NEW YORK (
fills his blog on
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:
- the behavior of retail investors;
- why the market's recent response to acquisitions is a positive; and
- Goldman's response to the infamous New York Times op-ed.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Is the Retail Investor Back?
Posted at 6:44 p.m. EDT on Thursday, March 22.
Is the retail investor back, or not? The other day I propounded the notion that quintessential retail stocks, such as
Chipotle Mexican Grill
keep running, and I have to believe it is because of individuals buying stocks.
But the mutual fund outflows were also pretty staggering -- about $2.8 billion in the data released today. That would seem to indicate my thesis might be wrong. Plus, my friend Bob Pisani from the floor made it really clear that the low volume is further confirmation that there really isn't much retail investing to speak of.
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But what if we are all right? What if individuals have stopped caring for mutual funds -- the love affair over because of poor performance -- and they have decided to concentrate on buying actual stocks? Is that so far-fetched?
I haven't seen any other explanation for what doesn't seem to me to be mutual fund buying. Take Apple. We know the mutual funds are underinvested in the name. We have had exhaustive studies on the issue. Doesn't that mean individuals are buying it? Doesn't that mean people think they can do better than the managers themselves, (which is something I wholeheartedly agree with)?
I think that stocks may be a shrinking asset class, but that individual stocks are actually being bought if the story is good and the product or service is loved.
Yep, this is an "out there" thesis, but unless someone has a better one, it's mine and I am sticking with it.
Action Alerts PLUS
, which Cramer co-manages as a charitable trust, is long AAPL.
The Deal's the Thing
Posted at 3:03 p.m. EDT on Wednesday, March 21.
Nothing like a market that instantly rewards companies that acquire other companies.
going crazy today because it is buying
, a generic-drug maker that was off everybody's radar screen.
Or how about
? How much does everyone love "Draw Something"? You mean you never heard of it? You never heard of OMGPOP, which they just stole for $200 million? I am now seeing this company for what it is worth: world domination of the hot games out there.
Or how about yesterday when
roared when it bought
Caiman Eastern Midstream
! Again, a public company buys something we don't know, we put two and two together, we give them the benefit of the doubt and voila, wealth creation.
? How about that company buying a competitor in Europe on what might be the cusp of a really serious recession? What happens? The stock goes to a 52-week high.
Or how about
, a professional staffing company, buying an information technology employment company and instantly adding 20% to its valuation!
I hope American companies recognize this trend for what it is: If you buy you can fly. Still another reason to like this market.
Goldman's Muppet Search Laudable
Posted at 1:22 p.m. EDT on Thursday, March 22.
Now this is the
I know and respect. This is the Goldman Sachs that I went to work for. This is the Goldman Sachs I would hire as my banker.
I am talking about the tough decision Goldman has made to find out who is calling their customers Muppets, the charge leveled by departing exec Greg Smith when he delivered his bombshell of a resignation letter to the
New York Times
op-ed page. Goldman will review email records to see who committed this violation of everything the firm has proclaimed to believe and will take appropriate action against those who trashed the firm's bill payers, the clients themselves.
Before I get into why I think this is the correct approach by a firm that says it is beyond reproach, let me just say that I thought Smith's op-ed was a cheap shot. I would not exit a place that I have been a well-paid integral part of for a dozen years and whistle blow unless I had discovered illegal, not contemptible but illegal, behavior, reported it to the appropriate authorities and then watched the matter deep-sixed by the executives who are required to look into it by law.
That might be your style, it is not mine. Many suggested to me that Smith was no more than a disgruntled underachieving worker looking for a screenplay contract, although I certainly think there was more merit to his column than that damning judgment and I can think of better ways to go Hollywood.
But once the assault is written and published in
The New York Times
you can't act as if was one giant crock, which was Goldman's arrogant first response. I was sickened by the venerable firm's blast-the messenger reaction as were many other former Goldman people whom I speak to.
My alumni friends wanted to know who viewed clients as puppets and knaves and wanted them purged immediately. The charges couldn't be cavalierly dismissed simply because the former employee might not have been a heavyweight partner. The scoundrels needed to be shown the door immediately. Such a clean breast of things has never been more necessary because there have been whole books and whole congressional hearings about how Goldman Sachs shot against clients and abused them in the name of short-term greed.
I have felt over the years that Goldman believed it was above all others because it made money when others lost it and because, if they were so greedy and so contemptuous of clients, the clients would have long since departed and the business would have gone away. That has clearly not happened, so therefore everything must be hunky dory.
Now we know that Goldman Sachs, while despising the whistle blower is at least going to investigate to see if there are people who do not fit the credo or the founding principles of the firm. I do hope that it is a chips-may-fall investigation and those who trashed the firm's clients should be exposed and fired immediately.
So, even as the initial reaction was poor form, it's never too late to do the right thing. Self-remonstration is a positive not a negative. Let's hope that those who resent their bill payers as they take advantage of them no longer get to cloak themselves in Goldman clothing.
I say here's your hat, what's your hurry and don't let the door hit you on your way out to the street.
Action Alerts PLUS
, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.