Cramer speaks often of the pervasive bearish attitude on Wall Street. No matter how positive the news, the analysts seem to focus only on the negative.
The Mad Money host said the pressure to be pessimistic, even despite evidence to the contrary, keeps this doom-and-gloom research coming. If Cramer wanted the research to reflect the bullish signs he’s seeing, he’d have to write his own report. So he did just that.
Below is “Why Retail Stocks Should Be Bought Now,” Cramer’s fictional analyst report based on his factual analysis. This is what analysts would write about the sector, he said, in a perfect world where the facts outweighed Wall Street’s fear:
With the holiday season upon us it’s time to step up to the retail sector and go fully invested in this segment. Channel checks indicate that the consumer is spending more than we thought, and some items, particularly boots, housewares, electronics and warmer clothing, are very strong. This strength lies not just in the department stores and discounters but also in the warehouse clubs and big-box retailers.
What’s selling the strongest right now? Personal computers and smartphones, with our channel checks showing especially brisk sales of Apple iPhones and iMacs. We are seeing fantastic business being done at Staples for Hewlett-Packard computers as well as printers and cartridges. Best Buy confirms similar sales with its ‘Apple store within a store,’ selling an immense amount of product and big-screen TVs are hard to keep in stock.
Mainstream department stores are reporting very strong sales of North Face, a VF Corp. brand, aided by the sudden cold weather across the country. UGGs, a Deckers product, are in short supply, and boots made by Jones Apparel are selling exceptionally well.
Macy’s housewares division is recording some of its best sales in years, some of which is product from Jarden , but also expensive cookware including Calphalon, a Newell Rubbermaid product. Target reports excellent sales of Jarden products as well, with the Jarden Crock-Pot being among the strongest sellers this year. A stay-at-home-and-cook wave seems to extend to the sales of Williams-Sonoma , which is having its best Christmas in years.
The consumer is spending more in part because of a belief that the worst job cuts are behind us. A robust stock market has brought many investors back to even, and a stabilized housing market with four straight months of fewer foreclosures had led to a greater willingness to spend on products that increase the value of homes, including Sherwin-Williams paint and fixtures by Masco .
Also aiding the consumer are low heating costs and lower prices at the pump, as the cost of gasoline has begun to fall after what seemed to be an inexorable rise. These trends are confirmed by Visa , which reports a particularly robust debit-card business.
The time to buy retailers – whether it be Tiffany for jewelry, Home Depot for an improved housing market, or Macy’s, since its precipitous decline caused by a willingness to sacrifice sales for profits – is at last upon us. J. Crew , Urban Outfitters , Staples, Phillips-Van Heusen , they are all trading up terrifically, and they all represent attractive entry points created by the tremendous pessimism among the hedge fund ranks.
That’s what the retail analysts should be writing, Cramer said. But they can’t because the look and feel of this moment is too bearish. So much so that no analyst would go as bullish as he just did.
“Yet all of it,” Cramer said of his report, is “completely true.”
Cramer's charitable trust owns Home Depot, VF Corp. and Visa.
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