Cramer: February is not as bad as you think

Monday brought the official end to January, and traders always whisper about how February is historically a bad month for the stock market. Refusing to subscribe to that notion, Jim Cramer reviewed the patterns of the past so that investors aren't misled.

Investors are always trying to look at patterns for stocks. There are times when it makes sense, and times when it doesn't. For instance, if a company has a pattern of missing quarters, then investors will not touch the stock until that pattern ends.

"But these other patterns, the seasonal ones? They just don't hold up under scrutiny," the "Mad Money" host said (Tweet This)

A trader works on the floor of the New York Stock Exchange
Andrew Burton | Getty Images
A trader works on the floor of the New York Stock Exchange
"This stuff is told by an idiot, full of sound and fury, signifying nothing." -Jim Cramer

On Monday, Stanley Fischer, the vice chair of the Federal Reserve, spoke at the Council on Foreign Relations.

While Fischer was more dovish than he has been in the past, he still did not take the idea of the Fed implementing four rate hikes in 2016 off the table. Had he done so, Cramer was confident that the averages would have roared higher on Monday.

So, does that mean if Monday had been a better day, the entire month of February would be good?

"The answer, however, is no. This stuff is told by an idiot, full of sound and fury, signifying nothing," Cramer said. (Tweet This)

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More importantly, Cramer also believes that many of the patterns that have always made investors money mean nothing, too. He has lived through many cycles of oil plummeting, gasoline prices falling and heating bills lower than expected. Every time one of those cycles occurred, Cramer saw that consumers spent more money and retailers did better. Many consumers went to the mall.

None of that happened this year.

The truth is that no one knows what will happen, and Cramer thinks it is foolish to try to strictly relate cause and effect every time. In fact, Cramer reminded investors that they shouldn't be investing in patterns in the first place.

"If you're going to pick stocks, your job is to look at the company behind the stock you are buying in order to assess its prospects and figure out whether the stock fully reflects those prospects," Cramer said. "Or, in rare times, doesn't reflect enough good at all."

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