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[Beginning of
Cramer's
verbatim
comments for
this segment...]
Jim:
One of the most
natural and
misleading
mistakes that
most people make
is to assume
that the people
who are on TV,
criticizing the
market… bad
mouthing it,
telling you to
sell to avoid
stocks… must be
telling you the
truth… wrong… do
not assume that
commentators who
dislike the
market are any
more honest or
any less self
interested than
those who talk
up the market…
or talk up
individual
stocks… whenever
we hear someone
touting a stock
on television…
we instantly
accept the idea
that they own
it… and treat
everything that
they say with a
healthy dose of
suspicion… after
this vicious
bear market… we
have learned
that much… but
we hardly ever
reserve that
level of
skepticism for
people who bad
mouth the
market.
More often than not…
investors will
assume that people
who criticize the
market either do not
have an agenda or
must not be pushing
one… I mean, if they
are negative… they
must be pure… to
most people
expressing a
negative view of the
market is a way of
automatically
bolstering your
credibility… to me,
as someone who
brought in almost
half of the products
at my old hedge fund
by shorting stocks…
this attitude is
totally surreal…
people who criticize
the market on
television or in
print are not
necessarily trying
to help you.
When someone says
that they like a
stock, they are
immediately branded
a ?…. but when
someone says that
they hate the entire
market… how often do
you think hey wait a
second this person
might be shorting
the market… or might
be underinvested in
it… and is hoping to
knock down stocks so
that he or she can
get a better price
for them… it is easy
to recognize that
many investors need
stocks to go higher…
but perhaps because
the idea of shorting
stocks is less
familiar to most
people… it is much
less common to make
the connection that
some people actually
need markets down…
that is right, they
need them down to do
better… in fact, in
my professional
opinion there is
probably more
chicanery and
dishonesty from the
shorts… in their
interaction with the
media… than the
longs, or the people
who are buyers.
You have got to
remember that there
are people out there
who want to push
prices down every
bit as much as the ?
who want to drive
them up… if not more
so… the other issue
is that the money
managers who come on
television have to
disclose their
positions in any
stock that they talk
about… they never
have to tell you I
am underinvested… so
I am lagging the
benchmarks… I am
getting left in the
dust by my
competitors… so that
it is vital that I
try to knock down
the market to give
myself a better
entry point and do
better than the
other guys.
See if these
managers do not own
anything and are not
short anything,
there is nothing to
disclose right… but
they still might
very well have an
interest in knocking
stocks lower… you
are just never going
to hear about it…
and believe me, at
any given time there
are plenty of time
in the industry who
would benefit from a
broad stock market
decline… and be more
than happy to go on
television and make
the case that the
decline is going to
happen… and
encourage you to get
out… while you still
can… as stocks
become stronger and
a bull market really
gets going… all the
hedge funds who were
either net short…
meaning that they
were betting on
stocks to go down…
with more shorts
ones than long ones…
or they were simply
underinvested and
are now
underperforming…
they are now
becoming more and
more desperate.
Money managers who
have been left
behind by the market
and their
competitors start to
feel like cornered
rats… getting ready
to be butchered by a
virile feline… see a
lot of hedge funds
cannot afford even
one year of
underperformance…
hey come on, I was a
hedge fund manager…
I know this… this is
one of the things
that I am trying to
teach you… you can’t
have more than one
bad year… it takes a
lot of good will
with your clients,
meaning that you
have a pretty darn
good record…if you
want to explain to
them how you barely
made any money at a
time when stocks
everywhere were
soaring… and still
have a business when
you are through… may
I suggest
CONFESSIONS
OF A STREET ADDICT
if you doubt it….
where I detail what
happens when you
fall behind.
You have to be
careful because when
stocks are at their
strongest… many of
these hedge fund
managers… the ones
with the fewest
scruples… will
happily plant
negative stories in
the press and try to
take advantage of
the media to spread
as much negativity
as possible… to get
stocks down so that
they can buy, buy,
buy… I wish that
this was not the
case… it would be
wonderful if we
lived in a world
where everyone was
honest… and no one
ever tried to
manipulate the
market… but since
that is not the
world that we live
in… the best way
that I know how to
protect you from
this kind of
chicanery is by
shining a light on
it… and making sure
you know what to
watch out for.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Remember to always
be on guard..
because the people
bad mouthing the
market aren’t any
more altruistic or
honest than the
people who come on
air and tout
specific stocks.
[verbatim recap]
[end of segment]
Read Jim's next Segment
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