Jim Cramer:TSCM, Mad Money &amp; The Street.com

Top 32. Aug 14, 2002 3:53 PM

» stocksystm - Cramer's Gift

Cramer has a gift for looking like he knows what he's talking about. Obviously, he doesn't have a clue like most of the other "seers" out there.

-- posted by stocksystm

Top 33. Aug 15, 2002 6:40 AM

» Bob_in_CowTown - Re: Cramer's Gift

In response to message posted by stocksystm:

I noticed some stocks such as NVLS that you did not sell out in your aggressive portfolio. IMHO, any reason why you did not sell in the $60 range and instead you rode it down to current levels? Your still ahead on paper for nvls however, based on your purchase price.

Thanks,

-- posted by Bob_in_CowTown

Top 34. Aug 15, 2002 2:08 PM

» stocksystm - Re: Re: Cramer's Gift

In response to message posted by Bob_in_CowTown:

Bob,

Thanks for your inquiry. I sold 1/3 of my position in Novellus Systems at 62 3/8 on March 23, 2000. It's recorded on the "Signals" page. I didn't sell all of it because my crystal ball is pretty foggy most of the time.

-- posted by stocksystm

This Year, It's Time to Follow the Hot Hand

Top 35. Aug 16, 2002 7:20 PM

» Jen_ - Re: Cramer's 10 "Must Own" companies

In response to message posted by Kirk:

repost from above....

Author: JenL_2
Date: September 6, 2001 7:44 AM
Subject: Re: RealMoneyTalk

I'm not a regular reader of Jim Cramer, nor a subscriber to RealMoney, but lately have been listening to his RealMoneyTalk

It seems all he can do is bash tech these days - he says he's "hated tech" for the last 18 months.....I haven't followed him that closely all along - Did he advise getting out of tech Before the March 2000 peak?

Here's a Cramer column from 12/23/99 TSC:

All my stock-working life I have tried to take the rational position. When everyone was recommending the hot funds of the previous year, I would always preach, no, wait, let's look who had an off year and give him the money, and see if he can fight his way back. Often that bad year spurs a manager on to greatness.

But something has gone dead wrong with that thesis. I talk to managers galore these days and the guys who don't get it, well they just ain't getting it. The game has changed. The managers who have missed this move are contemptuous of it. The managers who avoid winning stocks like the plague will not recover this time. They have too much baggage.

That's why I am planning on going with the Janus family for any additional contributions for my kids. Not only that, I am going with Global Tech.

Hold it, wise people, before you criticize me for buying the hottest fund in the universe, before you say I am being reckless and irresponsible, let me tell you a fact of life. The world has changed, and the only ones who are still in denial are the ones who are underperforming and will remain underperformers. Two things have happened during the second half of this decade: Nasdaq won and Janus won. While everyone was so busy trying to mimic the S&P, Janus charted a different, more courageous path. They gave you more than an S&P fund with a brain.

That's why, as an experiment, I am putting any new money for my kids into the Janus family. They are young. They have years to make it back if Janus suddenly becomes a bunch of numbskulls. But I have gone over this issue for a month now, and I keep coming back to the same thing, something that all of the Morningstars and the Lippers are never going to give you with all of their objective ratings. At the turn of the century there were managers who got it, and there were managers who didn't. Janus got it better than anybody.

They get the spoils.

and here he is on 6/26/01:

Smarter Money: Stampeding Toward the Mutual Fund Exits

These Merrill (MER:NYSE) and Applied Micro (AMCC:Nasdaq) blow-ups couldn't happen at a worse time for America's mutual fund industry.

I think the public views mutual funds the way insurance companies view insurance consumers: We are all entitled to one bad quarter or one accident without any real repercussions, but put two back-to-back bad quarters together and the scrutiny goes way up. Now that these earnings shortfalls are coming with just days left in the quarter, I think that fund consumers are going to start bolting from loser funds, tax exemptions or not. Just as with insurance, you can't have two accidents back-to-back and expect that everything will be hunky-dory.

Is it right to bolt after two bad quarters? Yes, I think, all of last year was bad. That's too much of a pattern to stomach. Look for heavy withdrawals and no new money after people see their statements 10 days from now.

Random musings: One of the reasons the mutual funds get you their portfolio reviews so late is that the NASD Regulatory and Compliance rules often tie up communications with shareholders for four to six weeks. So the industry isn't always at fault.

Also, reader Mike H. has an explanation of why the hedge funds, like those run by Dan Benton, take a lot of heat in the conventional press while the mutual funds pretty much skate, despite the far greater impact those funds have on the public: How much money does Dan Benton (or any hedge fund manager) spend on advertising per year, or per month, with The Wall Street Journal? Zero, zippo, nada. OK, how much does Vanguard (or Fidelity, Janus, Scudder, etc.) spend per year (or per month, week or even day)? Mucho dinero! Face it, the conventional media will never seriously bite the hand that feeds them: advertising revenue. Every now and then they might take a nibble but not much more than that. When The Wall Street Journal, Barron's, Fortune, Forbes, etc., need examples of poor performance or mismanagement, it's usually hedge funds or obscure funds or fund companies that incur the wrath of the financial press. Given the sheer number of debacles that we have witnesses in the last year among mutual funds, you would think that we would be treated to some critical analysis of the industry. Won't happen. As long as the advertising dollars roll in, the media will choose to simply ignore this storyline. Vanguard, Fidelity and the other big advertisers of the fund industry are essentially untouchable.

I can't say I agree with Mike on all of this. Fortune, for example, has just hammered some underperforming funds. In general though, outside of our own regular coverage of this industry, I don't see much rigor in the coverage.

Last week a caller on RealMoneyTalk asked Cramer why he bashes tech stocks now when they are down when he was touting some of these very same stocks right up until the tech sell-off in March 2000. Cramer said something to the effect that he like a lot of analysts got caught up in the tech mania, but he turned bearish on tech sooner than a lot of analysts.....but his goal is to be in what is making money and out of what isn't making money. To his credit he let the caller talk, he didn't cut him off, but the caller was right.

Cramer listener and reader beware.....although entertaining.....his ravings just may be a contrarian indicator, like Mark has pointed out before......Jen

OK that was written Sept 01 - On his radio show he's pretty much been singing the same song since around March 2000. Although he actually recommended tech stocks and funds right up to the March 00 peak ....he was pretty fast to flip-flop and go bearish on tech sometime in March 00. Although bearish on tech he says "there's always a bull market somewhere" and his job is to find it. He tends to jump on whatever is going up and bash whatever is going down. So during the bear he's liked value stocks especially the brand name companies found in the local grocery and drug stores. Throughout 01 & 02 he's advised listeners to pare down their tech holdings and diversify into value rather than hold and wait for a come-back and rather than bottomfishing for more tech - and he's been right so far since the Nasdaq just kept going lower lower.

Now he thinks that August 14 SEC certification day was kind of like a "giant library fine amnesty" day - when the worst of the bad ethics news is already out there and he thinks that the market will move forward from here. He's still bearish on tech but thinks that many value stocks have bottomed. He recommends stocks that are cheap, pay good dividends, and have the ability to maintain the dividend....listen to his views in the archives of his 8/14/02 show here:

http://www.thestreet.com/radio/#archives

....infact you can listen to a month of RealMoneyTalk archives at that link and make up your own mind about Cramer.

.....Jen

-- posted by Jen_

Top 36. Aug 17, 2002 11:04 PM

» stocksystm - Great Post

Jen, you are the best for posting some history on Cramer. It's always entertaining to watch Cramer throwing pencils, venting his disgust against corporate looters and hearing his latest diatribe on politics and the market. However, I would never, ever base investment decisions on what he likes at any given time because he is only a trend follower. And following trends will always get you into trouble unless you are significantly earlier than the majority. Recommending the Janus funds in late 1999 was an absolutely horrible call. I put my kids college funds in Janus, like he did. Luckily, I did it in the early 90's.

-- posted by stocksystm

Top 37. Aug 17, 2002 11:54 PM

» Jen_ - Re: Great Post

In response to message posted by stocksystm:

Actually stocksystm - I was trying to point out that although Cramer is a trend follower and was bullish on tech right up to the peak he was also early to turn bearish on tech and has remained so since sometime in March 2000. My Sept 01 post was critical of his continuing bearish stance on tech, but now I recognize that he was right then and maybe right now.

It's interesting that this week's Barron's has several articles that are bullish on stocks that have good dividends...it's almost like Cramer had a copy of Barron's before it came out or Barron's authors were listening to Cramer while writing the articles. Will post the articles later.......Jen

-- posted by Jen_

Should Payouts Be Tax-Free Zones?

Top 38. Aug 18, 2002 8:15 AM

» Jen_ - Better than Bonds?

from 8/19 Barron's a couple articles on stocks that pay dividends

Yielding to Stocks

For income, some equities look better than Treasuries

By JAY PALMER

When a ship is sinking, it's time to start thinking -- of life vests and life boats. With the stock market in seeming freefall, investors have been running for the safest of safest investments, U.S. Treasury notes. But they also present risks. The income is fixed -- and these days that income stinks. The yield on the 10-year Treasury notes last week fell to a paltry 4%, the lowest in 40 years. That income adds up to little, if anything, after taxes and inflation are taken into account.

Ironically, this rush to safety has made bonds riskier. "Our fear is that investors continue to pour into the 10-year Treasury market in an attempt find risk-free returns as risk aversion has climbed to possibly unsustainable near-term highs in reaction to severe stock market losses over the past two-and-a-half years," writes Salomon Smith Barney strategist Tobias M. Levkovich. "The key problem is that such herd-like moves generally have met with investment disaster." If the yield on 10-year Treasuries were to revert to 5.30-5.40%, where it was last spring, the price of the notes would fall 30%. "With stocks down 40% in the last two-and-a-half years, and bonds up something like 60%, we would argue that stocks seem to be the safer investment alternative now," Levkovich concludes.

Moreover, you can get higher income from some stocks now, including those of some of the largest and most financially secure companies, which hold out the prospect for earnings growth as well.

With all this in mind, Barron's ran a screen to identify alternatives to bonds for income investing, setting the parameters with the help of Marc Gerstein, Multex's Director of Investment Research and author of the just-published book, "Screening the Market."

On his advice, we started by knocking out REITs, limited partnerships and gas and electric utilities, which are special cases. We then scanned for stocks yielding 4% or better, eliminating those that had cut their payout in the past five years. We also specified investment-grade debt ratings (a Standard & Poor's rating of triple-B-minus or better.)

Finally we looked at corporate earnings. While Street analysts have been wildly overoptimistic, projections tend now to be more conservative. We looked beyond the current year's turmoil, including only stocks where analysts expect earnings to rise by at least 5% in their next fiscal year.

These parameters turned up a total of 20 companies, listed in the accompanying table. Some of the biggest and best-known names in the market meet the criteria, including members of Dow Jones Industrials such as Philip Morris, J.P. Morgan Chase, Eastman Kodak, General Motors and SBC Communications. Others making the cut include Bristol-Myers Squibb, which is still dealing with a hangover following the admission it inflated 2001 revenues by $1 billion, and Verizon Communications, another Baby Bell. Other high yielders include GATX, a finance and railroad-car leasing company; Lyondell Chemical, a specialty chemical company and chewing-tobacco maker UST.

But a screen like this is only a starting point, and investors should be prepared to delve into the specifics of individual picks in much greater detail. Even a cursory look at the list reveals that several companies have problems.

A case in point is PerkinElmer, a maker of scientific instruments used in the telecom, medical, pharmaceutical, chemical, semiconductor and photographic markets. The company makes the screen principally because of the way the yield has risen as the stock price has dropped from a 52-week high of 36 to about 6, reflecting both stockholder lawsuits alleging corporate misstatements and insider selling, as well as a recent downgrading of the firm's debt ratings.

Aon, an insurance and consulting firm, faces similar lawsuits, and its earnings are marred by special charges and sharply declining margins not cured by reorganization efforts. So grim are market conditions that the firm cancelled the planned spinoff of its underwriting business. Cooper Industries, a maker of electrical products and tools, recently reported higher second-quarter earnings, but warned that markets remain weak and that full-year profits will be well below previous expectations. Further, the company is on several investment blacklists for relocating its headquarters to Bermuda for tax reasons.

Banks feature prominently in the screen, with J.P. Morgan Chase, FleetBoston, PNC Financial, National City and KeyCorp all making the cut. "These are all large-cap banks but, aside from that, they don't have much in common," observes Steve Gresdo, managing director of BankStocks.com. "National City is as clean as a whistle, having avoided most of the problems affecting the industry. So too is KeyCorp, though it's downsizing and more defined by the turnaround going on. PNC has a lot of capital-markets and asset-management exposure, but the really vulnerable banks are J.P. Morgan and Fleet. Both have been under severe pressure due to exposure to large corporate lending, Latin America and the weak merger-and-acquisition field."

Tobacco, hardly a hot sector during the bull market but a strong one since the market's 2000 peak, is also featured: giant Philip Morris and UST. The latter, which is off 20% from its high reached in early May -- in part owing to a major antitrust lawsuit -- is on several top Wall Street buy lists. Earnings have risen and are projected to keep doing so. There also is the supposition that the company faces a relatively benign smoking litigation threat. And a planned $500 million stock buyback has won favor among investors.

In addition, two of the largest Baby Bells make the screen -- Verizon and SBC -- both after sharp slides in their stock prices. Initially, at the height of the WorldCom furor, the regional Bell operating companies were viewed as a communications safe haven. But that view has been taking a hit, partly following a stream of sour tones on the earnings from the sector but also after the disclosure that the fourth and smallest RBOC, Qwest Communications, will restate earnings due to overly aggressive accounting strategies. Finally, there is mounting concern over falling wired-line counts as cellular and cable modems supplant second phone lines in many homes. But as Barron's pointed out recently ("Pay Me Now," July 15), the Baby Bells have the wherewithal to boost their payouts.

The changing relationship between stock and bond yields is not unprecedented. From after the 1929 crash until the early 'Fifties, equities yielded more than bonds because they were deemed to be riskier. After the crossover, stocks were bought for capital gains and bonds for income.

In recent years, there has been a reversal; the 10-year Treasury has returned 11% this year while the Standard & Poor's 500 has lost 20%. And as investors increasingly look to dividends, that role reversal may continue.

The idea gains some notable backing

By SHIRLEY A. LAZO

Is it an idea whose time has finally come? Can Congress help the stock market by eliminating the corporate dividend tax -- or the double taxation of dividends?

In his Aug. 12 Investment Strategy Weekly, Edward E. Yardeni, chief investment strategist at Prudential Securities, shares his views on what can be done to boost stock prices and revive the confidence and wealth of individual investors.

Yardeni proposes that shareholders receive their cash-dividend payments tax-free, an idea recently advocated by such notables as Alan Greenspan, Henry Kaufman and George W. Bush, who indicated approval of it at the president's economic forum in Waco, Texas, last week. As Yardeni puts it, "shareholders should be encouraged to act as owners of the corporations in which they invest. Managers should be encouraged to treat them as owners, too. It is the owners of the corporation who pay taxes on profits. Why should they be taxed again on their dividend income? This double taxation creates a tremendous incentive for management to retain rather than distribute earnings."

The current system, says Yardeni, "gives too much power to management and tends to effectively disenfranchise the shareholder…. Without the discipline of dividend payments, management has a great incentive to use every trick in the rule book and every conceivable accounting gimmick to boost earnings. Investors are forced to value stocks on easily manipulated and inflated earnings rather than on the cold hard cash of dividends."

Yardeni believes that if dividends were exempt from the personal income tax, investors would tend to favor companies that pay dividends and have established a record of steadily enhancing their payouts. "Shareholders could then decide for themselves whether to reinvest their dividend income in the corporation based on the ability of management to grow dividend payments rather than earnings." Obviously, dividends would grow at the same rate as earnings, assuming a fixed payout ratio. But Yardeni asserts that "dividends would discipline the accounting for earnings. Management can't pay cash to shareholders unless the cash actually was earned."

One objection to axing the tax is that such a radical change would raise the cost of capital to growth companies that pay no dividends and retain all earnings. "With the benefit of hindsight," notes Yardeni, "we can safely say that there was a huge misallocation of financial, capital and human resources to those growth companies at the expense of the rest of the economy during the previous decade….Fast-growing companies with fast-growing earnings should have no problem paying fast-growing dividends. Their outstanding performance would be rewarded with a fast-rising stock price and a low cost of capital."

Another objection to not taxing dividend income is that it amounts to an unfair windfall for the rich at the expense of widening the federal budget deficit.

Actually, Yardeni points out, "the experience of the late 1990s demonstrated that a rising stock market can narrow the federal budget deficit and even change it into a surplus. Eliminating taxes on dividends is likely to revive the stock market as a wealth-creating engine of growth."......

Subscribe to WSJ & Barron's Online @ http://www.wsj.com

Compare to Cramer's comments on investing in stocks that pay good dividends on RealMoneyTalk from 8/14, 15, 16 here...

http://www.thestreet.com/radio/#archives

OK - maybe Cramer read Yardeni's Aug. 12 Investment Strategy Weekly prior to his 8/14 RealMoneyTalk radio show....Jen

-- posted by Jen_

Top 39. Aug 23, 2002 3:37 PM

» stocksystm - Re: February 2000

In response to message posted by Kirk:

That was a hilarious post! Cramer puts his foot in his mouth and he can't get it out. He goes on and on with his mania induced drivel. For a guy who seems to be smart on the surface, he sure can be a dumbass!

-- posted by stocksystm

http://www.newyorkmetro.com/nymag/column...

Top 40. Aug 24, 2002 12:58 AM

» Jen_ - Re: February 2000

In response to message posted by Kirk:

Yup Kirk - Cramer may seem like....

Above I said.....

On his radio show he's pretty much been singing the same song since around March 2000. Although he actually recommended tech stocks and funds right up to the March 00 peak ....he was pretty fast to flip-flop and go bearish on tech sometime in March 00. Although bearish on tech he says "there's always a bull market somewhere" and his job is to find it. He tends to jump on whatever is going up and bash whatever is going down. So during the bear he's liked value stocks especially the brand name companies found in the local grocery and drug stores. Throughout 01 & 02 he's advised listeners to pare down their tech holdings and diversify into value rather than hold and wait for a come-back and rather than bottomfishing for more tech - and he's been right so far since the Nasdaq just kept going lower lower.

OK - What really was Cramer saying in 3Q 2000? Did he really flip-flop from being a tech bull to a tech bear in 3/00 or did he try to play both sides of the fence for awhile? When did he start singing the "value stocks with dividends are king" tune? It's all documented on the net...

In this 4/00 article in New Republic Online Cramer laments the passing of the Bull and says in effect "we shoulda seen it coming" and predicts that there's a lot more Bear to come.... but hasn't yet formed a bear-proof action plan .....

Thud

By JAMES CRAMER
Issue date: 05.01.00
Post date: 04.19.00

Turns out stocks were risky after all. Turns out the stock market can't be the national pastime, because nobody loses money playing the national pastime. Turns out the market drops much faster than it goes up. These are some of the lessons learned since the stock market peaked a month ago, and I, for one, don't mind that it finally happened. For the last year, this market has made my life hell; I run money professionally, and I was getting the pants beaten off me by every individual I met.

You see, I had to manage our portfolio to maximize the upside and minimize the downside, meaning I had to strike a balance between risk and reward. Individuals had no such constraints. They didn't have to tell anyone what they were up to; they didn't have to disclose that they had borrowed to the hilt to finance greater and greater gains. They didn't care about the downside because from NASDAQ 2,500 to NASDAQ 5,000 there was no downside. The individual, armed with information transmitted for free on the Internet (information I once had to pay for!), had the edge on me. It was like Tiger Woods playing miniature golf and getting his head handed to him by just about everybody on the course. And then in three weeks it all evaporated.

The media seems reluctant to call it a crash. OK. How about a vaporization? Or maybe a capital disappearing act? The prices simply vanished, some so fast that any attempt to fish the bottom was met with absolutely extraordinary losses. Most sell-offs get triggered by discrete events: Iraq invades Kuwait, sending the price of oil through the roof; the Asian or Russian or Mexican or Brazilian market gets obliterated, causing our market to hiccup; or the Fed cools demand by making cash so attractive that people stop spending. Not this sell-off. Oh, a couple of smaller events played a minor role. There was the one-two punch of a harder-than-expected judicial ruling against Microsoft and a softer-than-expected revenue estimate by the software giant, which helped derail one of the market's leaders. Accounting shenanigans at Microstrategy, the hottest of the hot new stocks, caused people to wonder whether we'd given these kids too much money. A strong consumer-price-index number fueled fears that the Fed would have to tighten even more than it had been tightening. But none of these caused the crash of April 2000. This one was triggered by a supply problem: too much equity flooding the system with no place to go.

This diagnosis confounds the textbooks, which tell us that supply can never stop a bull market. But the textbook writers have never seen the likes of this stock market. Ever since the market bottomed in October 1998, underwriters have been pumping out a massive number of new issues to take advantage of the public's craving for Internet-related action. First they created stocks for e-tailing. Then they created stocks for business-to-business e-commerce. And, finally, they offered stocks for bricks-and-mortar companies getting involved with the Web. More than 300 of these companies went public during this period, crowding out any other companies that might need public capital. In each case, the underwriters slyly teased investors by offering only a sliver of stock at the start. That created those famous "pops" in new deals that made everyone salivate for the next big offering. The result: Stock after stock screamed to new highs as hope that the Net would trump all avenues of commerce took hold. There was just one problem: You couldn't lock up the rest of the stock forever. Underwriters can typically keep insiders from selling for six months, but once that period is over there isn't much to stop all of the sidelined stock from hitting the market.

That didn't much matter as long as the future stayed far enough away that it could not disappoint the present. But last year's Christmas showed that the Internet was the perfect way to shop. Which, paradoxically, is where the trouble started. The demand for e-tail goods swamped companies; deliveries came late or not at all. Sites froze. People ended up going to the mall anyway. It was a bust of a Net holiday season. That caused the e-tailers, the first darlings, to plummet as the insiders and penny-a-share venture capitalists bailed like mad. For a while, the business-to-business plays took the e-tailers' place; then so many of them went public that they started going head-to-head with each other. Finally, even the infrastructure plays became overwhelming in number, as company after company went public to satisfy what looked like insatiable public demand.

Beginning in March, the stock from the business-to-business plays that had been kept off the public shelf began to hit. First it trickled, but as the market kept rallying it poured. Finally, in March, it flooded, and by April we were inundated with so much stock supply that it overwhelmed demand. Mutual funds, running full tilt, didn't have any more money to buy. Individuals, leveraged up to their eyeballs in the greatest margin binge in this nation's history, had no more room unless they sold other stocks first. For a few fleeting weeks it seemed as if all we had was a rotation, as money flowed back to the old economy from the new economy, where the supply was based. But the inflation picture changed, in part due to roaring consumer demand stimulated by the stock market, and even those issues faltered. Suddenly there was no place to hide. As prices came down, margin clerks at brokerage houses moved swiftly to hog, and then sell, the collateral that individuals had pledged--so they could continue to take down the new issues and the billion-dollar baby companies.

Things culminated right before April 15, as individuals scrambled to raise cash to pay the Internal Revenue Service. The figures showed the NASDAQ with its worst week ever, but that doesn't tell much of the story. Even as the smoke cleared and many of the NASDAQ's seasoned issues came back, the newer companies continued to fall lower, because the supply didn't seem to mind that the demand had vanished. With the decline came the grudging recognition that the dot-com era has at last ended. The deals for more fanciful companies are being scuttled. At this pace, even the insiders may soon not be up on their holdings. And, just when the money is beginning to run out--many of these new companies raised much less capital than in previous eras in order to generate that pop--there is nowhere to turn. Everyone is tapped out.

Can it come back? Will we see a return to the Wild West period of capital formation if we just let things lie low for a little while? I don't think so. The money lost has been too great, the experience too sobering. And, if it tries to come back, you can count on the Fed to stomp it right back down to keep this economy from overheating. But, boy, was it fun while it lasted. For most people, anyway.

This site at New York Metro has articles by Cramer archived by date...

....Jen

-- posted by Jen_