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NEW YORK ( TheStreet) -- How do you sell a stock that's doing great and sell one that's doing poorly? Jim Cramer asked his "Mad Money" TV show viewers Monday as he talked about the rotation currently underway in the markets.
Cramer said that for some investors, such as Warren Buffett, buying and selling stocks isn't a matter of timing the market but a matter of choosing great companies that represent great value and just owning them for the long term. But for other investors, like those managing hedge funds and mutual funds, timing is everything.
That's why as the market begins selling the "slow and steady" stocks like those owned by Buffett's Berkshire Hathaway (BRK.B) for sexier, more cyclical stocks that will do well as the global economy recovers, these managers are finding themselves in trouble.Cramer said money managers can't afford to just have "good" stocks in their portfolios, they need great ones, ones that will not only outperform the markets but also their peers. They must prove they're flexible and can change with the markets, he said, which is why the sexy stocks continue their march higher while those stocks doing well will continue to be just OK. Every fund manager will eventually have to admit they're wrong and make the switch, Cramer concluded, and investors would be wise to follow suit ahead of their desperation buying.