Given the predilection of the market to go higher over the course of the last 200 years, I try to start each day by crafting a thesis on what would get the market moving up.
The pastiche for today goes something like this: Positive
announcement that will be viewed as good for both companies;
not as bad as expected and should trade up;
The New York Times
writes a visionary piece on
Internet telephony strategy.
Look, it's a start. I didn't say it would hold up.
Why bother being optimistic at all? Why not just side with the bears and sell the whole market short, banging out stocks left and right?
Couple of reasons:
- That's not what got me here. We have had many big down days followed by not-so-big down days and then bottoms. By recognizing that pattern, I have made a lot more money than I have lost.
Inflation remains low; the economy is strong. The economic backdrop remains too positive to go short big.
Things are no worse than they were a couple of weeks ago. I have detected no further deterioration in tech, which is the blood pressure of this market.
The negativity is pretty great. It is incredible how quickly the
Dow 9000 crowd reasserted itself in the last 48 hours.
We have a ton of stocks that have gotten crushed here, some to the point that they are no longer absurdly valued.
Again, I am not holding cyberhands here. I am just trying to assess today's temperament vs. yesterday's. Gotta do that every day to stay in the game.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco and EMC, although positions can 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 at email@example.com.