It looks like Jim's made the Drudge Report again, and as usual, it always feels like being put in the stocks, and I'm not talking about the kind of stocks that people invest in.
Monday morning on Today Jim told people to sell. All of sudden it's a headline, and I'm improvising here, "Perma-Bull Cramer turns Bearish on Stocks." I think that captures the zeitgeist, even if it's total garbage factually.
Here's a quotation from the MSNBC summary that, I think, misrepresents what Jim has said, and has been saying, in a pretty typical way:
"While the animated Cramer is known for telling investors the best prospects for earning money on the stock market, he’s now saying retreat is the best position in the face of some of the worst financial news in decades. The bank lending default crisis that put financial firms around the country on the brink of collapse could bring 'as much as a 20 percent decrease in the stock market,' Cramer predicted."
So, "he's now saying retreat is the best position," as though we haven't been telling people to sell at least 20% of their positions in stocks for three weeks (we have, almost daily)! And it's not like Jim was anything close to bullish before then, especially on the financials, where he's practically been a perma-bear. But the media covers this like it's a 180 switch in Jim's position. Not unexpected, but it's still galling. Anyone who watches the show would've heard Jim's repeated exhortations to sell. True, the five-year planis new, but he's been advocating moving from stocks to cash for weeks now on the show, and it's only on the day of the big crash (which we partially recovered from at the end of the day anyway) that Jim's overall bearishness on stocks gets any coverage, and it's treated like news!
Of course, the whole bull/bear thing confuses the issue, as always. Even now, on tonight's show, Jim is still recommending that people own some stocks, just the safest ones, the defensive names – the foods, the beverages, the soft-goods companies like Chattem, whose CEO we interviewed tonight. We've also recommended picking at stocks like KBR, that are trading so close to their cash that the market's valuing the actual company at next to nothing, even though the business is good. And, as he said tonight, Jim still thinks you should keep money in stocks for your retirement account for the long-term, as long as you won't need that money in the next five years.
In this kind of chaotic environment, we've been incredibly prudent on the show, telling people to sell and raise cash when the market was much higher than it is now. And anyone who's telling you to hold on and sit tight right now is full of it. That would mean you believe that we're actually in pretty good shape, that the worst is over, and that we probably won't go down much more. Who thinks we're in good shape? Who thinks the worst is over? That's ridiculously complacent, and telling people to sit still in a sinking ship is the worst kind of recklessness. And yet, when you tell people to sell like Jim's been doing since we were 1,500 Dow points higher, everyone acts like you're the one who's hysterical. Anyone who actually listens to what we do every night would know there's nothing new about Jim's position and nothing reckless about it.
But let's be clear: Jim didn't say, "Get out now." He's been saying, "Get out some," for weeks, and he reiterated that position Monday. He said there's a real chance we could go much lower, nothing new there either. Selling all at once, by the way, is a clear violation of the rules set down in both Real Money: Sane Investing in an Insane World and Mad Money: Watch TV, Get Rich, where Jim says you should never, ever sell (or buy) all at once, but instead do so incrementally over time so you don't end up selling everything at the trough or buying everything at the peak.
Cliff Mason is the Senior Writer of CNBC's Mad Money w/Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Richand Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like.
Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.
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