3 factors will keep stocks rallying

With growth, credibility and compromise all gelling at last, this run is not done. I want to be in, not out.

By Jim Cramer Dec 2, 2010 9:46AM

jim cramerYou need three things to keep the rally going: confidence, as in confidence in the world's central bankers; growth, and I mean growth in all countries including the United States; and compromise, as in the certainty of a deal on unemployment benefits and taxes. By the way, the certainty of the compromise is, in a way, more important than the terms of the compromise.

 

Growth is the most important one because growth eliminates the notion of the Pyrrhic victory. If there is growth, then the central banks are not only not throwing good money after bad, they are abetting private-sector hiring that will lead to higher tax receipts at a time of government austerity.

 

Confidence? Last night I went to hear the great Stanley Fischer speak at a YIVO charity dinner where he was honored. Fischer, the incredible governor of Israel's central bank, is widely hailed as the man from the IMF who saved Asia in the 1990s.

 

He spoke of the need for people to believe, but more important, his follow-up speaker, Larry Summers, formerly of Harvard and the Treasury and adviser to President Barack Obama, reminded us that Fischer had the bearing and the brilliance to be trusted. He reminded us that Ben Bernanke studied with Fischer and that you see the same level of confidence and credibility in Bernanke.

 

It reminded me that, yes, that's happening right now -- the investors of the world are feeling more confident in the credibility of Bernanke in conjunction with the IMF and the European Central Bank.

I think that growth, compromise and confidence are now all going in the right direction. That's why I think the rally's not done.

 

That's why I still like what I see and believe we will work our way higher, perhaps back to August 2008 levels, perhaps even to 10% on the S&P 500 ($INX). For some folks, that might not be worth sticking around for.

 

I know that I had thought we could finish this year up somewhere in the high single digits, and we are there. But when all three factors -- growth, credibility and compromise -- are gelling, I want to be in, not out.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Follow Cramer's trades for his Charitable Trust.

 

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14Comments
Dec 2, 2010 2:53PM
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This jack-**** has not been right about anything!!!!
Dec 2, 2010 9:30PM
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It's scary to me......reading the comments from people who are obviously not intelligent.....just full of hate.  No, Jim Cramer is not always right nor is he always wrong..........a smart person reads what he has to say and then makes their own decisions!
Dec 2, 2010 8:10PM
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OK, you guys. I realise that Creamer is not right about everything, but if you do not like him or his opinions, why even read his stuff. You guys should just buy gold and leave him alone.
Dec 2, 2010 5:04PM
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The reason this guy is on TV and has these money columns is because his company OnTheStreet.com went bankrupt about 10 years ago. and he needs a job. I place no credibility in anything he says.  just like the former politicos who are on tv talking; that's all they do is talk, or write/sell books; most have never worked a day in their entire life at a real job . Newt, Spitzer, Huckabee, and others.  I wish they were required to go home to their home state and live in privacy.  If their company is not successful, then why should I listen to their advice?
Dec 2, 2010 4:28PM
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How can this guy still have any public voice? He is a mouth piece for the financial sector and is paid to say what they want people to hear. And he was a big part of the cause for the financial crisis that happened in 2008. What a waste of space! 
Dec 2, 2010 2:20PM
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Fabrication,manipulation,lobbyist,and everything else you can insert into the markets make the adventure very dangerous for retirement investors. Its exactly like laying your retirement fund on the crap table and witness where you will be living your retirement years at. A tent or under a roof. Did I state the fabrication of the state of the financial structure of our country. Stimulas makes the markets seem stabilized, but its the taxpayers money being injected into the market.
Dec 2, 2010 9:31PM
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Has anyone given any thought to the big sell off before year end to avoid higher taxes on capital gains????  Save the losses for 2011 and you will be ahead of the game.
Dec 2, 2010 8:38PM
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Didn't even bother to read article cause this guy is just another cheerleader that feeds into all this wall street **** and in the end all of the regular guys get stuck paying for it. They got bailed out one year and received the biggest bonuses ever the next year and we  all keep getting screwed and nobody is bailing us out
Dec 2, 2010 7:46PM
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Kramer.... quit sucking on the ballzak of the central bankers. 
Dec 2, 2010 7:44PM
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of course the stock will keep on rising that why every thing is so much higher this time next years you want be able to buy a soda also no one has any money as it is when the stock fall even the big boy will fall out the window is starting to take effect now unemployment is running the state buget are failing
Dec 2, 2010 7:34PM
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The chance for my confidence to be restored was destroyed when Spitzer went down in disgrace.  It's a shame.  He was doing badly needed work... and I've been a Republican since Reagan.  We have people like Saks who are using super computers to play the rest of us like suckers.  We have the Fed who prints money to give to banks at no interest, with an understanding that the banks turn around and invest a significant amount in the market to prop up the market.  That's clear manipulation...... a house of cards.   I could tell you a story how CML committed fraud and ruined my life, back before anyone cared - pre Enron.  If I didn't love my wife and children, I'd shoot three of the most responsible s.o.b.'s.  I have more sympathy for people who commit violent crimes of rage, than for white collar criminals who destroy lives by taking a persons dignity.  I'd rather they had just shot me.

Dec 2, 2010 6:43PM
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this guy is a moonbat,the market is blowing off the top,we will c a massive correction
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Until ceos are penalized for lying, I have no interest in giving away any more money to the markets. The financial markets still have a huge shadow hanging over them in commercial and home mortages.
Dec 2, 2010 3:41PM
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KNOCK___KNOCK___WHOS THERE?___REALITY!!! TIME TO ANSWER THE DOOR!!   WHATS YOUR REACTION????????  GOODBYE!!!
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