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NEW YORK (TheStreet) -- Investors who are focusing only on Vladimir Putin are missing the point, Jim Cramer said on "Mad Money" Tuesday. When it comes to investing, profits matter. They always have and they always will.
That might seem like a foreign notion to many investors, however -- the Wall Street hedge fund machine isn't bound by logic. Cramer explained that big fund managers need to make money whether the market is going up or down, so they're constantly on the lookout for negative news as much as positive news.
A typical day for a hedge fund manager would start out in Russia, said Cramer. But without any bad news from Ukraine, the managers probably quickly turned to China. Unfortunately, there wasn't any bad news from China either, sending managers to scour the rest of the usual subjects, including Europe, Japan and the emerging markets.But with a bad news shortage in most of the world today, that left managers to turn back to the good old U.S., Cramer continued. Housing starts and permits were right in line and the consumer price index showed only a modest 0.1%. Then, and only then, were fund managers convinced that today was indeed a good day to buy stocks instead of shorting everything. And that is how the markets were able to rally, Cramer concluded.