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
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Jim Cramer: Think About 22 Years Ago

Editor's Note: This article was originally published on Real Money on Nov. 16. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.

Which analogy works best for trading this fiscal cliff resolution, the debt ceiling debate last year, with the hideous declines that ended the moment a deal was at hand, or the European debt talks where we figured that each midweek ECB meeting would bring better news and finally one did?

I think neither. As the president and the Speaker and their retinue start the talks today on resolving the crisis, I turn to 1990, specifically to 22 years ago right now, in 1990, when then President Bush was asking Secretary of State James Baker to hold talks with Iraq about getting Saddam Hussein to pull his troops out of Kuwait.

Believe it or not, at the time we actually thought this could happen. We actually thought that you could sit down with Tariq Aziz, the Iraqi foreign minister, and hammer out some sort of deal.

We always figured it would have to be done in secret and for some ridiculous reason we thought it would have to be done over the weekend. The shorts had been making a killing ever since Saddam had invaded Kuwait earlier that summer, with the Dow dropping to 2,350 from 2,900 as the stalemate went on. But they always feared the Aziz-Bush talks and didn't want to see that juicy 19% decline from the top be obliterated.

I was one of the shorts. I would dutifully bring in my shorts on Friday so I could sleep well over the weekend, knowing that I wouldn't have to wake up on Monday morning to a headline that says "Saddam Agrees to Pull Back, U.S. Will Rebuild Kuwait." At a certain level you had to believe he would do something rational like that. I mean, did he really think he could beat us in a war?

Fast forward 22 years. Today I believe we will see similar fears by people who are now in my shoes. You can hear their thoughts, same as mine back in 1990. "What happens if they do something rational? What happens if they find common ground? What happens if they start caring about all of the people who will be forced out of work immediately or who will have to pay much more in taxes?"

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
DOW 16,262.56 +89.32 0.55%
S&P 500 1,842.98 +12.37 0.68%
NASDAQ 4,034.1610 +11.4670 0.29%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs