The Guru: Beat the Selloff Blues by Jim CramerThis column was originally published on RealMoney on Jan. 20. Every time we have a good market, as we have since the year began, you get these folks who believe that selloffs have been repealed or that a selloff is a vast insult to the people's intelligence, or those who believe a selloff is the end of the world. We've had a gazillion selloffs in my time and if one occurs after things have been terrific, I find that it is accompanied by a cacophony of people who decide that this business is too dangerous and who give up whatever they have made. I am not writing this to taunt. I am writing it to suggest that the way to beat these blues is simply to be sure that you are selling into strength, particularly when things are overbought and you get so much optimism. Remember, I am not talking about timing the market. That's not my plan. I am talking about going against the grain and letting even some of your favorite stocks go so that you have room to buy them back when they come down.
Fundamental Concerns: Google's Momentum Could Wane by Frank CurzioThis column was originally published on RealMoney on Jan. 19. There is no doubt that Google is the darling of Wall Street. The Jan. 18 downgrade by some small shop only serves as the exception to the increasingly popular analyst game of "top my price target." But what's being overlooked in this game is that the stock's further rise isn't dependent on Google's business. It's dependent on momentum. Since its IPO at $85 a share in 2004, Google shares have soared about 425% to $450 a share. I admit I was on the sidelines the whole time during the move, but enjoyed watching the action, as well as the analysts race their targets ever higher. But shares are not moving higher on valuation here; they are moving higher on momentum. Momentum consists of two important conditions:
- Positive sentiment
- Favorable market conditions