NEW YORK (Real Money) -- Know what drives things. Know why your stocks can go up or down. Know the metrics, for heaven's sakes.
There -- that's what I would have said to an exasperated Twitter follower of @JimCramer when he asked me why EOG Resources (EOG) "goes down every day."
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That's because sometimes this racket actually makes sense. EOG's an oil stock. It makes money taking oil out of the ground and selling it. When the price of oil goes down, EOG's stock goes down -- because it is an oil company.
Someone else asked me the other day why the banks are rallying despite being hit with new surcharges from the Federal Reserve to continue to stamp out the threat of banks being too big to fail. Doesn't that crimp their earnings, one flummoxed bank shareholder asked me.
Yes, it might if the bank you own is undercapitalized, meaning it can't meet the new standards. But the truth is that banks go up or down depending on interest rates. If rates go higher, they make more money. If rates go down, they make less. Right now rates are going higher. Investors are simply concluding that when banks report results next month, their stocks will go higher, so why not get in ahead of that.
Now, I know that for some of you, this is counterintuitive. Isn't EOG growing its reserves mightily? Isn't Apache (APA) becoming bigger and bigger in the U.S.? Why did your charitable trust sell Occidental (OXY) when it keeps finding oil?