After last month’s rally, Cramer on Thursday said some people are worried the market is becoming “bubbly.” They think a bubble is building in everything from oil to tech. For his part, the “Mad Money” host said these fears are overblown.
To support his viewpoint, Cramer noted the definition of a bubble is when individual investors are buying stocks hand-over-fist, no matter what the price. But the individual investor just isn’t in the market right now, he said.
In fact, money has been pouring out of the stock market for some time, Cramer continued. The exodus began with the dot-com bomb about 12 years ago, followed by the financial crisis and ‘flash crash’ in May 2010, he stated.
“Given all these fiascoes and the fact that stocks as an asset class haven’t made you any money over the last decade, it’s no wonder regular people have been abandoning stocks in droves for years now,” Cramer said. “So what happens when we get six weeks of good action in the market after an entire decade of treading water? We hear there are bubbles developing all over the place, of course.”
Cramer doesn’t think there are any bubbles out there. What’s happened is that the market caught a little updraft, followed by incredible excitement over the Facebook IPO. But that’s not dangerous, Cramer argued. If Facebook is bringing the institutional investor in from off the sidelines, then he’s all for it.
Read on for how Cramer would trade the Facebook IPO
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