Cramer says: "Why Worry? Just Invest"

Discussion in 'Trading' started by S2007S, Oct 31, 2007.

  1. S2007S


    Cramer's 'Mad Money' Recap: Why Worry? Just Invest

    By Staff
    10/31/2007 8:03 PM EDT

    Click here for an archive of Cramer's "Mad Money" recaps.

    Investors should set aside negative economic news and concerns about overvalued stocks and just concentrate on buying stocks and making money, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

    Right now there is one problem facing investors: "they are overthinking this stock market," he said.

    The market is not working the way the professionals think it should and thus the people who know more about investing are making less and the people who know less are making more, he said.

    "There is a huge wall of money rolling at us courtesy of the Fed and it doesn't pay to over think it," Cramer said. "In fact it pays to not to over-think it." When money comes in, it drives stocks higher and that's all people should be looking at.

    Oil is driving everyone crazy because people are in shock that this commodity has gone up as much as it has and that no new oil is coming out of the ground, he said. However, "don't worry about high oil prices."

    Also, even though alternative energy stocks may seem overvalued, they are still going higher, as are the infrastructure, fertilizer and China plays, Cramer continued. He believes betting against something that's overvalued is a bad idea in this environment.

    Market players should be buying things even though they are overvalued, Cramer advised. Although this may seem irresponsible, traditional market thinking is not going to get people anywhere right now.

    Stop trying to be smarter than the market and over thinking it, he said. Instead recognize that oil, tech, fertilizer, alternative energy are all bull markets.

    "Go buy some Google (GOOG - Cramer's Take - Stockpickr - Rating) and Baidu (BIDU - Cramer's Take - Stockpickr - Rating)," Cramer said. "Welcome to rate cut."
  2. Your first word says it all: Cramer

    Im not arguing that stocks may not go up this time, but he has pushed stocks during so many downturns, so that very few people believe him.
  3. S2007S


    Wow, i have come across this article many times in the past, every time I do I read it. Those were some interesting picks he had. Reminds me of the GOOGLE and BIDU of today, of course many will debate and say its different this time, but one day you may wake up to SEE google trading under 100. Everyone thought the dot com run would go on forever, it didnt. The same thing will happen to the likes of GOOG, BIDU, AMZN etc.

    OK. Here goes. Write them down -- no handouts here!: 724 Solutions (SVNX:Nasdaq - news), Ariba (ARBA:Nasdaq - news), Digital Island (ISLD:Nasdaq - news), Exodus (EXDS:Nasdaq - news), (INSP:Nasdaq - news), Inktomi (INKT:Nasdaq - news), Mercury Interactive (MERQ:Nasdaq - news), Sonera (SNRA:Nasdaq - news), VeriSign (VRSN:Nasdaq - news) and Veritas Software (VRTS:Nasdaq - news).

    We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over -- and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don't even have earnings per share, so we won't have to be constrained by that methodology for quarters to come.
  4. i sure hope he wasn't investing his own money back in 2k. lol
  5. I'm no Cramer defender...but posting something like this is quite unfair. The problem is that yes, he picked them at what turned out to be the high. The question is what did he do next.

    We've all done it. I can usually look back and find where I've bought the market at the high, and sold it at the low. But I change direction quickly. I don't ride it.

    And frankly, I can recall some of your posts down at the market lows. If we quoted those you could rival Cramer. LOL. But that wouldn't be fair either, because we don't know what you did next.

  6. bluud


    Cramer is stock_trader on tv
  7. I'm also not a Cramer fan, but I read his response once to those guys that rip into him for those March 2000 Internet picks. He said his fund got out of them 1-2 months later at a tidy profit and shorted many momentum names later in 2000. He said 2000 was actually one of the best years for his fund.

    We can all think of Cramer what we want, the facts are:

    - This guy started out living in a car, then got his graduate law degree, worked at GS and eventually was and still is worth around $200m (or probably a lot more now)
    - His hedge fund averaged 24% annualized net of fees over a 10 year time period. That's 30%+ gross returns before fees in actual trading year in year out with multi million dollar amounts. I am sure all the critics here on the board are doing a lot better.
  8. Cutten


    Cramer's hedge fund made over 30% in 2000, mainly due to his head trader Todd Harrison being a massive bear. So whilst it was irresponsible to push momentum dot.coms publicly on his site (since his readers don't understand the idea of owning overpriced junk for a 1-2 month trade), Cramer himself certainly wasn't long those stocks all the way down whilst they got killed. He either got stopped out, or may even have flipped a quick profit on them for all we know.

    No doubt, the article was totally wrong. But writing a view, and trading it, are two different things. I don't know any half-decent trader who can't flip from long to short in the bat of an eye if they think the market has turned against the position.
  9. Although cramer sucks you can't go wrong buying any dip in this market.

    You can't fail. Doesn't matter who says it.
    #10     Nov 1, 2007