Fed isn't the only thing that matters
As an investor, I feel endless pain in hearing people say it's all about the central bank. If only I could forget the hard work of picking good stocks.
And therein lies the real problem. You either hate the Fed and think its bond-buying program is illegitimate and you're therefore betting against stocks all the time, or you fear the data will one day be so good that the Fed will stop its program.
Just as during the beginning of the era of the billion-dollar hedge fund, there seems to be no middle ground. So few people seem to say: "You know what? Corporations have a lot of money. Dividend boosts are rife. The merger games are on. The consumer's got a great balance sheet. The economy will be able to sustain itself. Stocks deserve to sell higher."
No. It's either this: "The Fed can't do this forever, and it's all a big phony and will never work. We're in a permanently crippled economy hobbled even further by Washington's strife and a very liberal president." Or this: "The Fed can't do this forever, and it will stop well before it says it will. And we'll all be left sitting on the Titanic."
As a stock picker I feel endless pain from this one. How many times have I been faked out by this Fed-bad nonsense? How many times can you sell Heinz (HNZ) because of it, or NYSE Euronext (NYX) or Berry Petroleum (BRY) or Dell (DELL) or Google (GOOG) or Union Pacific (UP). The list goes on.
How many times can you hide in cash because of it?
I was furious Thursday every time the glib notion of "sell everything" was spoken. That's not a glib thing to say on air, believe me, because people actually do it.
The whole totally Fed-centric thing steams me.
Sometimes I wish I could change my stripes and be a big macro thinker, sit back and castigate the Fed and say the market is a big joke.
Because I have to tell you, if I were to do that, I would be taken a heck of a lot more seriously than if I were up 16%, as Actions Alerts PLUS was last year.
That's right. Sometimes I feel we're in a world where it is better to be wrong and not making money than it is to be right and making money.
It's times like these when I truly do have contempt for the job. How much more fun would it be, for example, to decide I didn't have to read the Toll Bros. (TOL) conference call because I knew it was all phony because it's propped up by the Fed? How heavenly would it be to be able to ignore the Berry Pete deal or the Copano deal because they are only figments of Ben's imagination and there will be no more deals once people realize what a farce it all is or the economy gets stronger or he's fired or leaves or whatever.
The Fed-fraud-phony stuff makes a total mockery of what I do with my work, or at least the way I have done it. Yeah, it is that bad.
I don't know any other way to put it. As long as the vast majority of strategists, trigger pullers and behemoth funds subscribe to this uber Fed-is-all-that-matters theory, my whole attempt to explain why PepsiCo (PEP) is better than Coca-Cola (KO) or that the New York Times (NYT) should be bought or that we could be near the bottom in Millennial Media (MM) or Magnum Hunter (MHR) is a total fool's errand.
Tell me I am wrong.
I'd love to know, because I think the homework still matters and the over-Fed reliance for all decisions is a crutch, not a sign of wisdom.
A crutch that one day will disappear and we will realize that the individual homework on individual stocks is, indeed, the way to go.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
It is now impossible to look at stocks fundamentals because we are now a world of cheats and liiers.
How can an individual ever hope to pick a stock by listening to a conference call
or worse an analyst.
WALL STREET IS NOW A CASINO AND YOU NEVER WIN IF YOU PLAY LONG ENOUGH.
When the Markets fall 1%...Some stocks fell 2-3%....It would be nice to see Reprocity..
Market goes up close to 1%.....Some of those stocks should go back 2+%...
Looks like that NOT going to HAPPEN.?
I think it's CGT1 and them Scumbags ??
Not change the subject but.....
The Feds are suing Lance Armstrong over doping charges.
Their door into the issue is our Postal Service's sponsorship of his career to the tune of $30 million.
This is the same Postal Service might not deliver on Saturday any longer? Might there not be a disconnect in there somewhere?.
Our Fed creates the platform for speculation. Speculators create the platform that is nonsensical market pricing. Nonsense pricing puts us back to where we were in 2007 & 2008.
Is the Fed's "policy" to fan out the bad assets and use smoke and mirrors to fool the investor? Can't they see that they are just recycling our national finances so that we never get above water? 5 years later...and we've only sunk deeper in a lake of faceless pennies.
Always remember lefty cretins --
Obuma was FOR sequestation BEFORE he was against it !
Want to challenge me on that ?
Exactly, like the lefty mantra --
Do what I say -NOT what I do !
Lies you can believe in !
Give me more of that hope n change !
Making the suggestion that the Fed is not being used as an instrument to "aid" a selected segment of our economy is one HUGELY outrageous statement. What the he!! is its function then?
beware of stop orders...this is another cramer error....stop orders when triggered, become market orders, and you may get a much lower price than your stop order price.
if your holdings need stop orders you need to change your holdings or be watching every minute.
THAT'S GAMBLING...NOT INVESTING
There are plenty of other ways to make money - FOREX, commodities, real estate, venture capital, etc... But none of this is offered in any 401k plan, and most people will never take the time to explore these options for their IRAs. So, dollar-cost average your way into the easiest and most convenient inflation-proof investment there is right now - stocks. Keep a close eye on your holdings and adjust those stop-loss orders early and often.
I am more than happy to take my profits, but you also have got to know when the party is over. At the macro level, think about it... have you ever seen a time in your life when the developed economies of the world are in recession (or close to it) and seen stocks near all-time highs. Fed or not, this eventually catches up with you. For those who believe that party will continue, what is the driver to take the market to the next level? Housing? Autos? These are not what they use to be...most of this stuff is made overseas.
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