:40 PM EDT
A Market Beholden to Fear Posted at 11:55 a.m. EDT on Friday, Oct. 26 When is enough selling enough? When do you oversell? I keep thinking of some of the quarters that were reported and how sellers came in both before and after, and how wrong the sellers were before and how wrong they could be after. I keep thinking about two different examples this week that, frankly, are horrifying to me as an investor because they show how the market is totally beholden to scared people who don't know what they fear other than the fear of other sellers. The first instance is Broadcom (BRCM - Get Report). When it reported, the quarter was a clean beat and raise, mostly because it is levered to all of the sales being made in smartphones, and Apple (AAPL - Get Report) and Samsung are its biggest and best clients. We all know it has the finest technology, and CEO Scott McGregor is highly regarded in the industry. When the company reported, it immediately ticked up, as it should have given it's the only semiconductor to deliver on expectations and then some. The stock moved to $34 from $33.50 in the few minutes between the opening and when I interviewed McGregor. I joked with him how in this market, even as the company totally delivered on its forecast, there would be someone disappointed and another one scared, so why not take some of your $2 billion dollar cash treasure chest and go $33 big for 1 million shares. It was an absurd suggestion given where the stock was going. But the next day, the stock traded at $31.50.
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