Jim Cramer's Best Blogs

NEW YORK ( TheStreet) -- 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 discussed:
  • why the current market is not that bad; and
  • the bull and bear cases for Facebook.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


The Market's Not that Nasty

Posted at 7:01 p.m. EST on Thursday, Jan. 31

All day today I wanted to be bearish. I read Doug's columns and I found them very persuasive. Plus, I can't say I am crazy about a setup based on various short squeezes all over the place like the ones in the cloud and the ones in semiconductors, although they sure passed by Broadcom ( BRCM).

But I keep coming back to how broad-based this whole rally is. I keep thinking, like my friend and colleague at TheStreet Matt Horween, that we may be just forming a gigantic, well-rounded base. As he just pointed out to me, we have not really surged if you look at a long-term monthly chart.

Plus it is not like we are seeing froth all over the place. They aren't running up bogus biotech or small-cap semiconductors or device stocks that don't make sense.

Instead these are mostly backing-and-filling advances with pockets of selling that are quickly met with buyers, although usually not as fast as Facebook ( FB) was today.

To me the buy-on-a-pullback view is something that people espouse, but don't really do. I heard lots of people talking about buying Facebook and Blackberry (still Research In Motion ( RIMM) at the moment) on pullbacks, but when they get them they want more of a pullback. You just aren't getting that "more of a pullback" that would make it so easy to join the advance.

To me, the best way to look at this market is with the stocks of the companies I had on "Mad Money." We got a sell on KeyCorp ( KEY) from Bernstein today and the stock barely got hit and then came back and next thing you know I am listening to the CEO and I am thinking "How could a guy put a sell on a stock this cheap?"

Or Bill McDermott, the Co-CEO of SAP ( SAP), comes on and, you know what, I think he's allowed to give his hard sell and deserves it when you consider the growth that he is having now in Europe and the share he is taking from everyone else. If only that stock would pull back? I doubt it. We just had a pullback to $77 and it lasted about as long as the blink of an eye.

Then there's Dunkin' Brands ( DNKN). People wanted to throw doughnuts at Nigel Travis because international wasn't that strong. I think when he says, as he did on the call, that he has a personnel change that could make things better, I want to give him the benefit of the doubt. The stock's not cheap. But neither was Domino's ( DPZ) at $30 and look where that went.

In other words, when I break the market down into its pieces, it just doesn't seem as nasty to me as Doug would make it sound in its entirety.

Just too many stocks like KeyCorp, SAP and Dunkin' out there to make my mouth water ... while I wait for the, ahem, proverbial pullback.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long KEY.


For Facebook, It's All in the Eye of the Beholder

Posted at 11:41 a.m. EST on Thursday, Jan. 31

Facebook's ( FB) great. Facebook's horrible. Facebook's cheap. Facebook's expensive. Facebook's growing like a weed. Facebook's growth is already slowing.

Which is true? How could there really be such extremes in sentiment here? Believe me when I say I am only hearing extremes, as there seems to be no middle ground at all with this stock.

The answer? It's all in the eye of the beholder. People are seeing what they want to see in Facebook.

Let me give you the bear case, which puts you in the head of the sellers. Then I'll give you the bull case, which allows you to understand it from the perspective of the buyers. It's the only way, frankly, to explain the stock's wild ping-pong game: First it'll hang in, even after a huge rally, then it'll give up the ghost before it settles in where it was a fortnight ago -- before the big price spike.

The bears -- including lots of analysts who were bullish going into the quarter and subsequently downgraded the stock Thursday morning -- are seizing on how the company is spending like a drunken sailor and may not have all that much to show for it. These investors want results now. They don't want to hear Mark Zuckerberg say, "We aren't operating to maximize our profit this year. We're doing what we think will build the best service and business over the long term."

That's the kiss of death for all of the upside-surprise folks out there, the ones who figured Facebook had hit the magic formula for mobile and would show an explosive revenue and profit number. They aren't satisfied with the 17 cents vs. the 15 cents earnings-per-share number. They needed something like 20 cents to 25 cents in order to stay in the stock, or cover their shorts, or upgrade from buy to super de-duper buy.

It's ironic that the bulls look at the same exact statement from Zuckerberg and love what they see. Put simply, they see the next Amazon ( AMZN). They see a company with such a huge growth path that the smartest thing the company can do is to spend as much as possible, thus getting advertisers to spend fortunes trying to reach their targets among the more than 1 billion users of this product.

The bulls are thinking not about earnings this year, which they don't care about in the least, but to the outyears -- say, 2015 -- when the spending will begin to pay off. They are patient, as they had been with Amazon, which became one of the great performers of all time simply because its visionary founder and CEO, Jeff Bezos, never wavered in having a long-term vision. In fact, these bulls would fear for Facebook if it weren't investing. That would have meant the hyper-growth phase is already over, and they would have been stuck with another Intel ( INTC) or Microsoft ( MSFT) -- played-out stocks that just generate a lot of cash but muster little growth.

Where do I come out? I understand both sides. I get that Facebook's spending could be very meaningful. However, I thought the company would have made more money already. I fear that, as good as mobile is for Facebook, like everyone else, it might not be good enough to offset declines in desktop advertising revenue.

In sum, the bears think the company is being short-term profligate. The bulls think that the company is being long-term greedy.

Me? I think ultimately the bulls have more firepower than the bears, and that the stock can go higher. It's just that it has come up so far, so fast, that the pace will now be labored.

In the end, I think there are a ton of stocks out there that are much better than Facebook, and let's just leave it at that.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.

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