Just as investors had determined that the technology and financials group were in the "no touch" zone, they came roaring back on Thursday. Jim Cramer smelled a fish. Why would money managers leave the very best stocks in order to pick up the ragged and unloved ones?
When Cramer attended CNBC's Delivering Alpha conference this week, he spoke with many big time money managers who seemed completely unwilling to deal with the techs and financials. They didn't seem to like or trust these businesses.
Cramer suspects that money managers have repeatedly gone back to the financials because they were considered "cheap" versus historical levels, and they decided to just give in and deal with them. Yet, they remain too hard to analyze.
"These managers might very well be right, theoretically. But I think it's time we speak truth to power and say just how wrong that's playing out now," the "Mad Money" host said.
The hottest stocks in the market, with exception of takeover targets, are those with companies that are disruptive technologies and the financials.
And Cramer totally gets why the big-money men would think of tech companies as out of date with stocks like Intel, IBM and Oracle, which can't seem to outrun the declines that are levered into their business.
But have they heard of tech savvy companies like Tableau Software? It hit an all-time high on Thursday and is up a whopping 47 percent for the year. Cramer also pointed out ServiceNow, which is one of the fastest growing IT companies out there. Sure, both of these can be disrupted, but not now as they are still forming.
Or how about Facebook? No one seemed to like it at Delivering Alpha, yet Cramer keeps hearing stories about companies that are growing tremendously through its advertising platform.
But it's not just the tech stocks that grabbed Cramer's attention, it was the biotechs, too.
Where were the big-money boys when Receptos and Celgene rallied again on Thursday? Nowhere, that's where. They were still looking at the old pharma companies like Merck, GlaxoSmithKline and Pfizer, which seem to have uncertain pipelines.
And then there were the banks, and Cramer saw that most people have given up on the banks just at the wrong time. The most important expense for this group is finally coming down—the legal expense.
What most managers missed is that some of these banks have spent billions in legal defense, just to end up paying billions to the United States in fines. Some may even argue that it would have been better to put the bad guys in jail than to make the shareholders pick up the brunt of the fines.
One major signal of the comeback to Cramer was when the Justice Department prosecutor Tony West left to go to PepsiCo.
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"But you want to have some fun? You caught the beginning of a major run in almost all of the big banks when West left the Justice Department for the greener pastures of PepsiCo. Right then, the analysts should have gone from a hold to a buy, but they were too busy thinking inside the box," Cramer said.
Ultimately, the big takeaway from Delivering Alpha for Cramer was that many portfolio managers seem to be scared of the past, so they come up with creative ways to avoid stocks like tech and finance.
But in Cramer's world there is more than one way to skin a cat—just when you think outside the box to reconsider traditional investment themes, the money flows in.