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NEW YORK (TheStreet) -- Portfolio managers are locking in their gains and heading to the movies, Jim Cramer said on "Mad Money" Thursday as he attempted to explain the real reasons behind the late-day selloffs the markets have been seeing.
Cramer recalled when, as a hedge fund manager back in 1993, he found himself beating the S&P 500 by almost double for the year. By the time December rolled around, the only prudent thing to do was sell everything and go home, he explained. Continuing to trade would only risk losing those spectacular gains.
That's what many professional money managers are doing today, just biding their time, day trading on the momentum names and selling everything by the close, said Cramer -- locking in their gains, tweaking their positions and making sure their profits look just right for Jan 1.
Cramer said there's only one potentially big bad event between now and the end of the year and that's the Federal Reserve meeting next week. But with a looming budget deal in Washington, even the Fed news may be met with a yawn. Investors can still buy some of the long-term winners, such as Home Depot (HD), which he featured on last night's show. but outside of those, there might not be too many exciting events over the next few weeks.
Adoration Runs Deep
Investors betting against the stocks the markets love are losing fortunes, Cramer told his viewers. Shares of Twitter (TWTR), Tesla Motors (TSLA), Netflix (NFLX) and Amazon.com (AMZN) just won't quit heading higher.
Cramer said the love that investors feel for these stocks is unconditional and the adoration runs very deep. Tesla may sell as many cars in a quarter as Ford (F) does in a day, but that doesn't seem to matter. Amazon may not ever turn a profit, but that's OK, too, as long as it keeps showing off its aerial drones.
Netflix may pay a ton for new content and investors don't even bet an eye -- in the end, Netflix will be the one with the hot new content everyone wants to watch. Then there's Twitter. People love to tweet, said Cramer, and that makes them love to buy Twitter and then tweet about buying Twitter.
Cramer said when it comes to these "cult" stocks, investors should never bet against the love.
Executive Decision: Terry Lundgren
For his "Executive Decision" segment, Cramer sat down on location with Terry Lundgren, chairman, president and CEO of Macy's (M), at the company's flagship store in New York City. Shares of Macy's, a holding in Cramer's charitable portfolio, Action Alerts PLUS, are up 32% in 2013 and the company last delivered an eight-cent-a-share earnings beat on a 3.5% rise in same-store sales.