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Cramer advises stuffing the mattress
About three months after his TV special encouraging Nascar types to support America by investing in the stock market, and days after apologizing for his lousy investment advice, cable TV's professional investment screamer, Jim Cramer, "went on the Today show this morning to virtually beg Americans to pull all the money they might need in the next five years out of the stock market, no matter what the cost."
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Comments (10)
With one big exception: he says (right now on his show) that if it's an IRA or 401K, do NOT sell unless you at within 5 years of retirement. He was talking to individual people who play the market with extra savings, the kind of people that watch his show.
October 6, 2008 7:00 PM | Reply | Permalink
BTW, I'm not one of those kind of people. But when there is something going on with the economy, I sometimes tune in to see what he is telling his viewers, because with all the "calling in," and his answers to those calls, it's input about what is going on.
But yeah, he's telling the local ladies' investment clubs, time to disband for a while.
October 6, 2008 7:02 PM | Reply | Permalink
If they take his advice, and rush to do as he recommended, he will cause a market crash. Does that guy think that average older persons are going to hear anything other than: If you need to survive for the next five years, get out now.
October 6, 2008 7:19 PM | Reply | Permalink
So Liam, do you think he is wrong? The stock market is now and always has been a risk--there are no guarantees there, you could lose everything (it has been known to happen.) Personally, I think that he is quite right--if you are on the verge of "retirement", get out of the market now.
October 6, 2008 7:30 PM | Reply | Permalink
All that those people heard that loud mouth shouting was: Fire, in a crowded theater. The more people rush to withdraw everything, the more the market will collapse, and a lot of people will be ruined.
What do you think will happen if those people rush to sell. Then the market will drop like a rock, and a lot more people will panic, and all rush to get out too. Then you will have a global depression that will take decades to recover from.
October 6, 2008 7:50 PM | Reply | Permalink
When someone with Jim Cramer's wide audience says "SELL, SELL, SELL!", conventional wisdom tells us that the market is at or near the bottom of the cycle.
Jim Cramer helped drive the Dow down 800 points earlier today; conventional wisdom narrowed the loss to 300 points before the close.
Conventional wisdom is right about as often as Mr. Cramer.
October 6, 2008 7:38 PM | Reply | Permalink
This is when you know your getting close to a market bottom....Seriously, the S&P 500 is 30%+ off its top, the MSCI EAFE index is off 48%+! Was Cramer advising everyone to sell last November when the markets topped? This is when smart money makes money....by stepping in when idiots are running for the exits after the fire has already burned the house to the ground and getting it at fire sale prices.
October 6, 2008 8:36 PM | Reply | Permalink
Cramer is as accurate as anyone else on guesses like this.
Which is to say not very. Here is a more optimistic (but I hope still realistic) assessment:
Sure its not going to be pretty...but the turnaround is going to be before the end of 2009. By this time next year the DOW will be well over 10,000 perhaps.
The EU bank situation is going to resolve favorably long long before that.
The CDS situation is being de-fused as we speak and is a soft landing situation anyway.
The Dow may wind up in the 7500-8500 range, but so what? Over 10,000 the market was overvalued anyway and we all knew it. People forget that at one time P/E's over 30 were considered insane.
Once we reach that floor it will surge back up. There is a hydraulic bull pressure on the market from all the money out there and don't think the big pension funds like CALPERS are going to start putting all their money in AAA municipal bonds. No, outfits like CVC and KKR are going to continue to pour money into the market even if it is to leveraged buyout funds.
October 6, 2008 9:03 PM | Reply | Permalink
You're all idiots if you're doing what Jim Cramer tells you to do
October 6, 2008 9:31 PM | Reply | Permalink
Still the Nikkei is tumbling while I type here, and I guess we are in for another 20 percent drop by end of quarter.
The TAF just moved its total lending ceiling to 900 billion. Sure no immediate results, but this is exactly the kind of move that is slowing down this juggernaut as managers look at the rapidly growing pool of liquidity the governments are providing. Don't expect quick gratification, just a gradual relaxation of defensive actions.
"Substantial Further Increases in Term Auction Facility Auctions
The sizes of both 28-day and 84-day Term Auction Facility (TAF) auctions will be boosted to $150 billion each, effective with the 84-day auction to be conducted Monday. These increases will eventually bring the amounts outstanding under the regular TAF program to $600 billion. In addition, the sizes of the two forward TAF auctions to be conducted in November to extend credit over year end have been increased to $150 billion each, so that $900 billion of TAF credit will potentially be outstanding over year end."
Exemption to Allow Limited Bank Purchases of Assets from Money Market Mutual Funds
The Board on Monday published a letter granting a request by a depository institution for an exemption from the limits on transactions with affiliates under section 23A of the Federal Reserve Act and the Board’s Regulation W to allow the institution to purchase assets from affiliated money market mutual funds under certain circumstances. The Board is open to considering similar requests from depository institutions.."
October 6, 2008 9:36 PM | Reply | Permalink
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