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: How the Dow Will Fare in 2014, Part 1

Note: This is a three-part article. Please see part two here and part 3 here.

NEW YORK (Real Money) -- If you simply looked at the averages after this huge romp, you'd be intimidated by the prices, blown out by the ranges and mystified that so many stocks can go up so high in one year, particularly during a year when interest rates on Treasuries at last started going higher again.

So when tasked to make predictions for where the Dow Jones Industrial Average might finish next year, I initially struggled to see how the standard could go higher. Then, once again, as I have for so many years, I looked at the individual pieces of the Dow -- and I see, once again, upside.

Now, it can't be upside like I saw last year, and that's in part because we are not coming into the year hobbled and bruised like we were ahead of 2012. Back then, the fiscal-cliff drama and the higher tax discussion caused many to sell and to leave substantial profits on the table.

But we have something going on that we didn't have last year at this time: a genuine, not fits-and-starts, expansion, courtesy of pent-up demand, a shrewdly managed Federal Reserve and rates that are still low enough to propagate growth. In addition, we have something brand new and astoundingly positive -- an atmosphere in Washington that's not as poisonous. That's because the insurgents in the Republican Party have been thrown back in favor of a compromise and a belief that, if the Republicans just shut up, they will sweep in November because of the disaster that is Obamacare.

Must Read: Jim Cramer: Wealth From Health

While I am willing to engage in Washingtonian prattle simply to attract those who have become convinced that the government is all-powerful when it comes to stocks, I think 2014 will be a different kind of year -- one when Washington recedes and profits take center stage. I have done thousands of pieces here and on television, so it was rather surprising to me that a recent episode of "Mad Money" was perhaps the most commented one in a very long time. In it I discussed the idea that we are in a true bull market in which profits are the most important determinant of share price, and the episode included a piece in which I tried to express my jealousy of the market's affection for Twitter (TWTR - Get Report)!

That, again, is part and parcel with the notion that people have forgotten what really impacts stocks, which is how the companies themselves are doing. I have devoted a substantial chapter of my new book, Get Rich Carefully, to how stock-picking is going to make a comeback. It won't be market-picking, with its high water-mark risk-on/risk off nonsense -- and it won't be ETF-picking, as that sainted method of investing seems to have reached a peak, too.

It's not stock-picking in a vacuum. That would be wrong. The world view that you need trace out before you pick a stock is incredibly important, and if you have the wrong one you will either make less or lose money, regardless of the stock. Still, though, next year is an "every tub on its own bottom" year, and we have to judge stocks with that in mind.

Check Out Our Best Services for Investors

Action Alerts PLUS

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
Quant Ratings

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
Stocks Under $10

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
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

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
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs