9 stocks you may have bought too soon
Two days ago was the wrong time to jump into these high fliers.
They are cracking the squeezes. Always happens about this this time in the sell-off. You begin to see how everything highflying trades together and sells off together. That's why Yelp (YELP), LinkedIn (LNKD), Netflix (NFLX), Amazon (AMZN) and Google (GOOG) can be clobbered all at once. Notice how Celgene (CELG), Regeneron (REGN), Biogen Idec (BIIB) and Gilead (GILD) are also being hammered.
That's just the way it is. These were shorted and shorted and shorted, and the stocks just kept going higher. At last they have broken the fever and are experiencing one of their regular paroxysms of pain.
I am reading on Twitter @Jimcramer right now about how I am killing people in these stocks. Let me be very clear about this: If you bought these stocks on me, you should have made a ton of money, unless you bought them two days ago, when I was definitely telling you that I was raising cash and that if you are buying now you are buying too early.
That's OK, I know the truth: Very few people on Twitter read me here. Some, but not many, watch "Mad Money." Most just read Twitter!
Blaming me for recommending about the best investment ideas I have ever had is fine with me. Be my guest. The main thing you need to know, though, is that after three to four straight days of this pain, you tend to get a bottom. That's when the short-sellers smell blood and go after these stocks that have been such horrendous shorts. That's when the longs who aren't nimble finally blow out these stocks. That's when the Johnny-come-latelies take a loss. Now we're only on day two of the selloff, so the idea of coming in and being a hero here has not been a good idea. It is just too early to buy.
Second, when you do go in, recognize that these stocks are coiled springs, but get the most bang for the buck by using deep-in-the-money calls.
Third, recognize that these declines are always so violent that they shake out everyone who is experienced about the way the stock market works -- hence the anger that comes from the left field of Twitter.
Fourth, the analysts will not come out of their foxholes to defend these stocks until after they bounced. They will be of no help.
Finally, understand that there is probably nothing "wrong" at any of these companies. Nothing fundamentally has changed. But how we view stocks through the prism of the government shutdown and how we viewed them before are two different things. If we go into a hard recession -- which is what looks to be the betting line today -- then people will pull in their horns and try to shed their riskiest equities, these highfliers.
So accept what the market does. Recognize that it probably isn't over yet. You want to take gains -- or losses if you just bought them two days ago? Makes sense if you are worried about the next couple of days,. Otherwise, find your deep-in-the-money call contract out until next year, and get ready, in a day or two, to buy.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
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PAPA DOC BACK FROM THE DEAD
We have a president who is close to becoming a dictator
In today's issue: While veterans are being turned away from Washington, D.C., war memorials and park rangers are trying to keep citizens from visiting Mount Rushmore, Obama is allowing union organizers and illegal aliens to protest on the Mall.
Savage is outraged that "men who fought in wars have no First Amendment rights, but non-citizens do."
"We have a president who is close to becoming a dictator," Dr. Savage said to his audience, adding:
Why do many people feel that way?
Is it irrational? Is it racism, as the left would claim?
The National Mall was closed to World War II and Vietnam vets, yet this president has opened it up to illegal aliens, so they can hold a rally.
They told us it was closed due to the government shutdown.
Now the National Park Service has confirmed this "immigration reform" protest can take place at the Mall.
Let's see if I've got this straight: Men who fought in wars have no First Amendment rights, but illegal aliens do?
Obama is encouraging this.
Of course, he's the same president who encouraged the overthrow of a legitimate government in Egypt, and a dictatorial one in Libya which nevertheless was no direct threat to us.
We don't have a presidency so much as we have a crypto-communist dictatorship in the making or an overt one.
Remember even Obama chanted about the folks going bankrupt because of health expenses and not having adaquate insurance. Surfin Food Stamp Boy types don't go bankrupt. The folks that are in danger of that for the most part still will be or forced into buying something they used to feel like they could not afford.
It didn't take long for Wall street traders to switch their manipulation from Yellin back to the debt ... it will be back to tapering next ... then ... the manipulation goes on and on and on ...
Arab Spring, maybe ?
The economies NOT actually getting better ?
who would've thunk it ?
Weren't you going to show me Papa Doc's Harvard transcripts ?
I mean , you DID say he received the "highest honors"
Did you pull that outta your a$$ , too ?
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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