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Cramer Slaps Smack-Talking Kodiaks

The naysayers still refuse to believe in this market, Cramer said Wednesday. Despite the Dow’s surge past 7,500, 8,500, 9,500 and now 10,000, these “nattering nabobs of negativity,” as Cramer quoted William Safire, are screaming sell for any number of reasons. Mad Money viewers should expect the same once the bellwether index hits 10,500.

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“It’s what bears do,” Cramer said. “They find new ways to hate the market.”

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The problem, though, is their flawed reasoning. Here are a few of the excuses they’ve offered to discount the huge run we’ve had since early March:

As long as the transports were struggling, the market wouldn’t move. Truth: The transports are “massively outperforming” the other indices, Cramer said.

Gold prices north of $1,000 mean inflation’s a threat, and that’s bad for stocks. Truth: The price per ounce has reached past $1,060, and the Dow breached a crucial level on Wednesday regardless.

Alcoa’s earnings report would set the down for a miserable earnings season, giving investors plenty of reason to sell the market. Truth: “Alcoa delivered a bang-up quarter,” Cramer said.

Interest rates would climb as a result of the weak dollar, ruining stocks’ competitive advantage. Truth: The Federal Reserve has kept rates steady, at least for now.

The bears also hoped that Intel would confirm the weakness in PC demand that Dell complained about. What happened instead? Intel reported “its largest quarter-over-quarter sales increase in 30 years,” Cramer said.

This last point is important because similar levels of performance by Intel the company historically have meant “monster outperformance” for Intel the stock, Cramer said. Every time the company’s gross margins have jumped to the 62% range from the 51% range over the past 20 years, INTC has surged much higher than the S&P 500.

Case in point: In 2003, Intel’s gross margins made just such a move from the second to fourth quarter, and the stock shot up 51% compared to 11% for the S&P.

With Intel’s costs and inventories down but its output and sales up, in addition to the rebound in PCs and the chips that power them, Cramer expects the stock to hit $25 a share. And that’s without the company yet taking advantage of the “mobile Internet tsunami,” as he calls it.

So what’s the bottom line? More negativity from these bears is on the way. But they’ll be discredited, just as they have been all along.

“Don’t be fooled,” Cramer said. “The bears aren’t making arguments – they’re just making excuses.”

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