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:
- Whether history repeats itself, and
- Stocks that disappoint but still go higher.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Old-School Names Are Carrying the Market
Posted at 3:26 p.m. EST on Friday, May 9, 2014
Why can't they kill it already? We all know the market should be killed, that the dross in the Russell 2000 and all of these little Internet-software-as-disservice-to-your portfolio stocks should be able to knock over the rest of the market.
But it's not.
And the reason is that the rest of the market is the antidote to fire FireEye
(FEYE - Get Report)-Rocket Fuel
(FUEL - Get Report) contingent. They simply want you to go buy more Johnson & Johnson
(JNJ - Get Report) and McDonald's
(MCD - Get Report) every time they disappoint.
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You might ask, why doesn't history repeat itself, a la 2000, and again I remind you that it is. The utilities, the drugs, the foods and the industrials were all recipients of the money that came out of the Nasdaq back then.
Now the stocks that are getting the money in either have shown some real earnings power or some real dividend power. Not much is going up that doesn't deserve to. It is natural to say, "Well, it is multiple expansion," also known as the "greater fool theory" of investing. But I think low interest rates have created such a bubble in bonds that Procter & Gamble
(PG - Get Report) and Johnson & Johnson and their ilk represent terrific value compared with the rest of the world's assets.
If anything, I believe that while the rout in the "Internet of things" stocks is hideous, the procession into the Dow Jones Industrial Average, and into others that could equally fit into that 30, is orderly and not parabolic.
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The big-caps are simply backing, filling and gently rising away from the chaos of Splunk
(SPLK) and Stratasys
(SSYS) and 3D Systems
Hence the inability to kill the tape. And what doesn't kill this tape clearly makes it stronger.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long JNJ and PG.
A Market of Selective Forgiveness
Posted at 2:31 p.m. EST on Wednesday, May 7, 2014
The pressure on these momentum managers is as bad as it was in the spring of 2000. Not only are they getting crushed in their bailiwick, they are watching the old-fashioned portion of the S&P 500 levitate higher, even if the earnings aren't that strong.
Think of like this. What were the companies that stand out for reporting true disappointments? I would say AT&T
(K), Exxon Mobil
(XOM) and General Mills
(GIS). They are all screaming higher. How did the industrials do? If they are in aerospace, they are soaring. If they are old tech, they are still doing pretty darned good -- think Oracle
Plus there is incredible forgiveness. There was lots of commentary about how 3M
(MMM) missed. But it has since gone higher. Visa
(V) did miss, and it's ripping now.
But if you blew out the very metric that brought you to lofty heights as Facebook
(YELP), Concur Technologies
(CNQR) and Tableau Software
(DATA) have, you are getting slaughtered. If you even mildly disappoint on those high-growth metrics, think FireEye
(FEYE - Get Report), you are taken to the woodshed, locked in and soaked with gasoline, with a lit match thrown in.
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Oh, and If you are a high-multiple, old-line growth stock like Whole Foods
(WFM) and you guide down, you might as well be known as the organic food software-as-a-service play with some cloud thrown in -- the ultimate punishment.
It's not in the self-fulfilling phase. You have to sell what you can of the Amazons
(AMZN) and buy what you can of PepsiCo PEP, hoping that the company pulls a Mondelez
(MDLZ). You have to sacrifice your core growth principles -- if you ever really had them, because you may have been a chart-based fellow traveler -- and buy the same boring stuff that saved your butt in 2000.
History is repeating itself. It's just that people don't remember it right.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long FB and MMM.