This column was originally published on RealMoney on May 10 at 12:04 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
We are having some breathtaking moves in big-cap stocks that no one seems to be focusing on. You can't beat this 10-point run-up in
. That's extraordinary. This isn't some thinly traded tech stock. This is the real deal.
Or the 6-point ramp in
. How about the relentless rise in
which is a very big stock, in terms of capitalization.
, blowing through levels. Same with
. How about that run-up in
I point these out because when I see
not rallying on bullish news or when I see
languishing, I have to point out that these, again, are sources of funds for the breathtaking moves in the big-caps away from tech and health care.
Let's focus on United Tech for a moment, because it is most instructive. I can recall a time not that long ago when someone on television was giving CEO David George an extremely hard time about his extensive buyback. George just kept insisting that it was a good use of capital because of how the company was dirt-cheap vs. its growth rate.
Sure enough, what's making this gallop so quickly -- and what is making so many of the industrials ramp still higher -- is the buybacks, which have sopped up the supply.
Once again, demand is overwhelming supply. (Did I mention
has this kind of buyback, and I expect it to be up 20% in one week with a big buyer.) Contrast that with
, which issues stock like it is the U.S. government. I know that there has been a long-term buyback that has done some float shrinking, but the supply of Cisco is
tight. There are always sellers, including options holders. It's really hard to get traction.
You can't get a good move when supply is flooding demand (
). But when supply's been bought back, no new shares are being issued -- a la United Tech -- and there's excess cash with no stock being issued for acquisitions (again, unlike tech), this is what you get!
P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our
premium Web site, where you'll get in-depth commentary
money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice --
At the time of publication, Cramer was long Qualcomm, Sears Holdings and UnitedHealth Group.
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
Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click
here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click
here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click
here to get his second book, "You Got Screwed!" and click
here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by
TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.