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 investors should consider owning earnings growth vs. owning sales growth, and
- why Wall Street needs to watch out for "High-Multiple-itis" and "momentum denouement."
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
The Shift Makes Sense
Posted at 3:05 p.m. EST on Thursday, May 1, 2014
Portfolio managers right now are gripped between owning earnings growth at a reasonable price and owning sales growth at unreasonable price.
[Read: Berkshire Prediction: General Electric Is on Buffett's Mind]
I think the vast majority of the growth companies delivered on their promises, but the stocks had gone up so far vs. historical levels of valuation that they couldn't just keep going up. But once they stopped going up, they were of no use to the faux growth managers who had been hiding in them but never really understood them. They just liked them because they were going up.
But the growth-at-a-reasonable-price stocks have started to betray some of their investors. Clorox
and Church & Dwight
, Express Scripts
and Cardinal Health
have all disappointed this week. These were bought because they weren't supposed to disappoint.
So, Thursday we are getting a bit of a shift that makes sense when you think of it. Some of the high-flying stocks are down huge to the point where they aren't as expensive historically. Call them fairly valued, not undervalued. Some of the low fliers have become expensive historically vs. their growth rates.
[Read: Android Stinks and Apple's About to Prove It]
There's only one problem: you get three days like this and the valuations will shift again.
Oh, and don't you for one minute believe that isn't exactly what will happen in three days -- if not sooner.
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics
while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a
reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV