Mad Money

Cramer: Wall Street’s Apple mistake

The iPhone 5C.
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If you're worried about Apple because you read a concerning news article earlier in the week – Cramer would like a word.

You may not have the whole story.

Shares of Apple slipped immediately on Monday after earnings headlines flooded the Street suggesting that margins were weaker than expected.

On that news, bears pounced immediately.

However, those headlines came out before on their earnings call.

"Apple explained that it had made an accounting change that depressed the announced gross margin number somewhat artificially," Cramer said. "Some revenue that would normally have been included in the quarter got deferred and that fell right out of the bottom line."

Sellers didn't have the whole picture.

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Cramer is seeing the same phenomenon elsewhere in market.

"We saw something similar with Eaton last Friday when, only on the conference call, did you learn that orders had turned up in the last month of the quarter and had gotten better in October. A stock that's down a buck is suddenly up three dollars not long after," Cramer said.

Again, sellers didn't have the whole picture.

Cramer thinks there's a very valuable lesson here. Business news journalists who publish to the web work under tight deadlines. If you're using these resources to make investment decisions you must remember, "These stories often don't reflect the nuances involved with complicated companies," Cramer said.

Instant analysis isn't always complete analysis. It's usually best to wait for the conference call before making a move.




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