Cramer: Why You Should Still Care About Stocks
It may be tempting to ask, “Who cares about stocks?” Jim Cramer said Tuesday on CNBC’s “Mad Money.” After all, companies are controlled by the rich and corruption has been known to run rampant in the financial space.
But Cramer told a different story Tuesday, when all the major averages closed near session highs on Bernanke’s open-ended testimony before Congress. The Dow Jones rallied 78 points to end at 12,805, the Nasdaq rose 13 points to land at 2,910 and the S&P 500 gained 10 points to trade at 1,363.
“I have trouble with this ‘totally corrupt thesis,’” Cramer said. “The dictum that says [the market is] ‘rigged’ and it isn’t worth it because the big guys have too many advantages versus homegamers like you.” He then began to dismantle the notion that all markets were weak by pointing out a handful of key bright spots in the stock market.
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In the tech and retail space, he pointed to Apple’s 50 percent gain year-to-date, Gap’s 53 percent price increase, Wal-Mart Stores’ run-up of 22 percent and Target’s 19 percent profit. In telecoms, he singled out Verizon for its 13 percent rise and 18 percent return, as well as Comcast for its 35 percent surge in 2012.
He also said we are seeing big gainers among the alcoholic beverage brands. Budweiser, made by AMBev, has jumped 22 percent, Jim Beam has risen 21 percent and Johnnie Walker Black — distributed by Diageo — has spiked 20 percent. And why not chase that with a Corona, Cramer said, which is sold by Constellation Brands and has jolted up 41 percent.
And let’s not forget about Wells Fargo, which boasts 30 percent of market share among U.S. mortgage owners, is up about 23 percent.
“These are convincing and highly visible gains,” he said. “Gains that make me want to stop apologizing for this market because it needs no apology.”
Still, with the handful of scandals that have surfaced — the prosecutions of billionaire hedge fund manager Raj Rajaratnam, the recent Libor scandal and even a new probe into possible money laundering at HSBC — Cramer said he can understand why so many investors have put their money into U.S. Treasurys. Because the ratings agencies keep downgrading the creditworthiness of the banks you like, he said.
And sadly, most investors seem much more interested in stocks like Research In Motion, which is down 52 percent, Nokia with its 64 percent drop-off and Groupon with its 63 percent decline. Not to mention Zynga and Facebook, which is down more than 10 points from its issue price.
But the bottom line is: As long as there’s money to be made, and the biggest most household names are making it, Cramer’s not going to stop trying to help you find the bull markets. “The anger and the ennui, you know what they do?” he asked. “They make me work harder to get you to see the opportunities, because they are there. And the [crooks and politicians] just aren’t powerful enough to stop us.”
Read on for Wednesday's 4 Stocks to Watch
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When this story was published, Cramer's charitable trust owned Apple.
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