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Cramer jälle:
The market's not always a clouded enigma. The other night Maria Bartiromo was interviewing me on CNBC about this never-ending rally. She posed a question so perfect and so simple, both in its tone and its content, that it defines the whole era that began Sept. 21.
Shaking her head, she asked me when we had ever seen such a time like this, a time when war raged, when oil prices came down, when jobless numbers skyrocketed, when earnings were terrible and the market just wouldn't stop going up. I replied: You just outlined the exact scenario of the beginning of 1991, the first great buying opportunity of the previous decade.
Very rarely are you glad about being older and having traded in more than just a few markets. For me, the period around 1991 was as preposterous as this one. But it wasn't for my wife, Karen. And I am going to give you that story to read and remember even as you puzzle over this ongoing story that has befuddled so many.
Then as now, the market had fallen huge, just huge. Then it was the S&P 500 and the Dow; this time it was the Nazz. Then we had a country that had enjoyed a prolonged economic expansion, although obviously not as strong as the one we just finished. As long as the war was in front of us, and it was uncertain, the market moved in fits and starts.
We were a nation that doubted our own capabilities and had been wracked by a terrible S&L scandal that had sapped all forms of investment, from real estate to construction. Again, that should sound familiar.
We had the war in front of us this September, and we have just gone through the telephone debacle, where billions were spent to create overcapacity and we had to pay the price of that overcapacity. In retrospect, the S&L debacle was far worse than the telecom debacle because we created very little with the S&L scandal; at least we got some fast phone lines out of our own era's boondoggle.
I used to complain endlessly to my wife, when we were trading together, that our country could not get beyond the destruction of so much capital and the obliteration of so many banks. I told her that we had an inflation problem and a recession problem, that stagflation was with us and that, in that environment, stocks had to come down.
I made the point, over and over again, that the only thing that could save us was takeovers, and they weren't happening. Karen, on the other hand, looked at the world quite differently. She never bought into the notion that things had to work out for stocks to go up. She just said that people either feel better and buy stocks or feel worse and sell them. And if you could tell her what made people feel better, she could anticipate a buying wave.
She said that in the end, big money was human; it reacted to events, and if the events went well, it felt it had to pounce. She always described big money as this seething pent-up beast that wanted nothing more than to run down the Street and buy every stock in sight. She couldn't be bothered with valuations or by analysts who liked or hated stocks; she said those too, swung with the breezes of good fortune.
I told her about all of the mumbo-jumbo I had learned at Goldman Sachs, about the business cycles, and about how stocks couldn't be bought in some environments and could in others and how growth had to be purchased reasonably and how multiples could only expand when interest rates were declining. She would always say "yada, yada, yada," when I went into a Goldman litany. Finally, in the last few weeks of December 1990, when she could no longer take my incessant badgering as the market continued to falter but the banks stopped going down, she picked up the phone and booked us for a hotel in St. John in the Virgin Islands. (We were still childfree at that point!) "When is this war of yours going to begin?" she asked.
I said it would be around the Jan. 15. "And how quickly will we win?" At the time, the nation thought we would be in a long war with Iraq, courtesy of the legacy of Vietnam. "Two weeks," I said. You simply can't compare the North Vietnamese army, a nation of fighters trained for 20 years before we got there, to anybody else on earth. She booked us for two weeks, until Jan. 14 and said, there, we're done talking about it. We will buy the day we come back. I reminded her that she was a chartist and she constantly told me that all of the charts stank. "So what," she said. "Sometimes events are bigger than charts, and they can cause a turn in all of them."
I never knew where she got this stuff, but it always rang with a degree of authenticity and irascibility that I could never challenge. The day we got back into the office was the day that Bernard Shaw, then of CNN, was hiding under the table describing the bombing. Without a single worry or emotion, Karen margined us to the maximum allowed, almost entirely in growth stocks, most of which I hated.
We own more Home Depot than Fidelity, I joked to her that day. She didn't care. She said that if I were right, that the war was swift and showed how great the U.S. is, we would want to own the U.S. as reflected in the Home Depots and the Wal-Marts and the IBMs and the Bristol-Myerses.
Take a look at your charts.
You can see clearly where my wife's buying was. You can almost count the millions upon millions of dollars we made shortly thereafter. If I hadn't traded during that period, I don't know if the parallels would be as striking to me. I know that I would not have been as forceful as I was with Maria. But I remember the anger and frustration so many others had with the tape at the time -- and my wife's total disregard for their bearish inquiries, worries and doubts. People feel great about this rout of Iraq, she would say.
They are going to spend like mad and get us out of this recession. We will be fine. I used to go to parking lots in a half-dozen malls in three states back then to gauge enthusiasm. The lots weren't crowded in November and December and were just plain empty at the beginning of January. By February, you couldn't get into them. This weekend my wife and I decided to go shopping.
We figured that we could beat the Christmas rush, get something done when everyone was still at home moaning about how bad things are. We couldn't get in the lot. Anywhere. Three malls. Too crowded. We ended up going to the movies, where we also couldn't get in the lot. Of course we couldn't, I said. The Taliban's on the run, we are going to catch bin Laden, and you have to feel great about that, great that we didn't relent or listen to the naysayers or fear the radical Muslims or listen to Al-Jazeera.
As we pulled out of the Short Hills, N.J., Mall disgusted that there was no place to park, she turned to me as she would have 10 years ago and said "I am surprised the market's not rallying more." I told her it had been up every day.
"Makes sense," she said, "Probably goes a lot higher -
Kes on kuulnud Crameri raadios esinemas?
Mees esineb väga ilmekalt, pärast seda tahaks parafraseerida Leninit:
Investeerimine on oopium rahvale:)
Kuula Cramerit http://www.thestreet.com/radio/
