NEW YORK (TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
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Posted at 2:56 p.m. EST on Friday, May 16, 2014
We know from earlier this week that David Tepper, the amazing hedge fund manager, has gotten a little nervous and is more about preserving capital than trying to make more on it.
His cautious comments and the weirdo bond market were behind the not-so-hot-for-the-bulls action these last couple of days. Makes sense; we've seen him be bullish when others were bearish, and he made a ton of money betting against the bears. Now it sounds like the opposite is happening, although we can't be sure, because everyone is entitled to change his mind.
Then today on Scott Wapner's "Fast Money Halftime Report," we heard from Laszlo Birinyi, a mild-mannered manager whom I have listened to since the mid-1980s and who has almost never steered me wrong. He said he maintains his bullishness, and that a lot of what people are freaking out about, such as the collapse of many of the tech companies, doesn't bother him, given how they represent such a small part of the market. This has been my view for some time, that Workday
Me, I am mixed. I want to burn off some days here with some back-and-fill, where only companies that have real earnings growth get taken higher, including the ones that report next week. I just don't see anything huge on the horizon from stocks, although I do expect that the Ukraine elections in a week could spur "escalating tensions" and give you a better chance to buy.
We've been picking today for the Action Alerts PLUS portfolio, which we have to do, because we had taken a lot off higher. You don't know when things are going to turn, but you do know your companies, and if they are taken down ahead of good catalysts like quarterly reports, you are getting a price break that Tepper that Birinyi would most likely endorse.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.
Stocks Shaken by Lower Interest Rates
Posted at 2:48 p.m. EST on Thursday, May 15, 2014
If you wait for the bonds to settle, will stocks be at a magical level where it is safe to buy? Or if interest rates drop to 2.2% on the 10-year, will you be even more frightened and more prone to selling, even if you think we will be appreciably lower than we are today?
That's the dilemma facing many who now believe that lower interest rates will somehow kill the bull.
Give me this: It would certainly be a first if the principal reason that powers stocks so often, a decline in interest rates, now caused people to sell stocks, not buy them.
I think it is a better bet to presume that while a decline in home-buying may be behind some of the strength in bonds, I believe it is the supply side that's driving things: competitive rates to Europe, not as many bonds being issued, an improving deficit. I also think that so many wise guys bet against bonds that some have to be throwing their hands up, if not their lunches, and giving in. That means they have to buy their bonds back and call it one of the worst trades of a lifetime.
If that's the case, my inclination is to buy the higher-yielders right here, betting that if bonds ever stop going up -- and they will, as they don't go to the sky -- that's the group that will rally.
Otherwise, I get it. Many are simply trying to outrun the bear, knowing that they only need to outrun others. Still others have listened only to the "dangerous" portion of the qualms of David Tepper and not his flexibility if stocks go down to his levels.
Name your poison: I just don't find lower rates all that poisonous!
- What lies ahead for stocks, and
- The dilemma presented by lower interest rates.