Friday, May 8, 2009
(Cont'd from above)...

Jim (cont'd):   

As long as there are endless and harping critics of this rally that spring up, as if by magic... Remember all of those people, just yesterday that I derided, for saying that this market was over, because interest rates moved up a microscopic amount... Well, as long as those people keep howling and keep protesting and keep telling you that your wrong to stay in the market, we will work our way higher... The "bank nationalists" who told you to sell every bank, because they're going to be seized by the government... The "inflationists"... those people who told you to sell stocks because inflation is back... The "depressionists" who told you that oil and gas and minerals would never bottom...

They are all lurking... waiting for another down day like yesterday to shake you out, to tell you the bull market's over... You know what they are?... They are the fuel... the fodder... for taking us higher and higher...

Remember yesterday when I said that people who try to talk this market down come on TV, on websites and newspapers everyday, and how you should question their motivations?... You should question their motivations, and you know why?... Because they are short stocks, and don't tell you... Or they don't own enough stock, and they want the market (to dive, dive, dive - sound), so they can buy, buy, buy... Well, we saw them today... Oh boy, you know what they were in? They were in panic mode... paying up for any bank stock that moved. They were all short... they need to bring them in... they're underinvested now that the stress test grades are in... and, it turned out... I don't know what kind of bell curve they were using, but it looks like no one flunked at all...

The shorts... the underinvested... they bought the "C" students today... banging the table... study hard and soon get As... C students that have hit the books and now look magnificent...

Stocks like Wells Fargo (WFC), which issued millions and millions of shares at $22 just this very morning to meet the government's stress test... Now, usually, a huge deal like that - one that raised $8.6 billion - it would just murder a stock... the much supply?... Just cap it, just crush it... But what happened, after the stock was priced at $22?... Did it go to $21 or $21.50 or maybe $22.25? Uh uh... Institutions that didn't get all the stock they wanted on the deal proceeded to buy millions of shares. What did they pay? First they paid $23... How about $25? Do I have $26? Do I have $27?... And they brought it up to $28... And you know why it stopped at $28?... The (closing) bell rang.

You made $6 (a share) if you bought Wells Fargo today... $6. Come on, that's amazing... The same thing will happen to Bank of America (BAC), believe me... as that "D" student or, worse, a gentleman's "C"... and no doubt heads to the Dean's List...

The buyers know what this is... It's a once-in-a-lifetime move... You know, make that a twice-in-a-lifetime move... to accumulate the financials at a ridiculously low price... as almost all of them were priced... not that long ago... for seizure, for nationalization... as the professors, as the columnists went out and told you they're all worthless... They were priced too cheaply given the housing recovery that we're now seeing that we're going to be late on with our prediction... and the fact that the government is showing forbearance... a technical term for looking the other way... on the bad loans, because soon the bad loans will be good.

Why do I say "twice in a lifetime?" Because this is exactly what happened in 1991...

I know it. Stocks doubled and doubled again... I bought Citigroup (C) at $6 - it went to $12. Went to $12 - went to $18. Went to $18 - went to $24... Sound familiar?

Twice in a lifetime. Who would've thunk it?

Look, I can tell you to buy this bank or that bank... It doesn't matter right now. I think you can buy any bank right now, and for next week, as the group recovers from its own depression, and from the aggressive short selling, mostly without upticks, that went on for months and months and months here. I'm talking about the bear raids that we all know about... Oh, and by the way, I want to thank so many of you that went to the SEC and mentioned Mad Money in your hundreds of submissions when I went to the website... hundreds of submissions saying to reinstate the rule, saying you heard it on Mad Money...

I am not letting up on this issue... I am not going to... I'm sending my letter next week. I think you should, as I am afraid they will backslide, now that things are looking up. No going back. We need that rule reinstated to stop the next panic, even as I know that some bank short sellers gave up the ghost this week.

Let's think bigger though... let's step back... the Nasdaq posted its ninth straight up week, both the Dow and the S&P had their eighth up week in nine weeks.

I need you to reflect on what's happened here. I need you to think more broadly than the great gains you have if you'd been watching...

The mantra of this show... the mantra of my life... is that you need to stay in the game... You need to Stay Mad For Life... You cannot let the horrid times drive you away from stocks forever...

Next time we are down and down huge... and we will be... I need you to remember days like this. I need you to remember weeks like this... Yeah, I need you to remember months like this, so you remember that it eventually does stop raining... thank you, Mark Twain... and that nowhere in this world can you make money this big and this fast, other than the stock market...

Here's the bottom line...

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The Bottom Line!:     We are indeed watching a rally of historical bullish proportions... that still very, very few people believe in. Most pundits and traders gave up on this market everytime there was a selloff, instead of doing what we are advocating... taking intraday selloff to buy stocks that fall 5-8%... They want one foot out the door at all times. We are urging you, on every down day, to have both feet in... to continue to buy the tech, the oils and the financials... And to remember... remember this moment the next time you feel like leaving the game and giving up... You'll never get back to even that way, and that's what we will be devoted to... that's what we will teach you... that's what we will coach you to do, for as long as they me do this show, Mad Money on CNBC...

[verbatim recap]

[end of segment]

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