Cramer was hard-pressed on Monday to find a reason for the Dow’s 254-point decline. Could basketball phenom LeBron James’ 60 Minutes interview have had the opposite effect of those with President Obama and Federal Reserve Chairman Ben Bernanke?
Doubtful. And Treasury Secretary Geithner’s statement that the banks need more money is just as unlikely a cause. It’s not like that was a revelatory news leak of any kind. The same goes for White House’s soft suggestion that General Motors CEO Rick Wagoner had to go. The company lost $70 billion in just two years, so is Wagoner’s ouster any surprise? Surely, the market wouldn’t react so severely to that.
Oil dipped almost $4 as well. But that’s after a run up to the low $50s. And with the sector’s stocks trading as if crude fetched only $35, Cramer thinks we have some wiggle room here. Besides, who doesn’t like gas prices under two bucks?
The only real cause for concern that Cramer sees is Lincoln National’s withdrawal of its application for federal help, because the company does need it. As a result, Hartford Financial , MetLife and the rest of the insurance group took a hit. If the government stepped in and guaranteed these companies’ policies and promised to pay off any claims the way it did for AIG , Cramer said, that would put shareholders at ease. So again, is this news enough to cost the Dow over 250 points?
Cramer doesn’t think so. That’s why he recommended buying into this weakness. Maybe the market drops another 3% to 5% – at most – though he said we might have seen a bottom in the last 20 minutes of today’s trading session. Worst-case scenario, though, he doesn’t expect the Dow to dip below 7,000 or the S&P 500 below 750, which is 5% down from here.
The biggest risk right now might be missing the next rally. The big money managers who lost out on March’s 21% jump should pour their capital into the market soon, Cramer said. They’ll have to if they want to beat the averages. When that happens, stocks will go higher.
So any dip, however big, is a gift, Cramer said. Investors should see that as an opportunity and start buying.
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com