Investors eager for American initial public offerings in China may repeat the same mistakes made when a similar trend played out in Japan back in the late 1980s and early ‘90s, Cramer said Wednesday.
“It didn’t work the last time around,” Cramer said, and he doubts it would now.
Cramer’s problem, though, is that the very same strategy was tried in Japan and failed. Whatever early-stage gains these stocks saw were eventually given back, he said, and “over time they all dropped out.” He wondered if the interest in UBS’ report was just a fad, as investors chase higher multiples overseas. He urged viewers not to buy the stocks of companies that may list in China, even though some investors might.
Elsewhere, the market seems to be driven by those who believe the economy will recover and those that do not. After three down days for commodities, the glass-half-empty camp seems to be in charge. Hence the jump in TJX today. Cramer’s favorite play in the group in Family Dollar because it has more room to run.