NEW YORK (
) -- Jim Cramer fills his blog on
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:
- The end-of-week selloff;
- the bear case with Netflix; and
- President Obama's State of the Union speech.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Assessing the Damage
Posted at 4:24 ET on Friday, Jan. 28.
Totally indiscriminate selling today, the first real correction in a while and one that is quite ugly. It's remarkable how widespread the damage is, including stocks that should be winners in light of the protests we are seeing, such as
, even though
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We have some remarkable declines in biotechs such as
, which doesn't make sense, or
, which just reported a terrific number and is totally rolling over. Obviously the selloff in
has just rolled over into everything involved with the mobile Internet tsunami,
, where the shorts are still reeling. The saving grace, the cloud, after
verifying acquisition, has avoided the selloff, and
looks very strong.
Of course I get that
backlash is weighing hard on everything auto. But there, too, the car builds are what matters, and they are getting better and better.
The only trade that's not indiscriminate is the rally in gold, which has had a
correction, and as I have said, over and over again, that correction is through at the end of the month. Well, take a look at your calendar.
I think the market could have handled just Egypt, just Ford or just Amazon.
All three, and you get what you have in your screen: a very nasty picture.
At the time of publication, Cramer had no positions in stocks mentioned.
Nearsighted Netflix Naysayers
Posted at 10:58 a.m. ET on Thursday, Jan. 27.
The bear case in
is now centering on how they won't give you gross adds anymore! I can't believe it. The bear case is morphing into new directions. It never ends.
What people are missing is that most companies in the world would
for 20 million happy subscribers. Most companies in the world would
for their ability to distribute over many different platforms. Most CEOs in the world would cut off their left arms to have that kind of growth and that kind of satisfaction. The churn is almost nil here. So gross adds doesn't mean anything versus net adds with targeted gross margins as they gave you.
Content costs -- doesn't matter. They have to go up. To which I say, so what? The amount of money that the company has available to spend is going crazy-high. They can manage the content costs because of that.
Next objection: The cost of acquisition isn't steady enough. To me it is viral. This is the most youthful customer I have ever seen. This thing is teenage- and mid-20s-driven, especially the amazing decision to stream on game boxes, where the youth is. The idea that they are no longer using "households" but actual cell phones makes so much sense. The thing is not constrained by households.
Oh, I can list a dozen more objections. All I hear is objections.
But here are two truths: This company, which was growing like a weed, now has accelerated revenue growth! I have about five companies that have ARG going for them. And this company is worth so much more as a private company. It is a
with a subscription scheme, it is
without the humongous sales force. If it came public now, it would be worth $20 billion, not $10 billion.
It remains a better short in people's eyes, rather than a long. May I make a suggestion? Switch eyes. Talk to younger people. They have the right eyes. And the most coveted demographic.
NFLX is the first mover. It is iTunes. It is iPod. It is iPad.
It is a mini-
And all I hear is that it's time to short it again.
: The cloud is back?
is now recovering from what I thought was the excess hangover of the short put people who came in long Monday. It can go higher, especially when the bigger contracts that weren't booked in December that were expected, get booked now.
At the time of publication, Cramer was long Apple.
A Brighter Future for Stocks
Posted at 6:57 a.m. ET on Wednesday, Jan. 26.
"And in conclusion, I think the
should blow right through 12,000 on its way to 14,000, the
is meaningfully undervalued and I would take advantage of the decline in materials stocks to pick up some terrific values, values so great that I am sure people on both sides of the aisle would embrace them."
There. Is that how you want President Obama to be? Is that what you think he should have said last night?
I watched the State of the Union speech last night with one eye on Twitter seeking instant reaction from people about what they thought. The comments ranged from being humorous, or actually un-humorous, to wiseacre skepticism or even deeper cynicism.
That's not how I felt. Strictly using the prism that people have come to expect from me -- the stock prism -- I thought it was terrific, just terrific, compared to 1) what I expected, and 2) what I would have expected a year or two ago.
It would have been inconceivable to expect the previous iteration of this president to mention the stock market's resurgence as a sign of economic health as he did right at the top. I thought it might be a throwaway line but it was anything but. This was a speech about the need to harness business to be more competitive so we can have, in the words of
Alan Mulally, profitable growth for all. Innovation. Engineering. Education. Competitiveness. These were the words you heard in various guises over and over again. It was a speech about how we beat the Russians in the Cold War and now we are going to beat the Chinese in the business war, out-innovating them, outgrowing them.
I found it remarkable. This was not about how the Chinese violate civil rights. It was not about social justice here or anywhere for that matter save a mention of Tunisia. It was not about income redistribution. He said he supported the tax cuts as his own but recognized that they can't stay permanent. No one, including President Bush, thought they would ever be permanent. He seemed to recognize, more intuitively than I thought, that the average American doesn't want to get by but wants to make money and do well and that's a relief from the re-distributionist president I was afraid I was going to see.
Finally, he accepted that his own health care plan needs modification. No ideologue. A practical-logue.
Not a Social Democrat, but a Capitalist Democrat. So capitalist that had a Republican president given this speech I think there would have been outraged left wing Democrats clamoring for help for the downtrodden or for bailing out city and state workers' pensions while hurting the municipal bond holders.
I'm not kidding.
Now when I entered some of these thoughts on Twitter I was kind of blown away by the cynicism I received in some, but not the majority, of quarters. The critics simply think the guy is irredeemable or that I drank some sort of Kool-Aid, a reference I always love because I actually covered the original Jim Jones Kool-Aid-by-death franchise as a homicide reporter back in the 1970s (Kool-Aid street cred!).
You have to remember, though, where my observations come from. Two years ago I chastised this president for not focusing enough on creating jobs and working with business and instead for attacking business and making it the bad guy. I was critical that the economy wasn't addressed first in a comprehensive way through putting money directly into the hands of the people, the way China did it, rather than reckless expensive and non-shovel-ready stimulus, and if you were going to do stimulus let it be big commercial construction projects that can generate multiplier effects not payments to municipal and state cronies.
I called his plan "the greatest wealth destruction of our lifetime" and predicted a sharp fall in stocks.
Well, we got that.
Now that he is doing what I thought he should be doing in the first place, two courses of action are open to me: 1) Say "forget about it, now you come in at Dow 12,000 with this, now? No thanks." Or 2) These words, this speech, is exactly what we need to have the stock market go higher. It was a bullish speech and it should help the overall tone of what we are going to pay for stocks, a so-called P/E expander, rather than the contractor angle that has predominated when Nancy Pelosi sat behind the president a year ago.
What a difference a seating chart makes!
Oh, and as to the people who say that I have no right to opine on this, that I should stick with stocks, I come back and ask, "What do you think makes people pay up more for a stock than it is worth right now?"
Simple answer: the future. After this speech the future for almost all stocks is brighter, not dimmer.
That's why, as someone who writes from the point of view of how to help you make money, I liked it very, very much.
At the time of publication, Cramer had no positions in the stocks mentioned
Jim Cramer, founder and chairman of TheStreet, writes daily market commentary for TheStreet'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 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 "
," "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.