Editor's note: Welcome to "Booyah Breakdown," an explanation of certain terms and topics Jim Cramer discusses on his "Mad Money" TV show. Feel free to
The Oscillator: The S&P's short-range oscillator is a subscription service that's updated daily for subscribers. It's basically a number calculated by the S&P, and when it moves above five, it has historically signaled that the market is overbought. When it drops below minus five, it has generally been a good time to start buying stocks. On June 23, Cramer discussed rule 14 of his
25 Rules of Investing , which relates to market corrections. He said, "You may not know when a storm might strike. But we do have barometric readings that help immensely. When the S&P's proprietary oscillator registers plus 5, that signals to me a level of overbought that I regard as dangerous, and I pull back aggressively and wait for a correction." So, it is just another metric used to monitor the market's activity. Overbought/Oversold: It's your basic supply and demand stuff. When too many folks pile into the market, there's little capital left on the sidelines to keep the rally going. Thus, the market is "overbought." Fewer available shares mean higher stock prices. On the flipside, when folks have pulled too much money out of the market because fear is high, the market is oversold, and savvy investors realize that it's the perfect time to start buying. Supply is up, prices are down, so it's bargain time. Fundamentals: The fundamentals of a company are basically the financial statements -- the numbers behind the business. You need to read them as part of your homework on a particular stock, so pull up the 10-Q or annual report and analyze how the company is doing relative to its peers and market expectations. Market Research: Normally, investment research is put out by the big brokerages and includes information like buy ratings, price targets, earnings estimates, etc. Those are the analysts' reports and are sometimes hard for the average guy to get his hands on. But Cramer does a ton of homework by reading various publications, talking to management and really trying understanding what goes into buying and selling the products and services they provide. But there's enough free info out there for you to do the proper research these days.
Booyah!: Cramer explained where "booyah!" came from on an episode of "Late Night with Conan O'Brien" last year: "Here's what happened: A guy calls me on my radio show, and he says, 'You made me a 100 smackers on K-Mart -- a hundred points...' -- he's from New Orleans -- '...and we have one word for that down here, and it's booyah.' Then the next guy calls, and he says 'You know, you made me a lot of money on
a stock so: booyah!' And now they all say it. It's not my rap." Clearly, the phrase took off. I personally love when callers have their kids shout booyah and Cramer screams "familial booyah!" and pushes the "crowd cheering" button. Little Red Bulls: This isn't a vocabulary word per se, but many of you have asked where to get the little red bulls that Cramer seems to believe are a delicacy. Well, if you feel like venturing to Manhattan, they sell them at the NBC store in Rockefeller Center for a mere $5. If you can't travel and are willing to ante up more moolah, check out eBay.
OK. Lesson's over for today. Hope it helped cleared the air in Cramerica!