Jim Cramer 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 sea change that occurred this week;
- why you need to get in on it; and
- one way to do so.
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The Cut Has Changed the Market
Originally published on Sept. 19 at 8:20 a.m. EDT
But what about oil?
But what about the dollar?
Is it enough?
Is it too much because of inflation?
Are they behind the curve?
Is it wrong that hedge funds get bailed out?
I have no objections to any boilerplate questions about the
rate cuts. They make sense. I do, however, occasionally want to suspend suspicion and cynicism and even, yes, skepticism, for the moment after something as monumental as yesterday's half-point cut.
I say that because sometimes my job conflicts with the need to be the skeptical reporter. That's because there's an overriding need on this site and in what I do for a living, which is try to make people money. People want to know how the market will react, they want to know if it is time to buy, or too late to buy, or okay to buy, or good to sell. Those questions are obfuscators. They are theoretical. They get in the way of making money, and if answered incorrectly, they block the chance for making money.
Of course all of those issues are concerns, chiefly oil. It's not "good" that oil is going higher, even though to anyone with a car, it is obvious that it hasn't filtered through. I paid $2.60 yesterday, a dollar lower than I would think I would have had to pay given crude. Weak dollar, possible inflation flare-up, all bad.
But the simple answer is that things were not right going into the meeting. Big things. You shouldn't have T-bills so high when the 10-year is so low. That's 105 degrees on the thermometer. Those who fought 50, thinking it is too much, that it means panic, are the same people who would deny children antibiotics lest they scare the parents! It's all nonsense. Retail, autos and banks are real economy sectors, and everyone knew they were hurting.
I swear, I think there were a lot of underinvested people squawking Tuesday, pointing out all of these risks. Anyone who is truly "worried" about business can't be "worried" about a half-point. Anything that gets us to where the short-rates are lower than the long rates is a win for business and business people know it.
Why would their stocks not gravitate higher when that's the case?
When you have the CEOs of outfits like
calling for rate cuts, that means something. They can afford to offer lower-cost financing to move inventory. Strapped homebuilders could get some relief as banks are now going to lose a half-point less when they are renegotiating.
People will feel better and spend more at retail, helping a
or even the hated
. How can that not be better?
As far as whether rates can "save" homebuilders and stimulate buying, all I can say is: How can it hurt? The summer and fall are already miserable. The firesale will prove to be a blip for
, but at least a blip that shows you that Hovnanian may be solvent. So don't buy the homebuilders, but you can't short them any more.
Or how about the banks? Do you feel worse about buying
? Doesn't it make you feel better about the margins a
could have or that a
could have? I would buy them both.
In the meantime, the effects of cash rates being lower of course lowers the competition to an
, like I had on last night with its 8% yield. What a great story that is!
So, let's put away all of the theory and shelve the morals. Today's a better day than before the half point. As someone who even
The New York Times
acknowledges was the most vocal critic of the Fed because they didn't know how bad things were out there, I relent and praise.
They know something is very much awry. They had to suspend the worries that I mentioned up top because they had to save jobs. Because they had to save the economy, and anyone who thinks they didn't is simply a simpleton. Sure, if they wanted to, they could "break the back" of inflation. But things had gotten out of hand very quickly and there's no reason to cause a recession in order to try to knock down the price of oil and corn. If houses were in the CPI, you would see that their goal might very well have been to stop deflation, not stop inflation.
In sum, don't be distracted. It's not too late to buy. And if you are short or underinvested you've got to get your butt on a site, in a newspaper or on television expressing those qualms I ignore at the top of the page.
How else are you going to bring in the shorts and put money to work on a sale?
At the time of publication, Cramer was long Sears Holdings.
Why You Need to Get Back on Board the Market
Originally published on Sept. 19 at 12:07 p.m. EDT
Get on board. Here are some things you need to consider about this market.
Do you know the last time we had up/down volume like we had Tuesday was in August
? That's right: Talk about a moment when you wanted to get long.
Or how about 1990, once the
knew the extent of the problems? You are up more than 10,000 points from that moment.
Or how about 1998, when we got an emergency ease? The Nasdaq 100 rallied 110% straight out.
These are dauntingly great moments. It is tempting to admit that because you didn't buy
at $167, you have to sit this one out. Or
on the pullback. Even
, which was one horrible stock for awhile. (Notice that I am not willing to say
. That stock will tell you when it is right: when the sellers finish. They are not done.)
I want you to think about this period as one of the moments when the weak hands are shaken out, when the cash rates are going to come down and when we can join the ranks of the great European bourses, which are so much better than we are.
Moreover, I want you to think about the fact that we usually get a dip courtesy of options expiration. We might even get it as early as tomorrow. That could provide another moment to get in.
We had always felt that the urgency to get it came from guessing what the next private-equity trade would be. No more. Now it is about guessing which group will be revalued up right now.
That's what is happening with a
, say, or a
. When I said I liked Kohl's two weeks ago, it promptly went down a buck and change and I felt like an idiot -- but it was the price of being in retail for when the Fed cut.
I have no doubt that the quality retailers are not done going up, and in that I am speaking about a
, which has incredibly easy comparisons. (As with NYSE Euronext, I am not prepared to tell you to
is buyable. The hated stocks are going to stay hated until I give up on them, and I am not, so they will stay hated.)
You need to think about a stock like a
. Or a
First Federal Bank
. These are heavily shorted stocks where the short case is going to go away.
It's similar for
. Suddenly it becomes the stock with the big deposit base that will be in shape to take advantage of the massive decline in companies offering anything but the most impossible loans to get and the margins will be fantastic. If you don't believe me, consider how Lone Star didn't just drop its bid, run away and hope to win in court. That private equity firm
to be in mortgages after this decline.
Remember what happens when the sellers go on strike and the buyers have to come in because they are underinvested and can't have their year ruined by underperformance. Remember that many portfolios of "bad " bonds will now come back to life, like the portfolios of
Remember this moment. And you are going to see that those who panicked must come back in and those who didn't have no desire to go.
If you weren't shaken out by the last go-round, you aren't leaving now!
At the time of publication, Cramer was long Goldman Sachs, Caterpillar and NYSE Euronext.
FedEx Is a Buy Because of the Rate Cuts
Originally published on Sept. 20 at 10:05 a.m. EDT
: no kidding. Did we expect them to say things are better?
There's an unreal world about disappointing earnings. The unreal world stems from a belief that we can have a credit crunch and a spike in oil and the only entities that will be hurt are the homebuilders, the trading desks, KKR,
The reason I say, "no kidding" is because Ben Bernanke did not shock the system by cutting 50 basis points because he was afraid that the people in the Inland Empire would lose their homes.
Now, we know that FedEx is a notorious UPOD (under-promise, over-deliver) company. It actually did it again;
the number was better than expected.
But I want to emphasize that Bernanke sees what is going to happen. He sees the future and he knows he can alter it.
He is going to.
FedEx is a buy
Bernanke has started cutting rates. Yes, I will accede to the bears that a half-point won't do it. But next year at this time we will be appreciably lower on the short end and that will spur the domestic growth that has been keeping FDX down.
Remember the other job Bernanke has besides fighting inflation: making it so the U.S. is not the
-growing developed country on earth.
Which, sadly, it is.
I think that by tomorrow,
will take out its 52-week high and have a huge spurt when it does. That's been the pattern with
Research In Motion
. It will be with this one, I believe. By the way, this move up is off a call from Bear that says things there are better than expected, which is what we have been writing for a month on
. ... In the meantime,
continues to be the stock for all seasons.
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 TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, 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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