This column was originally published on RealMoney on June 12 at 11:38 a.m. EDT. It's being republished as a bonus for readers. For more information about subscribing to RealMoney, please click here.

When I used to trade "versus" the bonds, meaning that I would take heed of them, I would often marvel at how quickly the market repriced the long-term risk of stocks. We like


(CELG) - Get Report

knowing that the 2012 earnings could be great, but we hate Celgene because if the bond trajectory continues, we won't pay $50 for those earnings.

You see the only way to value these long-term assets, meaning stocks we buy for earnings way in the future, is to figure out how much we will pay today -- and many people use the bond market to gauge what they will pay. As rates go up, we pay less for the outyears.

That's what you see right now. Only low-multiple stocks will get a boost here, if there is one, and anything high-multiple gets crushed.

The good news here is that there really isn't that much difference between 4.5% and 5.25% -- the 10-year's range.

The bad news is that there is a difference between 5.75% and 4.5%. That's just a quantum leap that will play havoc on this being a way to figure out those future earnings.

When you overlay the technicals -- will we take out the


low of last week? -- and you decide that interest rates are too much on the move to make any discount rate calculations, you just sell. You sell the very high growth stocks that you normally would buy.

That's why I say again,

just follow the 10-year. Until it settles, even if it settles at 5.5%, I would go right back to growth. But if we get to 5.75%, the majority of people out there will use 6% and at 6% on the 10-year you are going to get tons of money out of this market and a lot of people who truly don't want to own long-term growth stocks.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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