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Supply Can Kill the Bull, The IPO Window Lets In a Chill: Jim Cramer's Best Blogs

NEW YORK (TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

  • what can kill a bull market, and
  • how to deal with the collapse of IPO froth.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


Supply Can Kill the Bull

Posted at 3:57 p.m. EST on Sunday, March 23, 2014

It's funny how uninformed so many commentators are when they opine on what kills the bull.

They talk about higher rates as a bull killer, and that's certainly a possibility, but only when rates get so high that we laugh again at paltry dividends. We are nowhere near that. The Fed should have no desire right now to take rates to destructive levels because, as much as the more negatively oriented people whine about it, there is no real inflation in the system, save beef and guacamole, something you can take as gospel from this Mexican restaurant owner.

[Read: Walmart Sues Visa for $5 Billion Over Credit Card Swipe Fees]

Inflation is truly pernicious and has slain some bulls as the Fed crushes it with high rates.

A sudden and nasty decline in economic activity and employment can crush the profits of companies and that's always going to wreck the bull. But if you look at the 2000 dot-com crash, one of the seminal crashes of all time, that was crushed not by hard economic times -- in fact, the S&P 500 did relatively well during that selloff -- but by insider selling. That's the same kind of insider selling that we will most likely get months from now when all of these newly-minted IPOs open the gates for insiders.

Now it might not necessarily end badly. We know that there were a flood of secondaries in many of the successful 2.0 Web companies like LinkedIn (LNKD), Zillow (Z) and Yelp (YELP) and that didn't kill the technology bull.

Plus, there are enough big-capitalization stocks that have been buying stock, not selling it.

Nevertheless, the sheer number of cloud and biotech IPOs makes me uncomfortable and worried. For one, there are many aggressive acquirers out there in the cloud space, from IBM (IBM) and SAP (SAP) to Oracle (ORCL) and Salesforce.com (CRM). Why didn't any of them snap up these companies? Why didn't Workday (WDAY) or Cornerstone OnDemand (CSOD) buy Paylocity (PCTY), the company that came public this week that does human capital management software?

[Read: eBay Needs PayPal to Fight Amazon]

Why didn't LinkedIn or Oracle buy Globoforce (THNX), an employee-to-employee social recognition software platform for large enterprises? If it is as good as it says, why wouldn't Salesforce.com want it to complement some of its businesses? Salesforce.com has a robust platform for banking software, so why not snare Q2 Holdings (QTWO), which does community bank software, sold as a service of course, and which is growing at a 47% clip?

Wouldn't IBM want Amber Road (AMBR), a cloud-based software company that automates importing and exporting? That would seem to be a terrific gateway addition.

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