“Panic is not a strategy,” Cramer told viewers during Wednesday’s “Mad Money.”
Never was that truer than the last 24 hours, where the Dow and S&P 500 dropped 165 points and 1.6 percent on Tuesday, respectively, only to rebound 129 points and 1 percent a day later.
“To me this back-to-back farce, or tragedy if you sold yesterday, should be tattooed, perhaps embossed on the foreheads of everyone who bolted into the weakness,” Cramer said, “of everyone who bought into the propaganda of those bears that constantly hijack the media, make you feel like you had to sell or else.”
Expect still more negativity from the media, though. But before you believe the reports, dump your holdings and sprint for the sidelines, keep in mind the following examples of just how wrong the press can be:
“China Sparks Wide Sell-Off”: The Middle Kingdom’s decision to tighten interest rates prompted the dumping of both commodities and the companies linked to the country. Think Caterpillar , Deere , Bucyrus International and Joy Global . But, as Cramer said, “There is nothing wrong with China. They’re just being prudent.” None of China’s regular orders—for commodities or machinery or even Western fast food—are “going to be cancelled or postponed because of this.” He assumed this was the case, and those investors who did, too, using the dip as a buying opportunity, “made huge money.”
“Goldman Net Slumps 40%”: That’s a year-over-year number, and Cramer, at least when it comes to Goldman , cares only about linked quarter to linked quarter. “Those numbers were spectacular across the board,” he said. Hence GS rising $6 to $159 since reporting on Tuesday.
“FDIC Aims to Shed Some Real-Estate Assets”: This piece was part of the “limitless coverage of how so many banks are going under,” Cramer said, but this story—“FDIC Cancels Rate Increase”—offered a good counterpoint. The latter “makes it clear that things in bank-failure land aren’t nearly as bad as we thought.” The FDIC is cutting its loss projections, not raising them, and canceling a scheduled rate increase for banks because the “agency doesn’t need the money.”
“Caution on REIT Earnings”: This “gem” of a story, as Cramer called it, talked up the warnings coming from real-estate REITS about a gloomy earnings season for the industry. Interestingly, though, the sector exchange-traded fund reached yet another 52-week high. “One of dozens that I’ve seen,” Cramer said, “even as the analysts have been trying to keep you out of these stocks for as long as I can remember.”
These are just a few headlines that were proved wrong. See also the reports on the troubled industrials and Juniper’s , at least initially, “disappointing” quarter if you’re still unconvinced, but hopefully by know you realize that facts trump fear every time. This will be important to keep in mind the next time a gloomy headline catches your eye. Because fear and panic, Cramer said, “have never made you a dime in this or any other market.”
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