-- Posted Tuesday, 7 October 2008 | Digg This Article
| Source: GoldSeek.com
Just when things looked darkest yesterday, Jim Cramer apparently saved the day by telling CNBC’s viewers to “Sell everything!” We thought for sure the Dow would be down a thousand points, but when the Mad Man of Wall Street hit the panic button on the Today show, the blue chip index turned miraculously higher, recouping more than half the session’s losses to finish down a less-than-suicidal 370 points. We don’t mean to suggest that Cramer is foolproof as a contrary indicator, or even that we dislike the guy. He’s a smart cookie who knows his way around the investment world, and, occasionally, talking to millions of CNBC faithful, he’ll even put the knock on a lousy stock. (For one, he was all over Boeing’s suppliers a short while back, a few critical days ahead of sellers who trashed the group’s shares because of the machinists’ strike at Boeing.)
This time around, Cramer has advised pulling out of the stock market completely if you are going to need your assets in the next five years. “I thought about this all weekend,” Cramer told the Today show’s Ann Curry. “I do not want to say these things on TV." And you know he’s telling the truth about that, since no one has ever stayed in the public eye for long by telling it like it is. While we don’t doubt that Cramer was being sincere, we would be surprised if he doesn’t find a way to express lovely, Kudlowesque thoughts when he’s on the air in the months to come -- regardless of how relentlessly stocks are falling.
Where We Disagree
Like us, Cramer expects Q3 earnings to be worse than horrendous. But we part company on two key points: 1) He evidently thinks stocks could work their way back to new highs in five years after suffering a further decline of 20%; we see stocks near the beginning of a fall that will take the Dow below 1000, and think it will take a lot longer to recover – perhaps 30-40 years; and 2) Cramer believes the government’s bailout plan, which includes raising the insured limit on bank deposits to $250,000, is a good one; we think the plan is delusional and all but certain to fail, since the U.S. Government itself is bankrupt.
Regardless, anyone who thinks stocks are a buy after yesterday’s 450-point short squeeze deserves what’s coming. The Dow finished the day just below 10,000, but it would probably need to fall to at least 3,000-4,000 before it has discounted a recession that by next Spring is going to make the 1973-4 recession’s nadir look like Everest.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. >From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 7 October 2008 | Digg This Article | Source: GoldSeek.com
