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:
  • how to invest in the current market; and
  • why you shouldn't sell your Google shares.

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

This Is More Than a Squeeze

Posted at 6:28 p.m. EST on Friday, Jan. 4

Five-year highs for the S&P 500? What the heck? Must be all short-covering?

No, I don't think so. I think there's simply a level of Washington ennui that's pervading the market.

The people who haven't left the building are people who increasingly, I believe, won't be shaken out by the next Washington crisis.

That doesn't mean that they won't get spooked by bad earnings if we have them.

But think of it like this: If you sold on the debt downgrade last year, if you sold on the election jitters, and if you sold on the fiscal cliff, and if you sold on the dividend tax increase and if you sold on the utterances of politicians, you do look pretty stupid at five-year highs, don't you?

So much money was deferred from the market. So many people decided that dividends would cease to matter that much. So many hedge funds decided that the earnings had to be horrible that the spook factor was as high as I can recall.

Now, we know from Ulta Salon ( ULTA), which guided "too in-line"; Lululemon Athletica ( LULU), which got downgraded; Mellanox Technologies ( MLNX), which had hideous earnings; and Family Dollar ( FDO), which had terrible guidance, that you aren't safe from disappointing individual company reports.

But that's different from being in an unsafe market. Those stocks are all pretty highly valued and didn't have dividend protection and are ahead, not behind, the market.

I think the reaction of the OK retailers to the OK news -- witness the positive reaction to allegedly disappointing Target ( TGT) numbers -- is indicative that there was a short base in that group.

In general, though, the multiples aren't stretched for the big caps, international is getting better, and the individual has figured out how much to put into his or her 401(k) and retirement plans, now that we know the rules. Those who need yield went back in. Those who hadn't sold yet were given no new reason to sell.

Perhaps, more important, it isn't straight up. We were able to make some buys for Action Alerts PLUS today of stocks that were down that later climbed. They let you in -- another sign that it isn't short-covering.

Buying stocks, alas, on Washington worries talked about endlessly in the media hasn't been a sucker's game. Selling them has.

Maybe people are beginning to realize that that's the case. It won't be until huge amounts of money come back in the stock market and people aren't even talking about Washington that the jig might be up.

Until then, try to avoid the high-multiple players that ran big in 2012. Try to isolate the stocks at price-to-earnings ratios of 12 to 15 that could have good international prospects. Keep buying beaten-down master limited partnerships. And get ready for a rocky earnings season that will shake out some newcomers but I think, by and large, will do some damage to the high-multiple players but create some terrific buying opportunities for the others.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

Three Reasons Why You Shouldn't Sell Google

Posted at 12:51 p.m. EST on Friday, Jan. 4

You want a tough call? What do you do with Google ( GOOG)? Here's a company that missed the last quarter. Missed badly. Seemed to have no plan for taking up the slack of a potential slowdown in advertising. Seemed to have no plan to rein in costs.

The result? A huge downdraft, a 100-point drop, frightening and devastating to the bulls.

Now look at the stock. Here it is creeping back to the levels it stood at before the disappointment, and doing so before we see any numbers that tell us it deserves to retake that ground.

So why not sell it?

Let me give you three reasons. First, the decision by the Federal Trade Commission to let Google off without as much as a real slap on the wrist, let alone restrictions and break-ups, is monumental. First, those of us who remember the dramatic showdown between the Justice Department and Microsoft ( MSFT) in the late 1990s had to be fearful that the FTC would take a look at Google's remarkable market share in search, at 70%, and decide, per se, that it is a monopolist and that it was, like so many other monopolists, abusing its power.

But unlike Microsoft, which tried to hammer the government the way it hammered the competition, Google went in not with both guns blazing but with no weapons at all. The whole time that Google was in the government's crosshairs, it simply talked and reasoned. It showed that the company has simply built a better mousetrap. That unlike Microsoft, which jammed Windows and its own browser down the throats of the world, Google had no such market power. Everyone was free to go to Microsoft's Bing or Yahoo! ( YHOO) for search, or a host of other companies for search. Plus, Google steered people to Google sites instead of competing travel and entertainment sites because its offerings were arguably superior.

The FTC agreed. It was convivial, helped by the fact that Apple ( AAPL) boosted Google's case by trying to switch to its own maps app, and then having to switch back because of Google's superior performance.

Second, advertising, which had gotten weaker, could be getting stronger now, particularly given Google' gigantic European business. It's entirely possible that a headwind could turn out to be a tailwind this quarter.

Lastly, Google hasn't even tried to monetize or even lever its tremendous smartphone operating system. That's something that could be 2013's prospect, while at the same time it managed to shed the albatross that was the hardware portion of the Motorola Mobility acquisition.

Now we don't know how well Google is doing with mobile, but we do know that the apps it is offering on mobile, the ones blessed by the FTC, could lead to better revenue streams. We also know that Facebook ( FB) is blazing a path toward better mobile revenue, a path that Google could follow.

Normally, I would put Google in the penalty box for at least a quarter after that terrible miss. Now, instead, I think that the Washington-related decline may be just what you need to get back into the stock. I don't like it as much as I like Facebook, which I think is transitioning into a terrific mobile play. But these changes at Google within the time frame of the last quarterly report are too terrific to ignore, and the stock has become a buy-on-weakness, not sell-on-strength, situation.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL.

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