NEW YORK (
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:
- how the advantage in market battles has shifted to the longs;
- how so many onetime bears have suddenly switched sides; and
- how the market got Norfolk Southern very wrong.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Growth Stocks Stirring Up Market Battles
Posted at 3:28 p.m. EDT on Friday, Oct. 28.
Battlegrounds now. Small-unit action. Like
. We have about 20 days before we find out what Salesforce.com earned. In the interim, we have a market that fell out of love with high multiples and then has fallen back in love with them. We have a market that had no faith in the future, and then we have a market where the future looks bright. We had a market where the shorts were dominant.
And now we have a market where the longs are going to hoard their stocks and make the shorts pay.
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Into that arena stepped high-quality hedge-fund managers like Whitney Tilson, who shorted Salesforce.com before, right before and after appearing on
"Fast Money" and told a very compelling story about all sorts of issues, including accounting ones, that made you feel that he had uncovered the next
Green Mountain Coffee Roasters
, if not the next
Here's the problem. Tilson could very well be right someday. But you aren't going to get a lot of news flow in the name in the interim, and what you are going to get is chatter about how Salesforce.com has been winning accounts, gaining steam and pulling away from
, which just did a catch-up acquisition, and
, which is doing its best but has a lot of fingers in different pies.
So, what happens?
People gun for Tilson. They decide to rip off his and, well, the collective face, of all of the people shorting CRM. Soon, two things happen: The chart goes from bad to good, which is something that the rigorous shorts and longs care about, and long-only hedge funds decide to put more money to work in the name because they see that
Chipotle Mexican Grill
are working again.
So what happens?
There's the run-up and then there's the report. The bad news for the shorts is that the run-up could go on for weeks. The good news is that there is an earnings report coming in 20 days, and if the stock hits a new 52-week-high, it will be too high and get hammered.
The question is, do the shorts have the staying power. Or did they just put it on at the wrong level? Can they get some analyst or analysts to panic and downgrade it?
But don't think so.
So the battle plays out.
Right now, advantage longs.
At the time of publication, Cramer was long IBM and ORCL
Enough With the Johnny Come Latelys
Posted at 4:02 p.m. EDT on Thursday, Oct. 27.
I am talking about how, all day, I heard people be bullish who had been bearish.
Nope. Not right.
The time to be bullish was when everyone was saying it was the end of the world. The time to be bullish was when people felt that we were going to be run over a cliff from Europe. That doesn't mean you had to be bullish at the beginning of the month, although that would have been amazing. That was when you heard lots of talk about crashes and head-and-shoulder patterns and how it was all over for Europe.
You had a second chance when we had a breakdown in talks on Oct. 17. You could have bought the heck out of the market believing that the breakdown was just temporary.
And then there was two Mondays ago. We came in. There was no deal over the weekend. People got hugely short. Of course, we never looked back again.
I can forgive those who were bearish coming into the month. September was
. We were still dealing with the overhang of the government shutdown here and the downgrade of our bond rating. Over there it was pure chaos. At the beginning of the month we heard obituary after obituary for the euro and the FXE traded at 131.
It brought out a huge number of bears.
But a week later nothing had collapsed, the euro started to go up and yet surveys showed even more bears. That was a terrific moment to buy. Yet I heard over and over again that the Lehman moment awaited us.
The Oct. 17 breakpoint was easier to buy than the beginning of the month, but I just heard and saw lots of heel digging. That was despite the fact that we had good earnings reports. In fact, the only really bad report,
, occurred first. It is safe to say that it was the worst and they have all been better.
But last week was a crucial moment. And don't I know it? In what may be one of the great reversals I have seen, my friend Bert Dohmen of the Wellington letter, who had been justifiably bearish for ages and dodged some really horrible downside, stood the charts on their head and went outright bullish.
What a call.
I mention Bert because he did what really takes guts. He switched. And he switched at the last train out of the station.
Now people are in left and right, many of them being the same people who told us to avoid this market at all costs. Don't I know it? We have been buying the cyclicals at Action Alerts Plus and paying the price. In 72 hours we have seen gains of a lifetime.
Now people want to come in?
I have to tell you, I understand why people want to buy but I haven't heard a word of recognition other than from our own Doug Kass that these all-in players hated it coming in to today.
What's the difference from Bert?
Simple, when it was really hideous, he went to buying. That's what takes guts? Come in now? It just takes admission of how wrong you were.
I wish I heard it.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AA.
The Market Hears What It Wants to Hear
Posted at 6:27 p.m. EDT on Wednesday, Oct. 26.
Sometimes the market is so infuriating. When the market makes its mind up that something's wrong or is about to go wrong, when it thinks that a company is dissembling or clueless, it just doesn't matter what is said.
Such was the case with
not that long ago when its stock was in free fall when a couple of coal companies had screwed up and preannounced bad numbers.
It didn't matter that Norfolk Southern at a conference the day after the screw-ups presented numbers that were up to the minute, showing how great the coal-car loadings were. It didn't matter that NSC basically assured you that business in September was off the charts. All that mattered was that
said that it saw earnings for the next quarter at one-third of what it had told people earlier. That caused NSC to drop almost 10 points in two days!
Now we see the real numbers, which were exactly what NSC said they would be. No, maybe a little better. And the stock is screaming higher in after-hours trading.
Infuriating. Admittedly, if Germany had stalked out of the talks or if France had said, "Forget it, take a hike, Greece," then NSC would be at $65 instead of $72, where it is trading after hours.
But they didn't, and a huge gain has been made. The moral? How about trust a company like Norfolk Southern, which is as conservative as a company could be and better run than just about any other out there?
At the time of publication, Cramer had no positions in stocks mentioned