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
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Coping With Wall Street's Fickle Nature; Yellow Flag for the IPO Hoopla: 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:

  • how to cope with reversal after reversal on Wall Street, and
  • what the IPOs of the moment mean now and in the long run.

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


Coping With Wall Street's Fickle Nature

Posted at 2:13 p.m. EST on Tuesday, April 1, 2014

Did someone just flip a switch? Did everything that was bad last month just get better? Could the market really be this stupid and forgetful?

You bet it can. Because the market is made up of money managers who all have their own motivations, and they can be as mercurial as all get-out. Something that seems valueless at the end of the quarter can become valuable overnight, because the buyers don't mind returning to the shunned, now that a discrete grading period is over and a new one has begun.

[Read: Here's Why the Fed Isn't Hiking Rates Anytime Soon]

I always want to keep in front of you the rules of the game, the way money managers think, because if you know why they think that way, you can make more money when they pull their shenanigans. One of the key principles of most managers who show their holdings to investors is that they never want to be out of step with the times. As I have said over and over again, the previous quarter amounted to a rotation out of the hottest leaders of 2013 -- the biotechs and the high-valued technology companies -- and into the old-time pharmas, the soft goods, the industrials and lower, value-added tech.

So we saw a slaughter of many a market leader during this period, despite excellent quarters and lots of good news. At the same time, there was an endless progression higher in industrial stocks, as the group-think about the turn in the economic cycle worldwide allowed the endless buying in companies such as Caterpillar (CAT), Ingersoll-Rand (IR) and Alcoa (AA), among others that simply became loved.

We saw the same with value tech, such as Intel (INTC), Microsoft (MSFT), Oracle (ORCL), Seagate (STX) and Western Digital (WDC), just old-fashioned yesteryear tech that got dusted off because it had become too cheap compared with the newer, hotter stocks that had been leaders, chiefly those that celebrated mobile, social and the cloud. Salesforce.com (CRM) had become a whipping boy, as had Google (GOOG) and Facebook (FB). You could barely look at these, and if you did, you were rubber-necking wrecks on the market highway. 

In the meantime, stocks such as Eli Lilly (LLY) and Merck (MRK), companies thought to be left for dead in the pharma space, roared higher, and Celgene (CELG) and Gilead (GILD), thought to be of the highest quality in the land, languished or were slaughtered.

[Read: Google Slumps After Founders Issue Non-Voting Shares]

Of course, it didn't help the highly valued techs or biotechs that we got new underwritings in their spaces pretty much every day in the last month, and lots of left-for-dead -- deservedly so -- biotechs came back to life in a speculative frenzy.

You have to understand that in that environment, you simply didn't want to show that you owned anything that had gone out of fashion in the Wall Street fashion show. You can only imagine someone saying, "You mean you held on to Yelp (YELP) and rode it all the way down from $100 to $79? What kind of idiot are you?" Or, "You kept Facebook after that moronically stupid WhatsApp buy and then the dumb-as-all-get-out virtual-reality joke of a waste of $2 billion? Did you go to college to get stupid?"

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management 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 extraordinary 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

Jim Cramer's protege, 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
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs