This Day On The Street
Continue to site
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

Jim Cramer: In Stocks, Loyalty Is Futile

Editor's Note: This article was originally published at 7:38 a.m. EDT on Real Money on Sept. 24. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.

NEW YORK ( Real Money) --It's time to talk about the way this business really works, instead of how some less experienced players think it works.

I hadn't thought much of Apple's (AAPL - Get Report) new phones going into last week's launch, because I had read the Wall Street research that said the new models weren't going to sell well. I had no reason to disagree with that view. The analysts were certainly closer than I was. They follow Apple for a living. The three downgraders -- analysts from UBS, Credit Suisse and Bank of America Merrill -- all said they were disappointed with the phones and the pricing.

So I figured they must be disappointing.

But then, last week, The New York Times' David Pogue and a number of other assembled opinion-makers -- who collectively do determine what we buy and don't buy -- came out and said, "Buy." So I changed my mind. Said so immediately. Many of these critics had become wholesale enthusiasts for Samsung's phones. No more.

Now, in politics you can't switch like that. You will be labeled a flip-flopper. Your base will throw you out. You will lose in the primaries. Your party will not support you in the general election. You will most likely have committed political suicide.

But, in this business, if you stay negative in the face of those critics' glowing reports, you will lose money. There is no political base. There is no primary. There will be no general election. There is no flip-flop. Something has occurred that you could not have gamed: The critics really like the phone. The key to nailing these last 30 points in Apple was to change your mind immediately on the stock, recognizing that the critics, not the analysts, were in control.

That's what a good trader does. He or she seizes that moment and recognizes that the three downgraders were wrong because the phones were better than they had thought. All of their checks and approximations were wrong. Their presumptions were wrong. Because they didn't recognize the greatness of either the new operating system or of the phone itself. Or, more important, they didn't understand how powerful the critics could be. They didn't recognize that the phone was good enough to charge a premium for, which was the underlying notion of the comments by the critics.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment 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 serious 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

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
Real Money
Try it NOW

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums


Chart of I:DJI
DOW 16,790.19 +13.76 0.08%
S&P 500 1,979.92 -7.13 -0.36%
NASDAQ 4,748.3610 -32.9030 -0.69%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs