Cramer: "The Charts Are Amazingly Bad"
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Cramer: "The Charts Are Amazingly Bad"
"The Charts Are Amazingly Bad"
By Jim Cramer
RealMoney.com Columnist
3/5/2008 6:56 AM EST
"Have you looked at the charts lately? I still carry them around and, frankly, has been reluctant to sit down and look at one after another the way Helene Meisler has for years and years.
But I have forced myself to do so since this year began just to remind myself that this bear market is a vicious one and you better have a darned good reason to buy a stock because you are most likely going to lose money otherwise.
The charts are amazingly bad. The vast majority of stocks are simply awful. You eliminate the oils, the golds, the ags, you have nothing, I mean, really, nothing. You can see that an Avon (AVP - commentary - Cramer's Take - Rating) could rally or maybe a Coke (KO - commentary - Cramer's Take - Rating), and you can make a case for the utilities to bottom on interest rate compares but that's really about it. The banks? They all look like they have no bottom.
Yes, it is right to be bearish on pretty much everything, based on them.
One of the things that I like to do as an exercise is to look at the charts without the names of the stocks at the top to block my bias. I don't want to say "oh, yeah, of course it is a bank, it sucks, don't bother to look at it," for all I know maybe it is the one bank that's worth owning, the Hudson City Bank (HCBK - commentary - Cramer's Take - Rating), so to speak.
That is why I found it so amusing that the single worst chart I found in the book, one that I looked at and said, man, that one's going to zero, was Diebold (DBD - commentary - Cramer's Take - Rating)! Yep, the company that United Technologies (UTX - commentary - Cramer's Take - Rating) bid for over the weekend. This one looked like a perma-short, a stock with a chart of no redeeming value for a business of no redeeming value.
Now, I know what you are thinking, "Cramer's saying because DBD's chart was wrong all the charts could be wrong and it is time to buy and he is a bull."
I am so sick of people called names by everybody, that I am happy to say "sure, if that's what you want to say about me, free country." But what I do believe is that there are moments where we get too negative and even the worst charts can produce some upside.
Right now I feel like that. No, not that there are a lot of DBD's out there. Business in this country is just too horrible and the leadership is non-existent. But the stocks in the books represent now a pretty severe a recession and you better believe we are going to have one if you want to stay negative.
Alas, my takeaway is that I want stocks to reflect a recession but a severe one is avoided. That's been one of the best moments to invest and perhaps that's what could be happening soon.
If you look at the charts en masse you would never say: "Ah hah, this is the time to get real negative on everything." You would say: "Wow, what carnage away from gold, oil and ag." You would say, don't want to be so negative that I miss the possibility if a DBD. Don't want to be so negative that when oil and gas and gold give you chances to get into to them like they did yesterday, that you ignore them.
The carnage in this market is really pretty unbelievable. I am totally on board with the idea that if we do not create some sort of large floor on housing the carnage will continue. At the same time I am highly confident that we are not in the early stages of the decline. That would be too negative.
It's bad out there, and it reflects a real hard recession. If you believe that, let me ask you, what's next? An even more severe recession?
You better believe that housing will decline 20%-25% across the board, not just in Florida and California. In that case just sell everything and go away.
I have hated housing for a long time, but I don't see those levels of decline other than in about one quarter of the country and we are more than half way there in those parts of the country.
Conclusion: be negative, but allow punctuations upward because we are pretty far along in the pullback and the recognition of the steepness of the decline in the economy. "
(in www.realmoney.com)
By Jim Cramer
RealMoney.com Columnist
3/5/2008 6:56 AM EST
"Have you looked at the charts lately? I still carry them around and, frankly, has been reluctant to sit down and look at one after another the way Helene Meisler has for years and years.
But I have forced myself to do so since this year began just to remind myself that this bear market is a vicious one and you better have a darned good reason to buy a stock because you are most likely going to lose money otherwise.
The charts are amazingly bad. The vast majority of stocks are simply awful. You eliminate the oils, the golds, the ags, you have nothing, I mean, really, nothing. You can see that an Avon (AVP - commentary - Cramer's Take - Rating) could rally or maybe a Coke (KO - commentary - Cramer's Take - Rating), and you can make a case for the utilities to bottom on interest rate compares but that's really about it. The banks? They all look like they have no bottom.
Yes, it is right to be bearish on pretty much everything, based on them.
One of the things that I like to do as an exercise is to look at the charts without the names of the stocks at the top to block my bias. I don't want to say "oh, yeah, of course it is a bank, it sucks, don't bother to look at it," for all I know maybe it is the one bank that's worth owning, the Hudson City Bank (HCBK - commentary - Cramer's Take - Rating), so to speak.
That is why I found it so amusing that the single worst chart I found in the book, one that I looked at and said, man, that one's going to zero, was Diebold (DBD - commentary - Cramer's Take - Rating)! Yep, the company that United Technologies (UTX - commentary - Cramer's Take - Rating) bid for over the weekend. This one looked like a perma-short, a stock with a chart of no redeeming value for a business of no redeeming value.
Now, I know what you are thinking, "Cramer's saying because DBD's chart was wrong all the charts could be wrong and it is time to buy and he is a bull."
I am so sick of people called names by everybody, that I am happy to say "sure, if that's what you want to say about me, free country." But what I do believe is that there are moments where we get too negative and even the worst charts can produce some upside.
Right now I feel like that. No, not that there are a lot of DBD's out there. Business in this country is just too horrible and the leadership is non-existent. But the stocks in the books represent now a pretty severe a recession and you better believe we are going to have one if you want to stay negative.
Alas, my takeaway is that I want stocks to reflect a recession but a severe one is avoided. That's been one of the best moments to invest and perhaps that's what could be happening soon.
If you look at the charts en masse you would never say: "Ah hah, this is the time to get real negative on everything." You would say: "Wow, what carnage away from gold, oil and ag." You would say, don't want to be so negative that I miss the possibility if a DBD. Don't want to be so negative that when oil and gas and gold give you chances to get into to them like they did yesterday, that you ignore them.
The carnage in this market is really pretty unbelievable. I am totally on board with the idea that if we do not create some sort of large floor on housing the carnage will continue. At the same time I am highly confident that we are not in the early stages of the decline. That would be too negative.
It's bad out there, and it reflects a real hard recession. If you believe that, let me ask you, what's next? An even more severe recession?
You better believe that housing will decline 20%-25% across the board, not just in Florida and California. In that case just sell everything and go away.
I have hated housing for a long time, but I don't see those levels of decline other than in about one quarter of the country and we are more than half way there in those parts of the country.
Conclusion: be negative, but allow punctuations upward because we are pretty far along in the pullback and the recognition of the steepness of the decline in the economy. "
(in www.realmoney.com)
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