Cramer: Too Much Worry Bad for Your Wallet
This blog post by Jim Cramer originally appeared on RealMoney.comTuesday.
We fret too much. We fret about whether
Apple's
(AAPL) - Get Apple Inc. Report
iPad is going to sell. We fret about every Treasury auction. We fret about
Fed
statements and discount rate moves. We fret about commercial real estate. We fret about housing. We fret about the weakness of the consumer. We fret about the impact of health care. We fret about the Chinese bubble. And we fret about earnings and earnings and earnings. We fret about unemployment.
Hey, it's good to fret. I used to fret all the time at my hedge fund. You aren't being critical and rigorous enough if you aren't fretting. It is a little ridiculous to believe that everything is going to work out just right.
However, action taken based on fretting has been, since the bottom, just plain wrong. Look at those insurers yesterday. They were all supposed to be dead meat. I had a conversation with the head of
Genworth
(GNW) - Get Genworth Financial, Inc. Class A Report
last year about whether my
insurance policy
was any good. My policy! Now that was fretting. I should not have been buying policies, I should have been buying stock -- I wish I did, but I can only buy for
. The moves in
TheStreet Recommends
Lincoln
(LNC) - Get Lincoln National Corporation Report
,
Principal
(PFG) - Get Principal Financial Group, Inc. Report
,
Hartford
(HIG) - Get Hartford Financial Services Group, Inc. Report
and
MetLife
(MET) - Get MetLife, Inc. Report
, while not as breathtaking as their declines, are remarkable, made all the more so by the hedge funds that cannot fret without taking action.
What do you think was behind
Cree
(CREE) - Get Cree, Inc. Report
being up $7 yesterday, besides that monster target boost? I will tell you. People were fretting that computers were slowing down because the consumer was too strapped. A 7-point move? That's the fretters covering from their ill-informed fretting.
How about these little banks that keep levitating? Again,
Regions
(RF) - Get Regions Financial Corporation Report
,
Huntington
(HBAN) - Get Huntington Bancshares Incorporated Report
,
Comerica
(CMA) - Get Comerica Incorporated Report
,
Fifth Third
(FITB) - Get Fifth Third Bancorp Report
,
Zions
(ZION) - Get Zions Bancorporation, N.A. Report
and
Synovus
(SNV) - Get Synovus Financial Corp. Report
are way, way down from when it was
right
to fret ... but not anymore. The time to fret was before. Now is the time to buy, because things are getting better.
There was a time when commercial real estate was supposed to devastate the REITs. The fretting was so thick that everything from
Federal Realty
(FRT) - Get Federal Realty Investment Trust Report
and
Vornado
(VNO) - Get Vornado Realty Trust Report
and
Simon Properties
(SPG) - Get Simon Property Group, Inc. Report
to the little hotel REITs and
Brandywine
(BDN) - Get Brandywine Realty Trust Report
were being smashed down. The action from the fretting is still being unwound.
Everyone fretted about apartment prices and home prices -- the latter are going up, according to the
Journal
, and the former bottomed in June of last year.
Health care fretting? What stocks are rocking here? The ones that either produce the most expensive products, like the device companies, the ones that have pricey biotech offerings, or the ones that are cost-containment plays. These were totally overfretted.
The bears could be very right about the Chinese bubble. I heard Jim Chanos warn people about
McGraw-Hill
(MHP)
and
Moody's
(MCO) - Get Moody's Corporation Report
before they collapsed. Great call. The problem is that the fretting has led to outrageous shorting in the coppers, steels, coals, iron ores, minerals -- you name it. But the bear case hasn't unfolded, as anyone who owns
Freeport
(FCX) - Get Freeport-McMoRan, Inc. Report
,
Vale
,
Walters
(WLT)
or
BHP Billiton
(BHP) - Get BHP Group Ltd. Report
knows.
Plus, we were thinking that industrial America would get hit with massive shortfalls. But don't tell that to the ones that everyone told me to get people out of --
Eaton
(ETN) - Get Eaton Corp. Plc Report
or
Cooper
(CBE)
or
Parker
(PH) - Get Parker-Hannifin Corporation Report
or
Emerson
(EMR) - Get Emerson Electric Co. Report
or
3M
-- because those companies took decisive action. We were fretting; they were cutting. They won. The fretters lost.
There was a time when you could fret and simply cut back exposure and underperform the
S&P
with a sizable cash position.
Those days are long gone. The fretters take action in a heartbeat. They short Apple all the way up. They short
Hewlett-Packard
because Apple's going to take share. They short
Western Digital
(WDC) - Get Western Digital Corporation Report
because
Samsung
lowers some target. They short
Intel
(INTC) - Get Intel Corporation Report
because Intel is supposed to go down after going up. Isn't it?
My conclusion? The fretters should worry not about FOMC minutes or soaring oil prices -- that's what the media is fretting about -- they should be fretting about fretting.
That's where the real lack of success has come from. That's why people have been, for lack of a better term, so wrong.
Random musings
: Maximum fine for
Toyota
(TM) - Get Toyota Motor Corp. Report
means maximum sales for
Ford
(F) - Get Ford Motor Company Report
. Scott Rothbort had a
great analysis on the Ford warrants
in the Columnist Coversation yesterday. ... Interesting piece on
Business Insider
found through Twitter on
housing as a depressant for inflation
. One day this number will be included in the bigger scheme and we will get a truer depiction of what is going on.
At the time of publication, Cramer was long Apple and Intel.
Jim Cramer, co-founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio,
. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.
Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he co-founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.
Mr. Cramer is the author of "
Confessions of a Street Addict
," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.
