“Stop worrying about the falling price of stocks,” Cramer said Monday, “because the falling price of gasoline means they will eventually go higher.”
The “Mad Money” host said oil is still coming down and believes consumers will soon feel relief at the pump. And that will affect the market across the board. Not only will retailers and restaurants have more customers spending money, but auto companies and other manufacturers will see its numbers go up as well.
Knowing the trajectory of earnings estimates, Cramer emphasized, is always the best predictor of stocks. If you know the direction of those estimates, it makes sense to buy the stocks that are being forced down by hedge fund players who are now dumping stocks because of their bad bets.
Not only are oil prices going lower, but President Obama is back on the oil bus, Cramer said. The President is expanding oil production in the Gulf of Mexico and Alaska. And that is good news for companies like Halliburton and Schlumberger .
So, why aren’t stocks flying now that gas prices are falling? Cramer said it is the lack of interest by individual investors. He believes they don’t trust the market and may have become convinced it is rigged. The insider trading trials, like we saw with Raj Rajaratnam, may cause them to feel they can’t compete. Cramer also thinks it could be because stocks have done nothing for a decade, or because people aren’t making enough money to save and invest. Many people also think they may have missed their opportunity to get into the market.
In any case, it is not because of the end of QE-2, or the worries about the value of their homes.
“It’s just the taint, the taint of an asset class gone bad,” Cramer said.
Cramer is urging investors to fight that instinct. “We are now in a moment where forced selling in the futures is giving us some incredible buys in common stocks, especially considering the higher earnings estimates that will soon be upon us,” he said.
Cramer pointed out that 85 percent of the stocks out there will benefit from or won’t get hurt by lower oil prices. “That’s certainly enough to warrant investing in stocks right now,” he said.
CNBC.com with wires
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