Jim Cramer's Best Blogs
Jim Cramer fills his blog on
RealMoney
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:
- reality vs. spin,
- the new kind of market, and
- why natural gas is so hated.
for information on
RealMoney
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Market Reality Is Stronger Than Spin
Posted at 10:59 a.m. EDT, Sept. 9, 2009
We are now up 51% from the bottom reached six months ago. No matter how much we go up, no matter what velocity we go up at, I continue to hear that this is all a rally in a bear market, unconfirmed by anything. To me it is the greatest rally I can ever recall. That's right, the greatest rally I have ever seen.
But it has no believers who are audible, at least, or noisy. No one wants to champion a market anymore. Too likely to be criticized if the market turns down,
even if you have nailed the gain off the bottom
. It ain't worth it.
Still we need to figure out how we can go up 51% in the face of the negative news flow. Here is my attempt to do so. I think it has to do with the spin on the news,
not the news itself
.
Every day we see financial news spun wildly negative, news that I spin positive, because, like in my
, I need to justify to myself why the market is taking an opposite tack to the tone and conclusions that the media has reached.
Of course, it isn't just the media. There are many on the site who agree with the media's take, and that, too, needs refutation to stay bullish, or at least to agree with the movements of the stocks on my screen. I am not a dig-my-heels-in guy, and if the news eventually cannot be spun negative, I will join my friend Doug Kass in a belief that we are done going up. But I want to refute some of the spins I see every day and state how these are issues that the market's viewing as I do.
First, the "jobless recovery." This has become the most common and perceived wisdom on earth. I question it, because, as my friend Michael Cembalist points out in his vital
Eye on the Markets
publication that I get as a client of JP Morgan, "the gap between manufacturing orders (high) and inventories (low) a predictor of goods/labor is at its highest level since 1975." Given that scenario, I cannot continue to believe that employment will stay low. That inventory differential is remarkable, just remarkable, and I cannot risk denying it. You have to incorporate the supply and demand in your thinking. It could lead to monster GDP growth and very big hiring.
"Gold's increase is a threat to the health of this market." I think gold is a tell of many things: possible inflation, chaos, lower dollar and -- this is most important -- economic strength. I don't know a soul other than my colleague
, who did that nifty opinion multi-parter recently about what ails America and what can fix it, who believes that gold's rally could be a good sign, but I am banking with Horween. Plus, do not overlook the demand side, as it is distorted by asset-class seekers. See
excellent work if you are confused by the role of ETFs to boosting gold's price.
"The dollar's weakness is a terrible sign." I hear this every day, particularly from Larry Kudlow and Steve Forbes. While I have ultimate respect for Larry Kudlow, as a stock analyst I know the truth: The earnings comparisons will get a huge boost, and stocks will go higher. M&A will also be boosted, and we are already seeing China's switch to buying hard assets from soft ones in this country, and its sovereign fund could be a huge solution to our commercial real estate problems.
"Consumer debt contraction is a disaster for retail." This is simply poppycock, even as I just heard it
one more time
articulated on the tube. In order to get a long-standing, non-steroidal recovery, we need the consumer to be prudent, not excessive. (See my
legacy of Lehman
piece). The consumer debt contraction is going hand in hand with the decline in credit card defaults. This slowdown in spending could be hurtful to the giant retail and auto sectors if inventories are heavy.
But the inventories, like the first point I made, are very, very lean. Executives in this country correctly cut back to the bone because of the financial part of the economy's reverberation on credit, which caused the mini-depression. The fact that inventories are leaner than people think means that a slowdown in consumer spending will
not
produce shortfalls and will probably produce upside surprises. The media are constantly misinterpreting this.
Just today, Neiman Marcus said it was in big trouble and is cutting back inventory. The conclusion? The high-end consumer is dead. Have they been to Neiman lately? It has changed for the worse since it went private. In fact, it has become a difficult place to shop. Meanwhile,
Tiffany
(TIF) - Get Report
,
Coach
(COH)
and
Williams-Sonoma
(WSM) - Get Report
say the opposite is happening. You know I feel that
Costco
(COST) - Get Report
and
Best Buy
(BBY) - Get Report
are also showing the same trend. Neiman is
not
a tell.
There is absolutely no sign that "Cash for Clunkers" stole demand from anything, whether it be home buys, where mortgage applications are up huge, or plain old retail. This urban legend seems to never die. I don't care. Meanwhile, auto inventories are the lowest I can
ever
recall. That's bullish, not bearish. Those are the facts.
Finally, the last canard: If economies get strong, we will have the stimulus pulled out from under us worldwide. I think the central banks have said
over and over again
that they are not taking the pedal off the metal. I have to believe them; the market believes them. Pretty simple. I think economies then catch fire after a time, naturally catch fire, and we will not have a double dip when the stimulus ends up. Double dips are very, very rare.
So, now you know how I am, and I think the market is, spinning the data. Now you know how we can go higher, not lower, as the news flow, spun so negatively, isn't negative at all.
Now you know where the buying's coming from. And it isn't over.
At the time of publication, Cramer had no positions in stocks mentioned.
A New Kind of Market
Posted at 1:30 p.m. EDT, Sept. 10, 2009
The problem with basing your investment view on the notion of a "blah" market when it comes to reaction to news flow is that a bunch of "blah" markets that churn higher is better than the one-day wonders we used to have.
For example, Europe just put in six "blah" days, but they were all
up
! So if you are sitting here saying, "This market doesn't respond to good news," perhaps you should be saying, "This market doesn't respond to good news
like it used to
."
For several years when we got big news, we went up or down 200 points in a heartbeat. I hated that pattern, because the going down was harder and heavier than the going up, and it all seemed downright phony.
The problem with betting against this dull market is that the bias is up, and we get rolling gains in sectors (see my long
sector analysis piece if you want more). To me, that means, for instance, the
Bank of America
(BAC) - Get Report
/
Citi
(C) - Get Report
/
Wells Fargo
(WFC) - Get Report
/
JPMorgan
(JPM) - Get Report
sector hasn't moved of late, it's just drifted -- but that isn't a negative cut but a positive one (I disagree with my friend Helene Meisler here) because in this market what you really have is a big move -- like in the banks -- and then no noticeable pullback as we await the next piece of news, news that typically will propel them higher, which is where they are going.
Of course, it isn't easy to discern that this may be a new market -- and even a good one -- as we see a company like
Apple
(AAPL) - Get Report
roll out a new product and
the stock goes down! But that's been the case for all the launches, all of them. We will see
Monsanto
(MON)
preannounce and bet it is the beginning of the negative preannouncement season, but we discount that
Texas Instruments
(TXN) - Get Report
and
Skyworks
(SWKS) - Get Report
preannounced to the upside. Monsanto has been a case of endless overestimation by the company in its Roundup forecast. Consider Roundup like the ultimate drug franchise that is about to go off patent and the Chinese -- the Chinese! -- want to own the market.
So we get high-profile preannouncements and doggy action in tech via Apple and we draw the wrong judgments. Sector after sector is breaking out. Just get ready for the next big move, which is typified by the resting action we are seeing in the bank stocks.
Random musings
: Congrats to
and to Bert Dohmen for their negative visions on MON, a stock that is definitively in my sell block on "Mad Money."
At the time of publication, Cramer was long Bank of America, Wells Fargo and JPMorgan.
Why Is Nat Gas So Universally Hated?
Posted at 11:14 a.m. EDT, Sept. 11, 2009
I am not stopping on the natural gas crusade, and the stocks are sure listening.
Chesapeake's
(CHK) - Get Report
roaring today, as is
Schlumberger
(SLB) - Get Report
.
Apache
(APA) - Get Report
and
Anadarko
(APC) - Get Report
are on the move.
I continue to believe that this is because of the sea change going on in Washington as the coal people are gradually pushed aside and natural gas gets a more rightful place. So it might help to remember why natural gas has a less favorable position in Washington than it does:
1
. Despite endless denials -- publicly, at least -- that Boone Pickens hasn't hurt the cause, we have a Congress that is driven by partisanship, and the Democrats despise Pickens for backing the Swift Boat ads against one of their own, Sen. John Kerry. Pickens should drop back and focus on writing checks to people.
2
. Bogus science. Somehow Congress has been fooled into thinking that there is clean coal and that the technology is ready. I have had a dozen utility companies that burn coal on my show as well as all of the major power plant builders, and we quite simply do not know how to get rid of the carbons. It's a lie, a canard and no one calls out coal on this.
3
. We have a president who could care less about natural gas and prefers solar and wind -- both unrealistic for cars and trucks -- and believes in batteries (OK, but not commercial technology) and coal. The latter is so craven as to call into question Obama's stance on global warming. Why doesn't he take coal head-on in this battle? It is not a question of raising rates for coal-based utilities. They are building a lot of coal plants right now for the future, plants that could be based on natural gas. How about a moratorium on the building of these plants?
4
. Coal is considered reliable and stable and natural gas isn't. That was totally true before we discovered vast holdings of gas in this country in the last few years. The pols simply haven't caught up with the story because the natural gas people haven't told it well. Maybe that's changing.
5
. The natural gas people have poorly spelled out the benefits of jobs and energy independence in Washington. Nothing puts people to work faster than building power plants and pipelines, but the president seems oblivious. That's the fault of the natural gas lobby. The nat gas lobby should get out the checkbook to explain these key issues.
Coal is winning. Natural gas is losing. If that's not reversed, the stocks will. The stocks say the balance is tipping. I will believe it when I see it.
Random musings
: I think
Wynn
(WYNN) - Get Report
will go to $70 on this Macau news, which is very positive. The stock has fallen behind the group.
At the time of publication, Cramer had no positions in the stocks mentioned.
Jim Cramer is co-founder and chairman 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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