Thu, 18 Aug 2011 21:21 GMT
Jim Cramer's content is now being featured on the new Real Money site.
Wed, 17 Aug 2011 21:54 GMT
NetApp is a real blowup, and it puts the blowup right at the feet of Washington. The problem is that even without Washington, it was probably the wrong time to own it, because tech is so, so problematic right now.
You have a triple whammy against tech right now. Europe, where so much tech is sold, right now is going off the grid because of the debt crisis. The U.S. is a mess -- although not going into a recession -- and government spending, which has been a big part of tech sales, is being cut back, in some cases dramatically. Finally, we have studied tech for many years, and it has rarely paid to own tech before the last week of September. We are in the total dog tech days where owning the stuff is totally precarious, as those who have NetApp stock know all too well. ...Click to view a price quote on NTAP. Click to research the Computer Hardware industry.
Wed, 17 Aug 2011 18:49 GMT
Could someone be taking out all of the growth names and shooting them?
I have spent most of the day trying to figure out what's wrong with Deckers and Lululemon and Salesforce.com and Amazon.com and Netflix and Chipotle and so many other growth names and I am convinced the answer is "nothing, except they are all high growth and high growth is being shot."
Sometimes this happens. It usually happens when people feel inflation is going to eat away at the worth of the out years. Sometimes it is because of a blow-up in the cohort, but unless people think that Dell is part of the cohort that's just not a good reason. ...Click to view a price quote on DECK. Click to research the Consumer Non-Durables industry.
Wed, 17 Aug 2011 16:39 GMT
We've got a huge debate raging on line and it goes like this: why did Cramer kill SodaStream ? What were his reasons?
This kind of debate leaves me cold because it is downright silly. The reason why SodaStream has plummeted endlessly is entirely because management told you it won't do as well in the future as it did in the past.
When you analyze the lifecycle of a high flier like SodaStream you must always accept that momentum plays the largest role in the trajectory. As long as management keeps beating earnings estimates by a mile and as long as it keeps raising guidance substantially, the stock will trend higher. Shorts who bet against it will be trapped. Longs who champion it have something great to talk about. ...Click to view a price quote on SODA. Click to research the Consumer Non-Durables industry.
Wed, 17 Aug 2011 14:33 GMT
This recession watch is clearly going the way of "no recession." Whether it be the spring in copper, the terrific Baltic Freight levitation, the snapback in oil or just the overall sense that the earnings aren't bad enough to warrant as much worry, we don't have enough to believe we are going to go into the negative in the United States.
Of course it is unnerving to ever declare "all clear," because we know that Washington is as dysfunctional as ever, and to think that we are in "good" shape over in Europe is just fanciful.
But how can we not believe something good is happening when Target blows the numbers away and when Staples and Home Depot and Wal-Mart do the same. Are we supposed to rely more on the negativity of Dick's , which talks about "food fights on cable" in Washington, and on the caution of Saks than we are supposed to focus on the innate demand that is so unexpected? ...
Wed, 17 Aug 2011 10:06 GMT
So far Urban Outfitters is in a class by itself in saying that the last 10 days leading up to its conference call have been disastrous in at least one of its divisions, Anthropologie. I am still reeling from that startling statement and have tried to back it up with others to be sure that URBN isn't something unto itself.
I didn't get it from Home Depot which didn't have anything negative to say at all. Last night, when talking to Steven Sadove, the CEO of Saks, I heard that the days leading up to the quarter have been business as usual, consistent with excellent metrics. I didn't hear it from Howard Schultz Tuesday either with Starbucks seeing no slowdown.
But last night on the Dell call we got lots of evidence that the consumer demand is "weaker and a bit more uncertain," which translated into a hideous outlook that sees revenue growth going from up 5%-9%, totally respectable, to 1%-5%, completely unacceptable, and hence why we are seeing so much selling. ...Click to view a price quote on DELL. Click to research the Computer Hardware industry.
Tue, 16 Aug 2011 22:34 GMT
So will people say Dell is Apple? Will they say Dell is the consumer? Or will they say Dell is, well, Dell?
In this market, it doesn't even matter. They will say "sell Dell" and everything else for that matter. This is the big problem with owning tech right here. It's the wrong season. It's when companies blow up and it is only made worse by weakness in Europe and worries by the consumer. If Urban Outfitters' Anthropologie can see 10 days that shook the world -- 10 horrible selling days leading up to today's conference call -- how is Dell going to be doing? Anyway, Apple's got the whole market frozen with the darned iPad.
Tech, like banks, like companies that need the government to make their quarter, must be sold. Every time we get one of these rallies, it's just another selling opportunity. There is nothing that is going to be so missed that you are going to regret it. ...Click to view a price quote on DELL. Click to research the Computer Hardware industry.
Tue, 16 Aug 2011 20:09 GMT
Don't you feel that at the last minute, sellers came in because they didn't want to be long for the big bank raids in Europe? Don't you feel that people wanted no overnight exposure, even though there is supposed to be a short-ban, because you know that the bears have figured out a way to get around it?
That's what it felt like to me. Just a big "Head for the hills!" as our markets have stopped mattering when it comes to Europe. ...
Tue, 16 Aug 2011 17:44 GMT
We're back in the world where stocks fall so much faster than they rally that we have to take into account we are simply nowhere when it comes to the averages or individual stocks.
We are not at a level where we have any footing and we are not at a level where we can handle weakness from overseas.
We are at some level where we can cascade with no floor, for certain. Right now, again, as we had last week on the way down, no sense of whether any particular company is doing well. And I want to make it clear that I don't like lockstep in either direction. ...
Tue, 16 Aug 2011 16:11 GMT
We want to delink. We want to be separate from Europe. We want to say, "OK, industrial production, excellent; utilization, terrific; we're coming back." We want to say, "Look, Japan kept us back and Japan's now going in the right direction, so that country can be the engine driving us."
But the problem is that Europe's woes are too big, and the fallout from failed strategies too large, to say, "We're out of the woods."
Now it is awfully binary. If Germany and France do the right thing, we are going to rally. What matters, though, is that the flipside is true, too. ...
Tue, 16 Aug 2011 14:47 GMT
Not only would I take the pledge of Howard Schultz, the Starbucks CEO, not to make political donations until the gridlock in Washington is solved and leadership restored, I would also use the weakness to buy his company's stock.
Here's why: My fantastic CNBC co-host Melissa Lee this morning asked Schultz a terrific question about coffee pricing and how J. M. Smucker just cut prices by 6% because of a dramatic decline in futures prices for green coffee. Smucker is huge in coffee, producing Dunkin' Donuts and Folgers, among many other brands. Melissa wanted to know if Starbucks is going to cut prices. Schultz did not say he would. Given that the company just put through price increases responding to a previous run-up in the futures, gross margins could go up dramatically. Considering that sales have not been hurt at all by any of the recent political turmoil, again something Schultz confirmed, you may have the makings of a nice upside surprise.
Layer this on top of the fact that Starbucks had a 30% same-store sales increase in China, which is incredible, and that expansion goes on apace and the American stores are going great guns, and I think that Starbucks, which is down sizably from when it reported, has to be bought here. ...Click to view a price quote on SBUX. Click to research the Leisure industry.
Tue, 16 Aug 2011 09:57 GMT
Did anyone actually believe that all of these crises in government would be good for the economy? Did anyone think that Germany was in as good shape after the last month as it was before?
Yet when a weak German GDP number came out this morning -- 0.1% growth, down substantially from 1.3% growth in the previous month -- markets nosedived as if people must have been thinking that the little engine that could runs no matter what it's fed, including the thin gruel of total lack of confidence, fiscal austerity and worldwide tightening and indecision.
I've been on recession watch ever since we started the horrendous budget process that led to the near-disastrous deal, and I have been waiting for data like this to shock people into realizing how much damage was really done. The answer is: a whole lot of damage. ...Click to view a price quote on JNJ. Click to research the Drugs industry.
Mon, 15 Aug 2011 20:06 GMT
Maybe this is just one big Bank of America rally. Bank of America is the single biggest Achilles heel in this market, and we all kind of know it. I say "kind of" because there's been so much macro news flying around that it's real difficult to believe that any one stock could have a hold on a market.
But Bank of America by the middle of last week had become the focus for so many, because it is the biggest bank in the country and, arguably, the baddest one, because unlike all of the others, this one has open-ended losses coming from mortgages.
The sale of part of the international credit-card business is a reminder that Bank of America has some very good assets that can be monetized, even if it means funding the bad -- the mortgages -- by selling the good -- credit cards, which are a terrific business, as the best-performing major bank stock, Capital One, can tell you. ...Click to view a price quote on BAC. Click to research the Banking industry.
Mon, 15 Aug 2011 18:19 GMT
Nice interlude? Or is it the real battle-tested deal where we know that we have withstood an onslaught and we have bottomed? These are the questions on everyone's lips, and I think that the idea that all is well is as fanciful as the "all is bad," theory, what I call the "We're all gonna die," rap from Billy, in his chit-chat moment with Dutch Schwarzenegger in the movie The Predator.
Both extremes are wrong, because there are things that can go wrong and things that can go right, and they are unknown right now.
What's up in the air? ...Click to view a price quote on MMI. Click to research the Telecommunications industry.
Mon, 15 Aug 2011 14:29 GMT
What I liked most about Google , its endless activations worldwide for Android, 500,000 a day, something that made it seem like they will stop at nothing to defeat Apple .
An open system can often beat a closed ecosystem. That's been the way of the Web. Suddenly, it's ecosystem vs. ecosystem and that's not a battle that I think Google can win.
I know they say they checked it off with HTC and Samsung, but why would they subsidize Google-Motorola? I can't imagine they would. Was Google very worried about patent protection and this is a way to protect itself as Motorola Mobility has scads of patents? Or was it a way to say "we can't make money here with being Switzerland forever so we might as well throw our lot in with the one we can buy." ...Click to view a price quote on GOOG. Click to research the Internet industry.
Mon, 15 Aug 2011 09:31 GMT
So oil companies are cancelling their deepwater drilling programs, right? And so are the national companies? Has to be, right? Isn't that what the futures are telling us? Isn't that what the stock action is telling us?
Then what exactly would be the greatest short of the era? How about a public company with operable deepwater rigs or, even better, some that are under construction? Wow! Get me to stock loan, I want that short on!
Or, wanted it on. ...Click to view a price quote on RIG. Click to research the Energy industry.
Fri, 12 Aug 2011 19:40 GMT
Is it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost?
Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be 1987 playing out, where the market's decline presaged nothing other than a momentary loss of consumer confidence?
It's hard not to think about that when in the last 36 hours we've had decent employment claims, some really good numbers from retailers Ralph Lauren , Macy's and Nordstrom , not to mention aggregate retail sales numbers. It's hard not to question the recession thesis when Caterpillar comes on national television and says orders are looking real good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe. ...Click to view a price quote on RL. Click to research the Consumer Non-Durables industry.
Fri, 12 Aug 2011 14:43 GMT
We just want nothing. We don't want up. We don't want down. We don't want any more futures pickoffs, like that absurd up-opening tied to Europe being up, which was up because we were up.
We just want calm.
I am a huge believer that these gyrations are real bad for business. They mock price stability in both directions. They show tremendous frailty that is entirely unrelated and divorced from the business world. ...
Fri, 12 Aug 2011 11:20 GMT
The Europe bears are erudite, filled with facts; they understand the poisons of sovereign debt and recognize the unsustainability of the euro.
What they don't get is how to make money with it other than by slagging the banks and betting that they will have to raise capital so they can cover their shorts on the offerings.
The grand slam, the Lehman, might elude them, though -- Lehman is self-destructive to the bear case because it was instructive to governments worldwide. ...Click to view a price quote on C. Click to research the Banking industry.
Thu, 11 Aug 2011 20:17 GMT
We just saw 400 of the most hated points I have ever come across. We saw endless buying, across-the-board buying, which is a sign of weakness, not of strength. That's a sign of short-covering, not fundamental change.
In fact, if it weren't for Cisco and the potential bank short ban, plus 10,000 fewer jobless claims, we would have had no reason to go up whatsoever. And, dare I note, we don't go up as many points as we go down.
We just flop and chop around for 400 points at a pop. ...Click to view a price quote on CSCO. Click to research the Computer Hardware industry.
Thu, 11 Aug 2011 18:43 GMT
Nice action today.
Principally because it makes us forget how horrible yesterday was. If the market stays up, the last-hour buying that accompanies an up day (courtesy of the rebalancing of double and triple exchange-traded funds -- the machine buying) will put whip cream on top of this bullish concoction.
And I hate it. ...
Thu, 11 Aug 2011 15:32 GMT
We will get a bottom when the market does nothing on bad news. We will get a bottom when the market catches its breath. We will get a bottom when estimate cuts are factored in. We will get a bottom when we have political leadership that addresses the bigger issues haunting us: euro/bank capital/debt ceiling.
Without these big issues addressed and with the Band Aids of short bans in Europe and Fed easy money, we could bump along here for some time. The good news is that now that the New York Times is talking in the lead story about how this might be like 2008. We are getting the recognition that there are real problems.
When you consider that insider buying is off the charts and retail selling is back to its worst levels of 2009 -- March, the generational low, courtesy our own Doug Kass -- then you do have some inflection here. ...
Thu, 11 Aug 2011 10:24 GMT
You would think after 2008 we would figure out a way to make it so you couldn't just take bank stocks down to zero and profit from the decline. You would think that we would have some of safeguards or ammo or defenses that would stop the madness where a fairly solid bank can stem the crash, and yes, it is a crash, of both the confidence and the stock price.
But you can't. For a variety of reasons.
Let's take this Societe Generale. First, I have no idea of how SocGen is really doing. It's a French bank. They are pretty opaque. They might be sitting on gigantic losses. They may have all sorts of sovereign debt. They are a global player which has now become a code word meaning "we have lots of derivatives everywhere so look out." ...Click to view a price quote on BAC. Click to research the Banking industry.
Wed, 10 Aug 2011 21:41 GMT
Unforgivably nasty at the close. Just a total breakdown. Two hundred points down in the last hour. Total fake-out.
And no bottom in sight.
But, the same could be said for yesterday....
Wed, 10 Aug 2011 18:56 GMT
Is this the long-awaited move up in gold-miner stocks? Is that what the stocks of Agnico-Eagle Mines , Barrick Gold , Goldcorp , Randgold (52-week-high) and even NovaGold are saying?
Seems like it.
I have mixed emotions on this one. First, these stocks have been horrid, in part, because costs for digging gold are way out of control and, in part, because the companies are all serial disappointers. They often dilute their shareholders. They pay next to nothing in dividends. They are without a doubt the most peripatetic and diffident of stocks when it comes to what they actually mine. ...Click to view a price quote on AEM. Click to research the Metals & Mining industry.
Wed, 10 Aug 2011 16:58 GMT
Someone listened to the Federal Reserve Chief, who gutted any opportunity to make money in Treasurys, and went and got some yield.
That's the only explanation that I can come up with for the incredible resurgence in the master limited partnerships today. Almost all of them are up, as witnessed by the moves in Enterprise Products Partners , Markwest Energy and Energy Transfer Partners .
I don't care that I sound like a broken record about yield, but a portfolio of master limited partnerships that yields roughly 6% is there for the asking. These mlps are amazing in their comebacks as anyone who bought Linn Energy Limited Liability the other day and has caught a monster move knows. ...Click to view a price quote on EPD. Click to research the Energy industry.
Wed, 10 Aug 2011 15:02 GMT
No battle plan survives contact with the enemy. Some say the great war theorist Sun Tzu was the first to observe this truth. Others credit the visionary von Clauswitz and still others give the nod to Napoleon.
Doesn't matter. These three great minds thought alike and while their admonitions were meant for the battlefield and the plans made by the generals before the shooting starts, many are anxious to apply the advice to this battlefield, whether it be the high ground of Dow 11,000 or the Sunken Road that is Dow 10,000.
For as long as I have traded and invested I have lived by that thought. Yet, that does not mean you shouldn't ready a plan nor does it mean that the contact itself derails common sense. ...
Wed, 10 Aug 2011 12:00 GMT
How much damage was done by the budget disaster in our country? How much damage could a collapse of the euro and the banks in the euro states do to the world's economies?
Those two albatrosses are what can reverse any rally, stop any bull in its tracks. We are all trying to figure out how much impact these have had and could have. Does an ineffectual president and a fractious congress equal a 1% decline in GDP from levels that were low already? If Italy goes bust does that mean we go into a second recession?
You have to visualize these crimes against the economy on a calm day, because on a down day they both seem unfathomable and on an up day they can seem trivial. ...Click to view a price quote on BAC. Click to research the Banking industry.
Tue, 09 Aug 2011 23:01 GMT
You have to hand it to Bernanke. What did he want to do? I think he wanted to do all he could to keep the economy limping along, get the stock market back on an even keel and at the same time not cause gold or oil to spike. He did it. He totally delivered.
Of course, it is just one day. And for some reason, I feel that I am now one of about a half-dozen Bernanke supporters (the others all being Bernankes themselves).
But you have to admit that he did accomplish something that nobody thought he could do 24 hours ago: He gave us stability on a couple of fronts, so the bulls can regroup. Bernanke isn't trying to pump up the stock market as much as he is trying to combat the President -- who is just dreadful for business and hiring -- and the anarchists in Congress who will never compromise and, in some cases, may actually want us to default. ...
Tue, 09 Aug 2011 19:55 GMT
We've got an up moment, so let's take stock not of the upside but of what will still be terrible even after the Fed told us stockholders not to worry, we will have competition from bonds. Lets' go over what's not going to be cured by the Fed's statement or its desire to keep rates low until 2013 (or 2015 for that matter):
The abysmal state of affairs in Washington as expressed by Standard & Poor's correct downgrade. The total lack of leadership by the president, who seemed out of his depth yesterday. The possibility of a recession, maybe a severe one in 2012. Europe, and the coming 2008 moment of collapse that could be centered on banks that are poorly capitalized, like our banks in 2008 before they were forced to fundraise.
It is important to recognize that all four are playing a role, and all four can't be reversed by the Fed today. ...