Jim Cramer says the market got the news of a Brexit all wrong. What was once regarded as a catastrophe for stocks was actually just what would push the averages to new highs on Monday.
"What was widely hailed as a disaster, something that the alarmists explained to us was the end of the world, turned out to be the best thing that could have happened to our equity markets," the "Mad Money" host said.
Britain's vote to leave the European Union was the big unforeseen event that many investors weren't ready for. It was also widely not understood. Therefore, hedge fund managers who did not understand the issue pulled out of stocks because they thought they were on the wrong side of the trade, which triggered a massive wave of selling.
It turns out the Brexit was actually a blessing. The event prompted interest rates to fall lower than otherwise expected, and it put the Federal Reserve on hold. That meant the bond market competition from stocks and demand for loans simply went away.
"Yes, Brexit was good, not bad for our markets," Cramer said.