“Five years ago today the market hit its all-time top. Here we are closing in on it again.”
It seems that line of thinking caused many people to be sellers of Tuesday’s market, Jim Cramer said on CNBC’s “Mad Money.” Cramer admitted that there are some similarities between then and now. Five years ago, the markets bore witness to the mortgage crisis coming to the fore and the burst of the housing bubble. Today, he noted the market faces the uncertainly in Washington surrounding the “fiscal cliff” and a sluggish U.S. economy.
“Last time we were pumped up by ridiculous lending to anyone who needed a loan. This time we are pumped up by central bankers printing money,” Cramer said. “They are both illegitimate.”
While Cramer thinks it’s important to be cautious, he slammed critics for admonishing investors into dumping stocks. After all, some stocks were worth holding on to. Apple, for example, dropped to $623 a share Tuesday, only to rebound to close the session at $635 a share.
(Read More: Apple's Stock Is Down Over 10%—Time to Buy?)
To Cramer, it’s “a little silly” that just because stocks were expensive at a certain level five years ago, they must be expensive at that same level today. What really matters, he said, is what stocks will be worth three months or three years from now.
So while the pundits continue to scare investors, Cramer said he plans on analyzing which stocks have the best prospects, so he can figure if they dropped to a level worth buying.
When this story was published, Cramer's charitable trust owned Apple.
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