Cramer: "The Blue-Chips Are Killing Performance"
Enviado: 3/2/2009 16:56 "The Blue-Chips Are Killing Performance"
By Jim Cramer
RealMoney Columnist
2/3/2009 9:34 AM EST
"Household names = household destruction. That's what it feels like, and that's what I think is really hurting the psyche of investors, not just the terrible returns of their mutual funds.
The owned stocks, put simply, are often the worst hurt.
When you think of Alcoa (AA - commentary - Cramer's Take) and International Paper (IP - commentary - Cramer's Take) and Goodyear (GT - commentary - Cramer's Take), you are thinking about bedrock companies that have been obliterated by this economy. When Alcoa reported, it was awful, and you knew it would not be able to get back to double digits. But this is a stock I always thought of as a minimum of $30. Same with Goodyear -- just locked in a range. IP always delivered something decent -- not great, but decent -- and it, too, seemed $30-$40ish to me.
We are littered with stocks that have had a total complete and utter breakdown. What the heck is GM (GM - commentary - Cramer's Take) doing at $3? That's a $30-40 stock forever. Ford's (F - commentary - Cramer's Take) been a dog, but not this much of a dog.
Consider Sprint (S - commentary - Cramer's Take) -- this is a company that was always considered a decent spec and a decent buy. Does anyone think it is any more than a spec now? Alcatel-Lucent (ALU - commentary - Cramer's Take), another widely owned company that seems near vanishing. This morning we saw Motorola (MOT - commentary - Cramer's Take) slash its dividend.
How many people owned Citigroup (C - commentary - Cramer's Take) of Bank of America (BAC - commentary - Cramer's Take) for their 401(k)s? I always thought of them as gold-standard equities that you bought and held and bought some more.
It is hard to fathom these declines. These stocks are America. They are investing. They are, alas, BLUE-CHIP!
Or they were.
They are vanishing.
Fast.
Of course, it is possible that a whole new crop of companies will come to take their place, that there will be industrials for the new era and these are just relics.
But we need a gradual decline into relic status; instead, it is happening overnight, and it shocks the 401(k) and reminds us that many stocks are just a huge form of risk hidden by a silly mantra of "buy and hold" that continues to be praised by just about everyone. When I reject it unequivocally and empirically, I continue to be ridiculed as a trader.
When will the era of buy-and-hold as the only way to approach stocks -- instead of buy-and-homework -- be over?
What has to happen?
Or will results never matter to this crowd -- buy-and-hold is the ultimate in non-accountability.
So who can blame them for wanting to stick by it? "
(in www,realmoney.com)
By Jim Cramer
RealMoney Columnist
2/3/2009 9:34 AM EST
"Household names = household destruction. That's what it feels like, and that's what I think is really hurting the psyche of investors, not just the terrible returns of their mutual funds.
The owned stocks, put simply, are often the worst hurt.
When you think of Alcoa (AA - commentary - Cramer's Take) and International Paper (IP - commentary - Cramer's Take) and Goodyear (GT - commentary - Cramer's Take), you are thinking about bedrock companies that have been obliterated by this economy. When Alcoa reported, it was awful, and you knew it would not be able to get back to double digits. But this is a stock I always thought of as a minimum of $30. Same with Goodyear -- just locked in a range. IP always delivered something decent -- not great, but decent -- and it, too, seemed $30-$40ish to me.
We are littered with stocks that have had a total complete and utter breakdown. What the heck is GM (GM - commentary - Cramer's Take) doing at $3? That's a $30-40 stock forever. Ford's (F - commentary - Cramer's Take) been a dog, but not this much of a dog.
Consider Sprint (S - commentary - Cramer's Take) -- this is a company that was always considered a decent spec and a decent buy. Does anyone think it is any more than a spec now? Alcatel-Lucent (ALU - commentary - Cramer's Take), another widely owned company that seems near vanishing. This morning we saw Motorola (MOT - commentary - Cramer's Take) slash its dividend.
How many people owned Citigroup (C - commentary - Cramer's Take) of Bank of America (BAC - commentary - Cramer's Take) for their 401(k)s? I always thought of them as gold-standard equities that you bought and held and bought some more.
It is hard to fathom these declines. These stocks are America. They are investing. They are, alas, BLUE-CHIP!
Or they were.
They are vanishing.
Fast.
Of course, it is possible that a whole new crop of companies will come to take their place, that there will be industrials for the new era and these are just relics.
But we need a gradual decline into relic status; instead, it is happening overnight, and it shocks the 401(k) and reminds us that many stocks are just a huge form of risk hidden by a silly mantra of "buy and hold" that continues to be praised by just about everyone. When I reject it unequivocally and empirically, I continue to be ridiculed as a trader.
When will the era of buy-and-hold as the only way to approach stocks -- instead of buy-and-homework -- be over?
What has to happen?
Or will results never matter to this crowd -- buy-and-hold is the ultimate in non-accountability.
So who can blame them for wanting to stick by it? "
(in www,realmoney.com)