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NEW YORK (TheStreet) -- The market's weakness has nothing to do with the companies you're buying. The weakness is caused by hedge funds, initial public offerings and foreign money, Jim Cramer said Tuesday on Mad Money.
Cramer said he's had a hard time figuring out why two of his favorite stocks, Time Warner (TWX) and CBS (CBS), have been ravaged by sellers. Time Warner has a terrific dividend, it's buying back stock and it's pumping out hit programs one after another. Meanwhile, CBS is a hit machine, churning out series after series that are huge hits around the globe.
But then the news came out Tuesday of a major hedge fund returning nearly $2 billion to shareholders after huge redemptions. Two of that fund's major holdings were, you guessed it, Time Warner and CBS.Then there's the selling pressure coming from too much supply. Cramer said that stocks are, after all, supply and demand driven. With so many new IPOs hitting the street and the lockup period for older IPOs now expiring, the flood of stocks for sale is simply too much for the market to handle. Finally, Cramer said he's seeing huge money flows out of Russia and into U.S. bonds, something that's driving bond prices higher, making money managers think things are weaker than they really are. Add all these market moving forces together and the traditional relationship between stock prices and earnings has become distorted, which is why things are so confusing, Cramer concluded.
An Impressive OracleThere always a lot of armchair quarterbacking surrounding famed billionaire Warren Buffett and the holdings in his Berkshire Hathaway (BRK.B) conglomerate. But while many are critical of Buffet's holdings, Cramer said that overall he's impressed. Among Berkshire's top holdings are some stocks Cramer owns for his charitable trust, Action Alerts PLUS. They include IBM (IBM), Procter & Gamble (PG) and US Bancorp (USB). Cramer said all three of these companies are solid performers. Other Buffett holdings include Wells Fargo (WFC), a leader in returning capital to shareholders; American Express (AXP), another financial that survived the downturn fairly unscathed; Exxon Mobil (XOM), an oil giant with a great buyback program, and DirecTV (DTV), which is up a nice 13% for the year.
Among Berkshire's top 10 holdings, Cramer only found two, Coca-Cola (KO) and Wal-Mart (WMT), of which he's not a fan. That said, Coke is still a growth name overseas and Wal-Mart seems to have stabilized its decline, so even they may have an pretty good 2014. Cramer said he's a buyer, not a seller, of Buffett and his eye for value.
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