GO
Loading...

Cramer: Don’t try and outrun the bear

(Click for video linked to a searchable transcript of this Mad Money segment)

It seems you can't turn around on Wall Street without someone else shrugging and saying, "Well I guess this is it."

"Well guess what? In my world, there is no it," said stock guru Jim Cramer, host of CNBC's Mad Money and one of the network's chief market commentators. "The idea that the bulls are through and the bears are going to eat your lunch just doesn't make sense."

Of course, that's not to say stocks won't go lower, in the near-term. (For example, noted technical analyst Ralph Acampora recently predicted a sharp decline of as much as 25 percent).

Cramer realizes there's a great deal of skepticism in the stock market right now and it could exacerbate selling, especially due to developments in the bond market. "In my 35 years I've never seen anything like it," Cramer said.

Typically in an improving economy, yields rise. But that's not happening, right now.

"We got some hot inflation numbersyesterday that should have sent bonds lower and, therefore, interest rates higher. Didn't happen. Today we had the strongest jobless claims figure in seven years. People are getting hired. That almost always causes interest rates to rise. But today it was met with still one more decline in rates."

The price action in the bond markethas left money managers scratching their heads. To them, it makes no conventional sense.

Therefore, a growing percentage believe the rate drop is a harbinger of something bigger. That is, they think the bond market is telegraphing a serious crisis looming on the horizon.

And they're running for the exits.

Read MoreHedge fund titan David Tepper: I'm nervous

Cramer just doesn't see it that way. He believes the declines in yield are largely benign; having more to do with a permanent change in our national psyche and a lower tolerance for risk.

But that probably won't prevent near-term selling.

----------------------------------------------------------
Read more from Mad Money with Jim Cramer
Cramer: Significant shift is threat to investing
'Indispensable read' for bank shareholders
Fragrance stock smells of success
----------------------------------------------------------

Adding to the negative catalysts in the market, Cramer also believes momentum stocks will remain under pressure. He says, the market has turned away from stocks with high valuations that trade on growth potential, preferring value and dividend yield instead.

Therefore Cramer expects momentum to remain challenged. "I don't think it's too late to sell the momentum plays. The wrong stocks are the wrong stocks," Cramer said.

All told, Cramer wouldn't be surprised to see the bears roar, again. "It could happen tomorrow," he said.

But he wouldn't try and outrun them.

Long-term, Cramer believes there are plenty of reasons to like stocks.

As he so often says, economic conditions are improving, more M&A seems likely, and large swaths of the market remain relatively cheap. Those are long-term bullish catalysts and Cramer sees no reason to believe they won't remain intact.

Therefore, "If you own stocks with good dividends and excellent balance sheets and the reasonable valuations I trace out nightly, I say you should accept the roaring of the bear, don't try to outrun him. Just sit tight, knowing you're going to get blown around a bit. But, I believe you will come out safe on the other side."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book