Are everyday investors back in the market?

While mutual fund outflows are staggering, it could be that average investors are bypassing fund managers to buy individual stocks themselves.

By Jim Cramer Mar 23, 2012 10:12AM

Is the retail investor back, or not? The other day I propounded the notion that quintessential retail stocks, such as Apple (AAPL), Panera Bread (PNRA) and Chipotle Mexican Grill (CMG) keep running and I have to believe it is because of individuals buying stocks.

 

But the mutual fund outflows were also pretty staggering -- about $2.8 billion in the data released Thursday. That would seem to indicate my thesis might be wrong. Plus, my friend Bob Pisani from the floor made it really clear that the low volume is further confirmation that there really isn't much retail investing to speak of.

 

But what if we are all right? What if individuals have stopped caring for mutual funds -- the love affair over because of poor performance -- and they have decided to concentrate on buying actual stocks? Is that so far-fetched?

 

I haven't seen any other explanation for what doesn't seem to me to be mutual fund buying. Take Apple. We know the mutual funds are underinvested in the name. We have had exhaustive studies on the issue. Doesn't that mean individuals are buying the stock? Doesn't that mean people think they can do better than the managers themselves (which is something I wholeheartedly agree with)?

 

I think that stocks may be a shrinking asset class, but that individual stocks are actually being bought if the story is good and the product or service is loved.

 

Yep, this is an "out there" thesis, but unless someone has a better one, it's mine and I am sticking with it.

 

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Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL.

20Comments
Mar 23, 2012 10:33AM
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Are everyday investors back in the market?

They've never been gone. They trade every day on the fear, uncertainty and doubt created by the fools advising people to follow the herd.

Mar 23, 2012 2:09PM
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Friends ! This has been going on a long time now no matter who is in the White House or congress ! The true facts are the Feds BEN devaluing the US dollar! The US congress is the best MONEY CAN BUY ! and you elect them in NOVEMBER and the lobbyist OWN them the rest of their terms ! Facts are Facts and some people believe what anyone tells them on any news station! THEY ARE ALL ****-YST not analyst! Please believe that ! When the Supreme Court ruled that money is free speech and Corporations are people ! That was the end of congress working for the common good of Americans ! Where is Romney talking about Americans like us who has done everything right and did not walk away from our homes and never was late on our mortgage payments ! Where is out 20 -30 thousand reduction on OUR PRINCIPALS ? For our under water mortgage ! I hear no one talking about that !
Mar 23, 2012 2:56PM
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The true facts are the Feds BEN devaluing the US dollar! The US congress is the best MONEY CAN BUY !
Well at least you made one honest statement only you failed to mention Obama is controlling them. Get rid of Obama and watch the economy improve! As a bonus we get some of our Freedom back he has taken!
Mar 23, 2012 2:56PM
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I'm an everyday investor and i'm on the sidelines for a long time now since 2004 and made a lot money in the bond market. the market is a giant ponsi scheme????

wait till the next international event happens all the investors will be running for the exits big time have your stop losses ready!!!!

Mar 23, 2012 11:55AM
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i will speak for myself. the mouse came out for the cheese but, i think i sprung the trap!!!

(should i even try to escape and go back to my hole; mutual funds??)

Mar 23, 2012 1:55PM
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The last time the government and the money experts said that " the fundamentals the economy were in good shape and the country had only a small chance of a recession" , I lost my shirt.  It was not pretty.  As an individual investor, I can not afford to make any mistakes.  The results are ugly.  Smile
Mar 23, 2012 12:07PM
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Kramer, your propaganda is always "out there".
Mar 23, 2012 10:39AM
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C'mon Cramer. Two thoughts, if the retailer investor is back than that would be a great SELL indicator with Wall Street exiting, crushing them on way out. Second, the majority of investors don't have the capital to make money off Apple, especially at these levels. I truly believe you have got caught up in fame and are not focusing on helping the long term investor with the constant changes in direction.
Mar 23, 2012 1:28PM
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LOL

I don't know what you are talking about - Obama is the Bail Out King of all History!  Besides - If you are so down on stocks why are you posting here? Maybe you are a Political Hack!

 

   Im just a person who can see through the FEDs BS ! Wall street is a joke ! Once more i guess the Savings and loan fiasco in the late 80S and early 90s does not ring a bell ? That was daddy Bush ! NAFTA from Clinton did more to kill jobs than the BUSH tax cuts ! Congress is bought and paid for by wall street! So once mor devaluing the US diollar with printing money is good from the FEDs ! NOT Obama ! The President controls gas prices as much as YOU DO ! I guess if people are told enough BS they start believing it ! so  can you name any Jobs created by any tax cuts ? The feds do control the printing presses ? TWO unpaid for wars at the cost of 2 BILLION a week ? for over 10 yrs ? Can you add ? The value of our homes is about ZERO . The Market is saturated with no end in sight ! No im no hack , just an American that knows the real truth ! Im part if the land of the free! Not the home of the stupid like some people ! Feel free to point out anything i have said that is NOT TRUE. Besides your political BS.

Mar 23, 2012 1:47PM
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If Wall Street could buy Congress, then I suppose anybody with more money could top their offer.  So, I've put a donation jar in the employee lounge.  Everybody drop a few bucks in there.  Once we have enough, we'll take over!

                                                                                    Devil

Mar 23, 2012 1:48PM
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The investing public is sick of poor fund returns and duplicitous Wall Street shenanigans that take and don't give back.

 

I consolidated all my tech holdings into AAPL last year but may consider HPQ too if it shows strength. Others are all divvy stocks of companies providing fundamental, necessary services. No funds at all, as they are just like the guys who used to care for my yard......they did a good job the first time, then it was all 15 minutes of blow and go from there. Fired them in 2 months. That's Wall Street today........a quick blow and go, and define that any way you want to and it still fits perfectly.

 

Mar 23, 2012 12:57PM
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The republicans love big government as long as the US treasury bailout all the big banks out like they have and did ! This is NOT capitalism ! Now back in 08 the banks should have been left to fail because of THEIR SHADY mortgage practice ! Most mortgages at that time had PMI insurance because once more the banks lost their sound lending practices by requiring 20% down

I don't know what you are talking about - Obama is the Bail Out King of all History!  Besides - If you are so down on stocks why are you posting here? Maybe you are a Political Hack!

 

Cramer is right on - I dumped Brokers and Mutual Funds for Individual Stocks - Best decision I ever made regarding my Investments!

Mar 23, 2012 3:12PM
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OOPS, SORRY, MARTIN, YOU ARE THE IDIOT!!!!!!!!!!!!!!

 

Mar 23, 2012 3:07PM
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USER903960, BESIDES CRAMER, YOU BUDDY ARE THE IDIOT!!!

Mar 23, 2012 1:56PM
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@ user903960:  You idiot, Obama is the bail-out king only because it fell to him after Cheney/Bush totally screwed things up, so Obama was elected, and had to finish the job they started.  You should stop watching Fox News, dude.  It's just a running commercial for the anti-Obama crowd.  He's not perfect, but he's done a lot of good things.
He's (Obama) is a Communist by any definition. Man all the Acorn Political Hacks are out in force today!  By Far Obama is the worst president in our History!
Mar 23, 2012 5:12PM
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Well at least you made one honest statement only you failed to mention Obama is controlling them. Get rid of Obama and watch the economy improve! As a bonus we get some of our Freedom back he has taken!

 

   LOL With all due respect i think you need a civics class ! The congress by the constitution has the check book and laws  in our system of government ! The President has the armed forces! You seem to be confused ? I guess you are a Rush Limbaugh clone! Lets see ? Rush ? Never served in the US military ? Never went to collage ? 4-F from NAM for a boil on his butt ! Never elected to any office ? Never ran a company? The republicans hero ! LOL The President does not have the power to line item VETO! He must  ok it with it all ? from congress or reject it  ALL ! The whole thing ! Another thing the republicans control the house . RIGHT? So they control how long the house works , the bills that reach the floor for a vote , all the bills that are in play by any member they control what gets tabled and what goes to the floor for a VOTE. So i think you better google the US constitution and read it! 9/11 was a sad day for America !!!! But it did not have to cost 5 trillion dollars for two wars unpaid for ,and the TSA and the ports and the patriot ACT done by BUSH and a REPUBLICAN HOUSE !  That what has taken your rights you idiot BTW CAN YOU READ???  and the people who are fighting for what in AFG? It sure is not the US constitution ! NAM showed us that if you do not win the people you do not win at all !!! History shows where we have failed every time ! You call Obama a communist ? LOL The Communist Chinese and North Koreans are the communist ? BTW President Obama got BIN LADEN DEAD . So much for your garbage and lack of education in civics!!! LOL America Land of the free? Home of the Stupid like you ! OH one more thing on HISTORY , the Japanese sunk 90% of our Pacific Fleet in 1941 but yet today i cannot turn a corner without seeing a TOYOTA or a HONDA LOL So much for 9/11 ????? Think about that ! I love my country did 4 yrs in the U.S.M.C. but the way congress runs ? Its a joke ! Take that civics class you fool ! But then i bet you DRIVE A TOYOTA LOL LOL LOL ... Only in the USA baby where idiots like you are free to be idiots! LOL

Mar 23, 2012 12:41PM
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u know the market is only UP from the TRILLIONS that the gov. has handed out...
and we know it hasn't been paid back....
so, where's the growth from?
$4 gal gas,
8.3% unemployment
U.S. drowning in debt
2% growth
home values down 65% and still falling...

looks like a good short to me...

Mar 23, 2012 1:30PM
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@ user903960:  You idiot, Obama is the bail-out king only because it fell to him after Cheney/Bush totally screwed things up, so Obama was elected, and had to finish the job they started.  You should stop watching Fox News, dude.  It's just a running commercial for the anti-Obama crowd.  He's not perfect, but he's done a lot of good things.
Mar 23, 2012 1:06PM
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Its like housing starts !!! ARE THEY STUPID?? Their are so many foreclosed homes on the market and its so saturated that building more homes as a gage for anything ? Thats stupid ! But then wall street does not run on sound investing practices ! We all know that ! Americans true wealth was in our homes but once more wall street and the Government blew that by letting the banks live ! With all the US taxpayer money ! And the best part ? is that they do not even give to the GDP of the USA. LOL The DEBT of this country is from TWO WARS for over 10 yrs and the bailouts of wall street and AIG.... It surely not SOC SEC like they want Americans to believe! Its like all the TAX breaks to the rich ? Where are all the jobs at ? The Bush tax break was to create , its over 10 yrs old too all it did was take 1 trillion OUT of the US TREASURY. Thats all !? LOL SO ONCE MORE if any politican says tax cuts create jobs the are lying !!! We have had tax cut after tax cut and cities states counties and guess what ? NONE were created ! thats a sad sad thing because all it did was kill the wealth of this country even more!
Mar 23, 2012 12:44PM
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Its great ! What Cramer and the boys will not tell you i will ! This market is overinflated by near zero int rates by the FEDs The republicans love big government as long as the US treasury bailout all the big banks out like they have and did ! This is NOT capitalism ! Now back in 08 the banks should have been left to fail because of THEIR SHADY mortgage practice ! Most mortgages at that time had PMI insurance because once more the banks lost their sound lending practices by requiring 20% down on a mortgage like they do now LOL !!! The deposits by people like me and you were insured by the FDIC . so it would not have been a big deal ! THATS CAPITALISM FOLKS.. But the CONGRESS as useless as they are , got rattled !!! By the big money boys who once more BOUGHT the US Congress of the USA.. I love the QE2 BS ! Printing more money for the ZERO int rates at the FEDS window ? LOL Look at the int rates on ANY SAVINGs ?? LOL Any questions ? All that did was devalue the US dollar even MORE!! Making energy prices go higher ! WHY? Because everything sold on the market is sold in US dollars ! So the more the FEDs devalue the greenback ? The higher the prices people!! So when you hear these idiots ranting about nothing these are the true facts ! Any questions? LOL The int rates should be at least 1.5 % At the FEDS window. Not ZERO.
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