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Debunking the Myths

Cramer puts to rest the Super Bowl indicator and the January effect.
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Two things should be put to rest immediately today: the Super Bowl indicator and the January effect. The former is a cinch: Even though people tried to resurrect it today, if we come in and the Broncos win on Sunday, we are going higher.

The latter, though, is devastating. For years, we have had to endure studies and so-called empirical evidence that small stocks are the way to go in January. They are supposed to get their lift as tax-loss selling abates.

Oh well, that's now garbage. The small-cap stocks, the


, the little guys, they stunk up the joint just like they always do. In fact, the only thing that generated performance for real is the same thing that worked last year: the biggest tech of the biggest tech.

From now on, all I will care about in January is what worked in December. Because in January, the mutual funds that did well last year get all of the money, and they put it to work in exactly what they liked last year because that is what worked.

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In other words, the meek may inherit the earth, but not in January.

Random musings:

Has anyone ever seen anything like the atrocious end-of-the-month marking that went on


(CSCO) - Get Cisco Systems Inc. Report

today? Outrageous. I had to sell some.

James J. Cramer is manager of a hedge fund and co-founder of At the time of publication, his fund was long Cisco, though positions may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending an email to