Posted on 11/03/2006 10:07:13 AM PST by SirLinksalot
He made the call before the bust in 2000.
Not very.
If Jim "The Screamer" Cramer is predicting Dow 13,000 next year, you'd better start thinking about moving into cash.
Generally, this would be my sign to get out. When everyone is a bull, it's time to sell - it means eveyone's money is already in the market! But if this guy has a history of being right, I'll certain defer to him.
But I think he's right that the DOW is going higher.
It all sounds quite reasonable. I wouldn't count on oil remaining low for that long, though. It doesn't take long to "burn through" our inventory.
Thirteen, For those times when you that little extra, Ummmph.
If oil goes up, oil stocks go up and everything else goes down.
If oil goes down, oil stocks go down and everything else goes up.
I use a mixed portfolio, about 1/3 oil stocks, it stays pretty stable.
I think he's a pump and dump scammer. I took his advice on Topps and it took 5 months just to break even. But I bet he made a bundle on it when it popped for about two hours the morning after he recommended it.
If it was 100 years ago, he'd be selling snake oil.
So listen to him and read between the lines...but don't take his advice on individual stocks.
Cramer is right more often than he's not. He freely admits his mistakes and doesn't try to cover for them.
I think it'll climb towards 13,000. Back in 2000, the average P/E (Price/Earnings ratio) was very high (about 40) and pundits were saying that a P/E of 40 will now be the norm. Well that didn't work out so well for them. However now, the average P/E is back to about 20.
P/E essentially comprises of the company's risk and it's expected profit growth.
If Cramer is vastly excited about some stocks taking off, I would say that they have just peaked. The trick is to figure out what he will be excited about a month from now, buy now and sell when his excitement peaks.
I bought into a bank. They always have money.
He can't trade for several days after he mentions a stock on air. It's his rule.
Up another 1000 points on the Dow is only 8.3% Hell, money markets are paying 4.75% right this minute.
Plus the yield curve is still inverted; and that inversion has been a superb predictor of recessions since the end of WW2.
On the other hand, if I'm that worried, it may be a great time to buy stock! :)
With real estate collapsing, the dollars go into the stock market. At least that is how it was explained to me by an investor several years ago.
While I hate his show, I think he's right about the general market having legs. Our economy is and has been pointed in the right way for a while and I think the markets are STILL a little undervalued. Corporate profits are higher than they've been for almost a generation. That's with our current, UNDER stated profits (due to Sarbanes-Oxley).
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